PRIME Minister Mr Li Peng has made a strong appeal to Taiwan to begin ''contacts'', hinting that concrete negotiations might follow later. But at a press conference yesterday Mr Li also warned the administration of Taiwan President Mr Lee Teng-hui against seeking independence. He cited a variety of circumstances in which Beijing might consider ''resolute action'' against the island. ''We must first establish contacts,'' Mr Li said. ''Whether a compromise could be reached is a matter for the second or the third step.'' Mr Li was asked whether there was any significance to the appeal, made in his government work report, for contacts ''between the two sides'', as opposed to Beijing's traditional appeal for contacts ''between the two [ruling political] parties''. Mr Li said there was a new significance because in addition to the Kuomintang, Beijing ''also welcomes contacts with all other political forces'' in Taiwan which favoured unification. The Prime Minister indicated Beijing had no intention to freeze Taiwan out of the international economic community. He said Beijing had told nations with which it had ties that they could develop economic and trading relations with Taiwan provided no diplomatic or ''official'' exchanges took place. However, Mr Li yesterday enumerated the ''very special circumstances'' under which Beijing might consider ''resolute measures'' against Taipei. ''If the forces of Taiwan independence run rampant, or if the forces promoting 'One China, One Taiwan' run rampant, or if there is complete social chaos in Taiwan'' Beijing would act, he said. The premier said the measures to be taken would depend on circumstances. ''I do not want to see such an event happen,'' he said. Informed sources said Mr Li's relatively hard-line remarks echoed speeches made by patriarch Mr Deng Xiaoping in recent months. In its latest issue, the Chinese-affiliated journal The Mirror quoted Mr Deng as saying China would adopt ''strong and forceful measures to solve the Taiwan problem''. He said the military option would be taken ''if [Taiwan authorities] were to, in the name of Taiwanese localisation, fabricate one China one Taiwan, Taiwanese independence or if they were to collude with foreign forces to interfere in China's domestic affairs''. But Mr Deng also said that having already waited 43 years, Beijing could still await the moment when Taipei thought the time was ripe to begin negotiations. ''We hope that, being Chinese, Taiwan's Mr Lee Teng-hui will not become history's man of guilt,'' he said. Meanwhile, The Mirror reported that military leaders including General Liu Huaqing had also indicated Beijing would ''pay any price'' to crush pro-independence ''conspiracies''. It said certain unnamed generals had suggested the option of an ''economic blockade'' against Taiwan. The journal quoted General Liu as saying Beijing should ''remain on high alert and be well-prepared'' against efforts by Taipei to import sophisticated weapons.