Hong Kong opened a liaison office in Taiwan Tuesday and announced visitors from the island would no longer have to pay to visit, the latest signs of warming ties between Taiwan and China.

"The inauguration of the (Hong Kong Economic, Trade and Cultural Office) marks a new milestone in Hong Kong-Taiwan relations," Hong Kong's Financial Secretary John Tsang told reporters at an inauguration ceremony in Taipei.

In a gesture of goodwill, Tsang announced that from September 1 Taiwanese visiting Hong Kong would no longer have to pay to visit the southern Chinese city, a semi-autonomous former British colony.

Currently Taiwanese visitors must pay HK$160 ($20) for a single entry visa and HK$325 for a one-year multiple entry visa.

Taiwanese planning to visit the city would also now be able to make arrangements on the Internet free of charge, he said.

Hong Kong reverted to Chinese rule in 1997 under a system that guarantees rights and freedoms not enjoyed in the mainland.

Macau also set up a representative office in Taipei on Sunday.

The enhancement of ties between Taiwan and the two semi-autonomous Chinese territories has been made possible by the improvement of Taipei-Beijing relations, observers say.

Tensions with the mainland have eased markedly since the China-friendly Kuomintang government of Ma Ying-jeou came to power in 2008 on promises of beefing up trade links and allowing in more Chinese tourists. Ma was re-elected in January for a second and final four-year term.

Taiwan has governed itself since the end of a civil war in 1949.