Taiwan has said it plans to slash its armed forces by up to 20 percent from 215,000 over the next five years, in the latest sign of warming ties with former rival China.

Defence Minister Yen Ming said the military would be cut to 170,000-190,000, but that defence capabilities would not be compromised in the project to build "smaller but leaner and more professional armed forces".

"The planned manpower adjustment will be carried out in stages contingent upon the government's budgets, the acquisition of new weapons and demographic changes," he told reporters late Monday.

Yen said the cuts would come from across the army, navy and air force but did not give a breakdown.

Taiwan's military -- relatively large for its population of 23 million -- is a legacy of decades of tensions with China, which still regards the island as part of its territory after the two split at the end of a civil war in 1949.

The self-governed island's forces hit a record 600,000 in the 1940s and '50s during the Cold War when tensions across the Taiwan Straits were high, but numbers fell steadily to around 400,000 in the 1990s and to its current size following progressive cuts.

Ties have improved dramatically since President Ma Ying-jeou of the China-friendly Kuomintang party came to power in 2008, promising to boost cross-strait trade and tourism. He was re-elected in January 2012.

Despite the easing of tensions with Taiwan's giant neighbour, Ma says the island needs to maintain sufficient self-defence while pressing for dialogue with Beijing.

In January 2010, the US government announced a weapons package for Taiwan that includes Patriot missiles, Black Hawk helicopters and equipment for Taiwan's F-16 fleet, but no submarines or new fighter aircraft.

China's surging economic power has been matched by increasing military might, including investments in aircraft carriers, anti-ship ballistic missiles, satellites and other hardware.

China has said it wants to modernise its armed forces for defensive purposes, but some Taiwanese analysts view the expansion as geared in part at reclaiming the island as well as bolstering its military prowess as maritime disputes with its neighbours simmer.

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