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China told the United States it would never allow an independent Taiwan, but would work for peaceful reunification.

Chinese President Hu Jintao told U.S. President George W. Bush overnight he appreciated the U.S. reaffirmation of the "one-China" policy and opposition to "the words and actions of Taiwan authorities aimed at altering Taiwan's status," Xinhua news agency reported on Sunday.

The United States is Taiwan's biggest ally and arms supplier but recognises Beijing's one-China policy. Bush told Chinese Premier Wen Jiabao this month he opposed any unilateral decision by Beijing or Taiwan to change the status quo.

"On the Taiwan question, the Chinese government is willing to achieve the reunification peacefully with utmost sincerity and greatest efforts, but Taiwan independence cannot be tolerated," Xinhua quoted Hu as telling Bush in an overnight phone call.

"Bush said the stance of the U.S. government on the Taiwan issue was clear cut, and the U.S. side opposed any words and actions to change the status quo of Taiwan unilaterally," the agency said.

For his part, Taiwan "President" Chen Shui-bian reiterated his opposition to the one China policy at a gathering organised chiefly to campaign for his re-election in March.

"Republic of China (ROC, Taiwan's official name) in the past stayed on the mainland, and later ROC moved to Taiwan...and now, the ROC is Taiwan," said Chen in Taipei on Sunday.

Despite political friction and rhetoric, two-way trade between the Chinese mainland and Taiwan has soared over recent years and is expected to top $50 billion this year, the Financial News said on Sunday, citing Commerce Ministry figures.

Two-way trade amounted to $46.63 billion in the first 10 months of this year, up 29.4 percent from the year-earlier period, it said.

The mainland's exports to Taiwan rose 33.5 percent to $7.04 billion between January and October, while imports from the island rose 28.7 percent to $39.59 billion, it said.

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