Taiwan has proposed the establishment of a cross-strait military buffer zone and a 'peaceful interaction framework' to ensure stability in the Asia-Pacific region. A 155-page report released yesterday by the island's National Security Council says: 'There should be a buffer zone where no military ships and aircraft are able to enter without prior notification to the other side of the Taiwan Strait.' The report, the first of its kind by Taiwan, identifies the mainland as the island's biggest threat - politically, militarily and economically. The report suggests that a demilitarised buffer zone and a military hotline are needed to ensure that no crises are allowed to developed in the region. The report predicts the People's Liberation Army will have 800 guided missiles aimed at the island by the end of the year, and says the PLA has set up 16 submarine patrol zones around Taiwan, allowing it to form an undersea blockade should war break out. But despite the threat, Taiwan would go ahead as planned and reduce the number of its troops by 100,000 to about 280,000 by 2008 to demonstrate the island's resolve and goodwill in upholding cross-strait peace. However, the report says the government should increase its defence budget to the equivalent of 3 per cent of gross domestic product to allow for the development of an elite defensive force. The island also promised not to use or develop weapons of mass destruction, while asking Beijing to reciprocate. Economically, the report says the mainland remains the biggest threat to Taiwan. It warns that over-reliance on the mainland market would hurt Taiwan by hollowing out the island's industries and giving the mainland the power to impose an economic blockade to force the island to submit to its political demands.