Taiwan said Thursday it has begun testing a billion-dollar early warning radar system, designed to give an extra six minutes' warning of any Chinese missile attack, which is nearing completion.

Deputy Defence Minister Chao Shih-chang said the installation of the state-of-the-art, long-range radar system, supplied by US defence group Raytheon, has entered its final stage.

"The radar system has undergone initial tests lately," Chao said in response to a question in parliament.

"And the results showed that it has successfully linked to the Patriot anti-missile units and the Heng Shan military command," he said, referring to the emergency military command centre in the capital Taipei.

Construction of the ultra-high-frequency radar -- delayed for three years partly due to the collapse of the road to the mountainous construction site -- is due to be finished next year, the state Central News Agency said.

"This is the most advanced system of its kind in the world... it is crucial as the Chinese communists are aiming at Taiwan with more than 1,000 ballistic missiles," Chao said, adding it is also capable of detecting cruise missiles.

But critics say the system, which will cost more than 30 billion Taiwan dollars (1.0 billion US), is too costly given it will only provide an additional six minutes of warning.

Ties between Taipei and Beijing have improved markedly since Ma Ying-jeou of the China-friendly Kuomintang party came to power in 2008, promising to boost trade links and allow more Chinese tourists to visit the island.

But Beijing still sees the island as part of its territory awaiting reunification, by force if necessary, even though Taiwan has governed itself since 1949 at the end of a civil war.

China has repeatedly threatened to invade Taiwan should the island declare formal independence, prompting Taipei to seek more advanced weapons, largely from the United States.