For the first time since 1949 Taiwan hosts negotiations with China – Chen Yunlin will meet President Ma
In a hugely symbolic gesture, Chen Yunlin, China's top negotiator on Taiwanese affairs, led an entourage of 60 officials in the first talks between Beijing and Taipei on the island.
Relations between the two sides have thawed since March  when the China-leaning Ma Yingjeou was elected president of Taiwan.
The flow of business between Taiwan and the mainland has also helped, with cross-strait trade reaching $104 billion (£66 billion) in the first nine months of this year , a near 17 per cent rise on 2007.
However, China still regards Taiwan as a renegade province which must be reunited with Beijing at all costs. Much of this week's negotiation will hinge on whether Mr Chen will recognise Mr Ma's government and address him as "President" when the two men meet on Thursday [6 November 2008]. If Mr Chen simply calls him "Mr", it would be a serious loss of face for Taiwan.
For his part, President Ma has pledged "not to budge an inch" on the issue of Taiwanese sovereignty ahead of the talks. Last week, almost a million Taiwanese took to the streets to protest against President Ma's pro-Beijing policy.
However President Ma has insisted he is not in thrall to Beijing and has noted that China still has 1,300 missiles pointed at the island. Taiwan also recently signed its largest-ever arms deal with the US, agreeing on a $6.5billion package of guided missiles, attack helicopters and other advanced weaponry. In anger, Beijing cancelled a series of meetings between Chinese and US generals.
Before Mr Chen's arrival, a small group of protesters managed to unfurl a banner reading "Bandit Chen Yunlin Get Out" from the seventh floor of his hotel. Other activists waved Taiwan's flag and the Free Tibet flag but were chased away by police.
The growing links with China have led many Taiwanese to conclude that the mainland is attempting to re-colonise the island by leaving it dependent on China for all of its business.
"I am bringing the goodwill wishes to Taiwan's 23 million compatriots from the mainland's 1.3 billion people," said Mr Chen. "This visit has not come easily. It is a historic moment. Only through talks can we build trust and only through cooperation can we create a win-win economic situation."
The two sides are expected to sign deals on China and Taiwan's first direct air and sea cargo links and a new passenger air route that does not have to pass through Hong Kong's airspace, a diversion that adds an hour to the journey. Taiwanese businessmen have welcomed the move and several delegations have made their entreaties to President Ma for closer ties in recent weeks.
Two weeks ago [October 2008], Mr Chen's deputy, Zhang Mingqing, was attacked and thrown to the ground on an informal visit to the southern Taiwanese city of Tainan.
Prosecutors have said they want Wang Tingyu, the Democratic Progressive Party politician responsible for the brawl, to serve 14 months in prison.