TAIPEI: Taiwan is expected to forge an agreement on financial cooperation with China "soon", in yet another sign of evolving ties between the two former bitter rivals, it was reported Sunday.

A senior Taiwanese official in charge of relations with China said over the weekend the formal signing of the agreement, which calls for closer banking, insurance and securities cooperation, "could take place soon," local media reported.

Negotiations on the agreement "are almost completed," said Chiang Pin-kung, chairman of the quasi-official Straits Exchange Foundation.

The foundation and its Chinese counterpart, the Association for Relations Across the Taiwan Strait have been authorised separately by their governments to handle exchanges in the absence of official contact between the two sides.

Relations between China and Taiwan have improved markedly since May 2008, when the China-friendly Ma Ying-jeou assumed the presidency, pledging to push for closer economic cooperation and allow in more Chinese tourists.

The two sides held their first direct dialogue in 10 years in Beijing in June last year, leading to regular direct flights across the Taiwan Strait and measures to boost tourism.

Taiwan has governed itself since 1949 at the end of a civil war, but Beijing regards the island as a renegade province awaiting reunification with the mainland.