China and Taiwan signed a pact to sharply expand flights between them and allow direct shipping links for the first time, largely erasing some of the biggest remaining obstacles to full business ties between the longtime rivals.

The agreement highlights the determination of leaders in both Taiwan and China to improve relations since Taiwanese President Ma Ying-jeou took office in May after running on a platform of normalizing economic relations with China. Mr. Ma has come under heavy criticism from some in Taiwan for that policy, as the island's economy has weakened despite the moves to open to China's large economy.

Negotiators from Taiwan and China on Tuesday agreed to allow a total of 108 round-trip passenger flights between their cities each week, up from 18 round-trip flights currently. And they will allow 60 cargo flights a month, the first time that goods will be able to travel nonstop between Taiwan and China, despite bilateral trade that has grown rapidly in recent years.