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The visit of Taiwan's opposition nationalist leader Lien Chan to China this week is the first such since his party, the Kuomintang…

The visit of Taiwan's opposition nationalist leader Lien Chan to China this week is the first such since his party, the Kuomintang, fled the mainland in 1949 for what was then the island of Formosa to set up a government in exile.

The huge difference in scale between China's 1.3 billion population and Taiwan's 23 million is compensated for by the latter's advanced development, which makes it one of the principal investors in China's booming economy - despite political tensions between them.

And such material interests are in turn outweighed by the enormous symbolic importance for both states of how their relations are developed and resolved. Beijing regards Taiwan as part of China, to be settled according to the "one state two systems" formula applied to Hong Kong.

Pro-independence sentiment has been growing in Taiwan, as seen in the victory of President Chen Shui-bian over Mr Chan in the 2000 and 2004 presidential elections. But the balance of opinion still favours a long term accommodation stopping short of independence.

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That this is a significant symbolic occasion can readily be seen in the high profile welcome extended to Mr Chan in Nanjing yesterday. Over the next week he will meet many Chinese leaders, including President Hu Jintao.

It suits them to highlight the visit, partly to mitigate the negative message sent out internationally by the anti-secession law passed by the Chinese National People's Congress six weeks ago. Aside from the angry reception it received in Taiwan from political leaders and popular opinion, it has affected European attitudes towards the planned lifting of the EU's arms embargo against China imposed after the Tiananmen Square massacre in 1989.

China's recent frosty relations with Taiwan have also played into the sharply increased tension between China, South Korea and Japan arising from the unresolved role of Japanese imperialism in Asia before and during the second World War.

Following the expression of "deep remorse and heartfelt apology" about it by Japanese prime minister Junichiro Koizumi last week there are signs the Chinese leadership wants to explore political solutions and ease the tension and popular protests. This is welcome both ways, since the rhetorical escalations of recent weeks can easily spill out of control.

Mr Chan has pledged not to reach any formal agreements with China during his visit to the mainland which could compromise the Taiwanese government's position in future negotiations. But there can be no denying the political significance of this visit for future relations between the two.