Hu said the mainland is willing to discuss with Taiwan proper and reasonable arrangements for Taiwan's participation in international organizations, as long as this does not create a scenario of "two Chinas" or "one China, one Taiwan".

Although the two sides of the Taiwan Straits have been split since 1949 by a civil war, the political confrontation between them did not change the fact that they belonged to one China, he said.

"Once the two sides reach a common understanding and accordant stance on the principle of one China, the foundation of political mutual trust will be laid and anything can be talked about between the two sides," he said. "Anything that is conducive to peaceful development across the Straits, we will greatly promote. Anything that harms it, we will firmly oppose."

Hu proposed that the two sides end hostility and reach peaceful agreements under the one China principle.

The two sides can start discussion about political relations under the special condition before reunification in a pragmatic manner, he said.

He also suggested the two sides to step up contacts and exchanges on military issues "at an appropriate time" and talk about a military security mechanism of mutual trust, in a bid to stabilize cross-Straits relations and ease concerns about military security.

Chinese President Hu Jintao addresses a ceremony commemorating the 30th anniversary of the announcement of Message to Compatriots in Taiwan, held in Beijing, capital of China, on Dec. 31, 2008. The Chinese mainland commemorated the 30th anniversary of the announcement of Message to Compatriots in Taiwan here Wednesday with a ceremony. (Xinhua Photo)

The President's speech on the new year's eve came after the mainland and Taiwan realized historical direct links of transport, trade and post services.

Hu, also general secretary of the Communist Party of China Central Committee, sent a message in his speech which urged the Democratic Progressive Party (DPP) to "clearly understand the situation and stop secessionist activities".

"If the DPP could change its 'Taiwan independence' stance, we would make a positive response to them," he said.

He said that all those who had advocated or got involved in secessionist activities, or followed suit are welcome to return to the right direction of promoting peaceful development of cross-Straits ties.

To accompany his political stance, Hu made trade appeals to the island, proposing both sides should establish a collaboration mechanism by economic agreement which "would be mutually beneficial to both sides".

"We continue to welcome and support Taiwan companies' business in the mainland and encourage mainland enterprises to invest in Taiwan," he said. "We expect to normalize economic relations across the Straits and establish an economic cooperation mechanism."

The president also stressed the common cultural heritage inherited by the people living on both the mainland and the island, saying that all Chinese should promote China's traditional civilization with strengthened spiritual ties.

"We will continue to take measures to push forward cross-Straits cultural and educational exchange to a broader and higher stage, including conferring with Taiwan on a cultural and educational exchange protocol," Hu said.

He called on both the mainland and Taiwan to increase communication and exchange in all circles and the mainland will actively respond to any constructive proposals from the island which will boost peaceful development of the cross-Straits relations.

Hu was addressing a ceremony to commemorate the 30th anniversary of the mainland's major policy change on Taiwan.

Presided over by China's top legislator Wu Bangguo, the ceremony had drawn several other prominent delegates from the government, students and Taiwan compatriots living in the mainland to give speeches.

The Standing Committee of the National People's Congress (NPC),China's top legislature, issued the "Message to Compatriots in Taiwan" on Jan. 1, 1979.

In this statement, the mainland first proposed to end the military confrontation across the Taiwan Straits through dialogues and welcomed exchanges between the two sides.

Chinese President Hu Jintao (Front) addresses a ceremony commemorating the 30th anniversary of the announcement of Message to Compatriots in Taiwan, held in Beijing, capital of China, on Dec. 31, 2008. The Chinese mainland commemorated the 30th anniversary of the announcement of Message to Compatriots in Taiwan here Wednesday with a ceremony. (Xinhua Photo)