"Democracy, freedom, and human rights have been the core values shared between Taiwan and its allies," the Presidential Office said in a statement.

"The Presidential Office welcomes and appreciates the remarks by President Bush," it said.

The office said the remarks were especially significant since they were made in Kyodo, Japan, on the first stop of Bush's Asia visit.

Bush's unusually strong comments came during a tour in which he will visit Beijing for a brief summit with Chinese President Hu Jintao.

"We encourage China to continue down the road of reform and openness because the freer China is at home, the greater the welcome it will receive abroad," Bush said in what was billed as a keynote speech.

"Modern Taiwan is free and democratic and prosperous. By embracing freedom at all levels, Taiwan has delivered prosperity to its people and created a free and democratic Chinese society."

China, which regards Taiwan as part of its territory waiting to be reunified by force if necessary, was riled by the speech.

"Taiwan is a part of China, an inseparable part of China, and China does not brook any interference in its internal affairs," Foreign Minister Li Zhaoxing told AFP on the sidelines of an Asia-Pacific summit in South Korea which Bush will attend.

Taiwan's Presidential Office also responded positively to Bush's call for a peaceful solution to the disputes between Taipei and Beijing.

"Taiwan and the United States have been on the same stance, and President Chen Shui-bian have been working in that direction," it said.

China has repeatedly rejected Taiwan's offer to reopen rapprochement dialogue which Beijing unilaterally called off in 1995 after a landmark US visit by Lee Teng-hui, then Taiwan's president.

At the same time, Taipei's independence-leaning government has refused to embrace Beijing's "one China" policy, which regards the island as part of China.

Mindful of China's growing military threat, the Presidential Office said it hopes to see "a peaceful rise of China" and subsequent democracy and peace.

The Pentagon released a report earlier this year warning that China had deployed up to 730 ballistic missiles targeting the island.

It said Beijing's defense build-up could tip the military balance against Taiwan and pose a credible threat to other countries in the region.

Washington has been the leading arms supplier to the island despite its switching of diplomatic recognition from Taipei to Beijing in 1979.

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