Taiwan President Ma Ying-jeou has met China's senior envoy to the island in the highest level contact since 1949.
The meeting was brought forward five hours to avoid continuing protests by Taiwanese pro-independence groups.
Mr Ma defended his agreements with Beijing, saying they did not damage Taiwan's sovereignty.
The Chinese envoy, Chen Yunlin, has signed economic agreements with Taiwan but has also been trapped in a hotel by Taiwan pro-independence protesters.
Mr Chen's meeting with Mr Ma at a government guest house lasted just five minutes and involved the exchange of gifts - a vase from Mr Ma and a large scroll painting of a horse from Mr Chen.
Mr Ma said the meeting "symbolises a major step forward for cross-strait ties," and will "contribute to cross-strait stability and prosperity".
"But we cannot deny that differences and challenges still exist, such as Taiwan's security and Taiwan's position in the international community.
"In the future both sides should see the reality and should not deny each other's existence in order to promote the welfare of the people and cross-strait peace and to resolve our differences," he said in comments broadcast live.
He is the first leader of Taiwan to meet with a senior Chinese official since the end of a civil war in 1949 which saw the communists take power in Beijing, and the Kuomintang retreat to Taiwan to create a self-governing entity which China still claims as its own.
Days of vociferous protest by Taiwanese who claim Mr Ma is selling out their independent identity led to a change of schedule for the high-level meeting.
Rowdy protesters still gathered outside the venue, one day after hundreds of protesters confined Mr Chen to a hotel where he was having dinner until well after midnight.
Taiwanese pro-independence groups accuse Mr Ma of selling out sovereignty in return for lucrative business deals.
Mr Ma's overtures, aimed at ending decades of political rivalry with Beijing, have sparked fierce protests in Taiwan since August.
Thousands of police have been deployed to ensure Mr Chen's safety during his visit, after his deputy Zhang Mingqing was knocked to the ground by protesters during a visit last month.
Before meeting Mr Chen, Mr Ma addressed Taiwan through a press conference, saying the negotiations were "mutually beneficial to create a win-win situation for both sides, which will benefit Taiwan.
"I did not concede an inch of Taiwan's sovereignty so as president I have not made any mistakes.
"The Republic of China is a sovereign, independent country," he said, using the formal name for Taiwan and the island's way of differentiating itself from the People's Republic of China.
Deals were signed to introduce direct cargo shipping and postal services, increase passenger flights, shorten existing routes across the Taiwan Strait, and allow more mainland tourists to visit Taiwan.
Closer cooperation was promised on food safety.
The two sides also agreed a wildlife swap, with China receiving a deer and a Formosa serow, a goat-like animal native to Taiwan, in exchange for two pandas.
Previously, sovereignty issues involving vessels and crews forced costly detours through third countries, while China-Taiwan flights were forced to stop in Hong Kong or Macau.
strait 海峽 困境,危難
entity 實體 存在
confined 幽禁的;監禁的 受限制的;狹窄的
differentiating 使有差異;構成...間的差別 區別,區分;鑑別