Taiwan calls for demilitarized zone with China

Taiwan President Chen Shui-bian hopes his controversial referendum will pave the way for a demilitarised zone with rival China and open long-stalled talks, local newspapers said yesterday.

Chen will propose the two sides swap envoys and set up representative offices in Beijing and Taipei as part of an initiative in his referendum to establish a "framework for peace and stability" across the Taiwan Strait, the papers said.

China regards Taiwan as part of its territory and has been angered by the planned referendum, seeing it as a step towards independence that could spark a war.