THE signing yesterday of the first formal agreements between China and Taiwan after more than 40 years estrangement and confrontation marks a big step towards a more normal relationship, despite the minor nature of the accords themselves. Though signed by representatives of ''non-official, non-political'' organisations, the agreements were the result of the highest level exchanges since the Kuomintang fled the mainland in 1949. The decision to meet again regularly and provide a permanent channel of communication is highly important. It is a sign of Taiwan's self-confidence as a political and economic entity, aware that its wealth and influence will continue to grow and hopeful that its diplomatic isolation will diminish. It is also a sign that Beijing is sufficiently aware of Taiwan's importance to the mainland economy, and of its international respectability, to understand the need to co-operate. However, the success of the talks should not be mistaken for a giant stride towards reunification. On the contrary, they show the limits to each side's readiness to move. Taiwan, though still officially committed to reunification as an ideal, is not about to court economic or political domination by China. While China refused to agree to greater protection for Taiwanese investments, a privilege it reserves for foreign countries, Taiwan remains unwilling to tackle the ''political'' questions of direct trade, transport and communication links. Matching the level of integration with China's economy achieved by Hongkong in recent years would destroy Taiwan's policy of keeping China at arms-length politically. Taiwan will look to Hongkong's transition to Chinese rule for signs of how well China keeps its promises but the myth that the process will serve as a model for reunification should be laid to rest.