Anti-China demonstrators hold placards as they march Saturday in Taipei to denounce the Economic Co-operation Framework Agreement planned with China. (Wally Santana/Associated Press)

Tens of thousands of people chanted anti-communist slogans as they marched in Taiwan's capital Saturday to protest a planned trade agreement with rival China that they say will undermine the island's self-rule and harm its economy.

Many protesters held signs reading, "It's a Shame to Embrace Communist China" and "Protect Taiwan, Protect Our Jobs" as they marched several kilometres along a main thoroughfare in Taipei to the presidential office building.

The opposition Democratic Progressive Party is calling for a referendum on the pact, saying Taiwanese have a right to express their views before it takes effect.

Police said about 32,000 people participated in the protest, while organizers said there were more than 100,000.

The government says the Economic Co-operation Framework Agreement, to be signed Tuesday in the Chinese city of Chongqing, will give Taiwanese companies tariff benefits in China that are similar to those received by southeast Asian countries under a separate trade pact with China.

The agreement is the jewel in the crown of Taiwan President Ma Ying-jeou's policy of seeking closer economic ties to ease tension across the Taiwan Strait, a flash point since the two sides split amid civil war in 1949.

But closer political and economic ties could also serve China's long-term goal of returning the self-ruled island to its control, the fundamental aim of its Taiwan policy.

"The trade pact would turn Taiwan into another Chinese territory like Hong Kong," said Chang Kuo-min, a factory worker from central Changhua county. "Taiwanese have worked so hard to achieve the democracy we have today, and we will not allow China to control us."

Farmer Wu Hsien-che dismissed China's acceptance of tariff-free imports of some Taiwanese farm products as "sugar-coated poison."

Polls paint different picture

Polls, however, show that more Taiwanese support the trade pact than oppose it. Most of the protesters Saturday were elderly people from central and south Taiwan, the stronghold of the pro-independence DPP.

DPP chairwoman Tsai Ing-wen said the pact would mainly benefit big businesses and make the poor poorer.

"China is incorporating our businesses into its industrial chain step by step and making our economy part of its own economy," Tsai told the protesters. "We take to the street today to safeguard the interests of the next generations."

The DPP says Taiwanese may gain short-term benefits from the tariff cuts, but that many local factories may be forced to shut down in a few years under an onslaught of cheap Chinese goods.

Premier Wu Dun-yih has said the deal will eventually create 260,000 jobs in Taiwan by attracting more Taiwanese and foreign investment on the island.

Under the trade pact, Taiwanese companies will receive tariff advantages on 539 products exported to China, while Chinese companies will receive advantages on 267 products in the Taiwan market.

Bilateral trade totals about $110 billion a year, with $50 billion in Taiwan's favour.

Since losing the presidency to Ma in 2008, the DPP has won six out of seven legislative byelections and scored important gains in a series of local polls.

It hopes to use unhappiness over Ma's China policies — particularly the trade pact — to achieve big gains in mayoral elections later this year and ultimately win the 2012 presidential election.

On Saturday, Ma said the trade agreement will be submitted to Taiwan's legislature for approval next month. His ruling Nationalist Party holds a majority of the seats and the pact is expected to pass easily.