Taiwan is working on setting up a think tank to coordinate contacts with the Chinese military, a Defense Ministry official said Monday, in what would be one of the most significant steps so far in rapidly improving relations between the sides. The official's comments follow last week's assertion by Chinese Premier Wen Jiabao that Beijing is ready to hold talks with Taiwan on political and military issues aimed at ending hostility with the rival island. Since the inauguration of Taiwanese President Ma Ying-jeou in May, long-standing tensions between Taiwan and China have begun to recede, prompted by Ma's renunciation of his predecessor's pro-independence policies, and his continuing efforts to deepen the island's economic relations with the mainland. The Taiwanese Defense Ministry official told The Associated Press that the purpose of the new liaison organization would be to build mutual trust with the Chinese military "on a step by step basis." He spoke on condition of anonymity because of the sensitivity of the subject . "We want to establish a think tank to reduce the unsafe factors in relations between the sides," he said, without elaborating.