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Lai calls for talks with China, says war has no winners

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China detests Lai as a "separatist"

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Lai also unveils plans for sovereign wealth fund

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President marks one year in office

(Recasts, adds comments on sovereign wealth fund, visit to

Computex trade show, paragraphs 10-14, byline)

By Ben Blanchard and Yimou Lee

TAIPEI, May 20 (Reuters) - Taiwan wants peace and

dialogue with China but the government must continue to

strengthen the island's defences, President Lai Ching-te said on

Tuesday as he completed one year in office.

China calls Lai a "separatist" and has rebuffed his multiple

offers for talks. Lai rejects China's sovereignty claims over

the democratic and separately governed island, saying only

Taiwan's people can decide their future.

The government has warned that Beijing could mark the

anniversary with military drills but speaking to reporters at

the presidential office in central Taipei, Lai offered a message

of peace.

"I, too, am committed to peace. Because peace is priceless

and war has no winners. But when it comes to seeking peace, we

cannot have dreams nor illusions," he said.

Taiwan will continue to strengthen its defences as preparing

for war is the best way to avoid it, Lai added.

"I also reiterate here - Taiwan is happy to have exchanges

and cooperation with China as long as there is reciprocal

dignity. Using exchanges to replace hemming in, dialogue to

replace confrontation."

China's Taiwan Affairs Office did not immediately respond to

a request for comment.

China's defence ministry last week said Lai was a "Taiwan

Strait crisis maker" who had increased antagonism and

confrontation and undermined peace and stability.

Lai also faces a challenge from possible U.S. tariffs,

currently on pause, and said talks with Washington were

continuing "smoothly".

The government also plans to establish a sovereign wealth

fund to boost the tech-focused economy, he added.

"The government will set up a sovereign fund to create a

national investment platform, making full use of Taiwan's

industrial strengths, led by the government, in collaboration

with the strengths of private enterprises," Lai said, without

giving details.

After finishing his media event, Lai attended the opening

ceremony for the ongoing Computex trade show, where Taiwan-born

Jensen Huang, the CEO of AI darling Nvidia ( NVDA ), is the star

attraction.

Lai visited the booths of Nvidia ( NVDA ) suppliers and partners,

including Foxconn and Mediatek ( MDTTF ), chatting

with senior executives there.

Last month, China held war games code-named "Strait

Thunder-2025A" around Taiwan, the "A" at its end suggesting

there could be more to come.

China called its May 2024 drills just after Lai took office

"Joint Sword-2024A", and in October of that year staged "Joint

Sword-2024B".

In a daily report detailing Chinese military activities,

Taiwan's defence ministry said in the past 24 hours it had

detected six Chinese planes and 11 vessels near the island.