Officials in Taipei say the level of Taiwanese investment in mainland China has plunged over the last year.

The Taiwanese Investment Commission said indirect investment fell by more than eighty per cent in the last month August to September alone.

It said the devastating floods in China, tougher tax scrutiny there and fears about the personal safety of Taiwanese businessmen had made investors more cautious.

Correspondents say that despite a ban on direct trade and investment, Taiwanese firms have poured at least thirty-five billion dollars into mainland projects over the last decade through indirect channels, usually Hong Kong, although Taiwan has been wary of becoming too dependent on trade with the mainland.

Last week, a senior Taiwanese envoy met the Chinese President, Jiang Zemin in Beijing -- the first such high level talks since the civil war fifty years ago.