TAIPEI Former Taiwan premier Vincent Siew plans to visit China next week to try to sell his idea of establishing a regional common market as part of efforts to help ease tensions.

"(I) can try my best to help create an atmosphere that will be conducive to improving cross-strait relations," Siew, who stepped down as premier last May, told Reuters late on Wednesday.

"The common market is one of many ideas. Maybe it is feasible," said Siew, a heavyweight in Taiwan politics, who lost a bid for the vice presidency in elections last year.

Ties between Taiwan and China became even touchier after U.S. President George W. Bush pledged last week to help the island of 23 million people defend itself against giant rival China and agreed to arm it with submarines and destroyers.

Bush's move riled China and threatened to prolong 22 months of stalemate between Taipei and Beijing, bitter rivals since the Chinese civil war that ended in 1949 with the communists routing the nationalists who fled the mainland into exile.

Asked to comment on the biggest arms package for Taiwan in a decade, Siew said the rivals would be better off pouring money into the economy than pursuing an arms race.

"The two sides should use resources on economic construction and as little as possible on an arms race," said Siew, who was the island's top policymaker on China from 1994 to 1995.

"I still think many issues involving the two sides (of the Taiwan Strait) should be settled by the two sides sitting down and talking to each other," Siew said.

"Ties with a third country should not be entangled with cross-strait ties," he added.

Siew plans to visit Beijing, Shanghai and Shenzhen from May 8-16, but his first visit to China has yet to receive the blessing of the Taiwan government.

Taiwan requires senior officials to seek government approval to visit China within three years of stepping down because of national security considerations.

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Siew would be accompanied by a high-powered delegation of about 20 business leaders, including Morris Chang, chairman of Taiwan Semiconductor Manufacturing Co, the world's top microchip foundry and the island's most heavily capitalized firm.

Taiwan media said Siew would meet Chinese leaders during his visit. He will stay at the government's Diaoyutai guest house in Beijing, where visiting dignitaries are put up.

Siew envisaged Taiwan and China normalizing trade ties in the first stage and signing a free trade agreement and harmonizing their regulations and standards in the next stage.

Under his plan, the two sides would harmonize their customs duties and monetary policies in the third stage, paving the way for the establishment of a common market, Siew said.

"There'll be many many areas of cooperation be it science and technology, agriculture, finance or transportation," he said.

Despite political tensions, Taiwan investors have poured $50 billion into China since rapprochement began in the late 1980s. But Taipei bans investment in strategic industries and infrastructure in China on national security grounds.

Siew is the second vice-chairman of Taiwan's main opposition Nationalist Party to visit China in six months, but he said he will be representing neither the government nor the nationalists.