By Ralph Jennings
TAIPEI (Reuters) - Taiwan's new president took office onTuesday with pledges to forge historic trade and transit tieswith China, which claims the self-ruled island as itsterritory.
Ma Ying-jeou, 57, the Nationalist Party (KMT) candidate anda former Taipei mayor, took over from Chen Shui-bian in aceremony at the presidential palace, beginning a four-year termafter his landslide election victory in March.
The pair shook hands and walked, smiling, through apresidential office hallway rimmed with military officials andKMT leaders to an auditorium where the Taiwan flag and aportrait of Sun Yat-sen, founder of modern China, hung in thebackground.
Ma campaigned for the presidency on a platform focused onbreathing new life into Taiwan's economy and pushing Beijingfor trade ties and a peace accord.
China has claimed Taiwan since 1949, when Mao Zedong'sCommunists won the Chinese civil war and Chiang Kai-shek's KMTParty fled to the island. Beijing has vowed to bring Taiwanback under its control, by force if necessary.
"It's a big day," said Joseph Cheng, a political scienceprofessor at City University of Hong Kong. "China willdefinitely be expressing hopes for a new beginning."
In a speech later in the day, Ma is expected to offer peaceto China, responding to recent conciliatory words from ChinesePresident Hu Jintao and suggesting that the two sides cooperatein international organisations, Taiwan newspapers said.
China opposes Taiwan membership of the United Nations andother bodies that require statehood to join.
Taiwan stocks have risen 5.3 percent over the past fivesessions and the Taiwan dollar hit a two-week high in earlytrade against the U.S. currency on Tuesday as investorsanticipated better economic prospects under Ma.
"(Ma's) inauguration marks a new positive era forChina-Taiwan relations," said Donald Straszheim, vice-chairmanof Roth Capital in Los Angeles. "It represents a big plus forthe Taiwan economy and is already being reflected in Taiwanstocks."
Ma has pledged to launch direct weekend Taiwan-Chinaflights by July and initially allow up to 3,000 Chinesetourists in per day. The flights will cut out time-consumingstop-overs in places like Hong Kong for Taiwan investors inChina and ease the passage for tourists.
China-listed shares of several Chinese airlines surged onTuesday on hopes that Ma's inauguration could soon lead todirect commercial flights. China Eastern Airlines Corp rose 9percent by midmorning while Shanghai Airlines Co was up morethan 5 percent.
Ma has also said he would make the Chinese yuan convertiblewith the Taiwan dollar, let Chinese buy Taiwan real estate andpush for a common market.
A peace accord with Beijing and better ties with staunchally the United States are on Ma's political agenda. Ties withboth frayed under Chen's hardline policies against China since2000.
"I think the inauguration means a big change for Taiwan,"said Alexander Huang, professor of strategic studies at TamkangUniversity in Taiwan.
"Ma Ying-jeou has a mandate to improve relations withChina," Huang said. "He's going to use that mandate to changecourse from over the past eight years."
Ma will hold events in Taipei and the southern city ofKaohsiung throughout the day on Tuesday. He is set to meetdelegations from Japan, Singapore and the United States at thepresidential office, local media said.
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(Additional reporting by Jason Subler in Beijing and EdmundKlamann in Shanghai; Editing by John Chalmers)
