Taiwan President Ma Ying-jeou said Thursday that Taiwan will consider further loosening rules on local technology companies' investment in China to grab a bigger slice in the rapidly growing market.

In an interview with a group of foreign reporters, he also reiterated Taiwan's stand that China needs to dismantle or remove the increasing number of missiles it has aimed at the island before any formal talks on a peace treaty between the two sides are possible.

Taiwan's relations with the mainland have improved since Ma's election in March 2008. Earlier this year, for example, China agreed that Taiwan could be an observer at the World Health Assembly, the governing body of the World Health Organization. The two sides have also established direct air links and eased restrictions on tourism and are negotiating toward a broad economic pact.

Ma said that while Taiwan will not lead other countries in bringing new technologies to China, it might follow others who begin manufacturing advanced technology products on the mainland.

"If other countries with similar technologies have already invested on the mainland, obviously we will consider whether we should go in, in order to have better market share," Ma said. In those areas where Taiwan still has "a very strong competitive edge vis-a-vis other countries, we want to keep them here," Ma said.

For instance, so far the government has not decided to allow makers of liquid crystal display panels to set up factories to make the panels in the mainland, he said. LCD makers now have only module-assembly plants in China.

Many have called for the Taiwan government to loosen the ban on the chip and flat-panel sectors given major chip makers such as Intel Corp. (INTC) and flat-panel makers such as Samsung Electronics Co. (005930.SE) have or plan to build advanced factories in China.

While Ma said economic issues are "more urgent" to the well-being of Taiwanese citizens, he continued to press for the removal of missiles across the strait aimed at the island.

"Before we start any peace negotiation with the mainland, we certainly would like to see those missiles either removed or dismantled," he said

Ma also said Taiwan remains keen to buy F-16 jet fighters from the U.S., "but so far we haven't received a positive attitude from the United States, partly because of the opposition from the Chinese mainland."

Taiwan is trying to buy more weapons from the U.S., including the F-16 jets, that would allow it to more effectively counter China's growing fleet of Russian-built warplanes.

Taiwan's participation in the World Health Assembly's meeting in May--as an observer and using the name "Chinese Taipei"--could serve as a model for future inclusion in such events, Ma said.

"We may be able to apply this formula to other specialized agencies of the United Nations," he said.

Taiwan hopes to participate in U.N.-sponsored climate talks in Copenhagen in December and in the International Civil Aviation Organization.

Such agencies are closely related to the welfare of Taiwanese people, Ma said, noting the devastation wrought by Typhoon Morakot and the numerous flights that now link the island to the mainland.

"We certainly hope mainland China will take that into consideration in order not to obstruct our participation," he said. "We are entitled to be part of the international system, and we have been a very constructive one."

Taiwan's participation in international meetings and organizations has long been a subject of dispute with Beijing, which claims Taiwan as part of its territory and which in the past has use its diplomatic clout to keep the island internationally isolated. But recently, China has shown greater flexibility on the issue.

-By Patricia Jiayi Ho, Dow Jones Newswires; (8610) 6588 5848