TAIPEI, Taiwan - Taiwan announced Thursday it will loosen restrictions on Chinese business and group travellers in a step towards resuming tourism exchanges with China.

Beijing suspended individual tourism permits to Taiwan in 2019 in a sign of worsening relations under Taiwanese President Tsai Ing-wen, who refuses to accept China's claim over the self-ruled island.

Taiwan reopened its borders to most tourists last October after years of Covid pandemic closures but travellers from mainland China remain barred.

The Mainland Affairs Council, the Taiwanese government body in charge of cross-strait relations, announced on Thursday that they will "loosen restrictions" on business travellers from China from Monday.

Individual Chinese nationals can also apply to enter Taiwan from another country from September 1, spokesman Jan Jyh-horng said.

"We will also allow Chinese tour groups to come to Taiwan, but initially to a maximum of 2,000 people allowed in per day," Jan said.

He said the resumption of group tours would happen in a month to allow for "preparation time" but no specific date was given.

"Taiwanese tour groups can travel to China but the initial number will be capped at 2,000 based on reciprocity," Jan said.

Currently, only individual Taiwanese travellers can enter China.

Asked if the policy change amounted to Taiwan extending an olive branch to China, Jan said Taipei hoped to "resume all levels of exchanges between both sides".

"We have decided today to announce our policy on organising group tours. We have made the first step and we hope they (China) can respond positively," he said

Taiwan experienced a sharp drop in mainland tourists after Tsai took office in 2016, with tourism operators attributing the decline to a more negative portrayal of the island in Chinese media as well as Beijing banning group tours.

Ringo Lee, chairman of a Taiwanese travel association, said Chinese tourists accounted for more than a third of the sector before the pandemic.

"The situation today is not a healthy situation and it has nothing to do with Covid-19," he said, calling Thursday's announcement "a drop in the bucket".

"I don't think it is enough. We need more (Chinese tourists)," he said. "The tourism sector is suffering and in dire straits."

Beijing has been slowly allowing its citizens to travel again, although Taiwan remains off its list.

China claims democratic Taiwan as its own and has long vowed to take the territory one day, by force if necessary.