China and Taiwan today moved closer to re-starting formal dialogue on the second day of the visit of Taiwan's senior negotiator to Shanghai. Koo Chen-foo, the chairman of the Taiwan Straits Exchange Foundation, invited his Chinese counterpart Wang Daohan to visit Taipei - and Mr Wang accepted. Unlike yesterday's formal meeting, today's talks took place over tea at a luxury hotel. East Asia Today presenter Kathryn Davies spoke to the BBC's Beijing correspondent Duncan Hewitt, who began by telling her about the negotiators' visit to the opera:

Duncan Hewitt: They went to see a performance of extracts from different operas, including Mr Koo's favourite, called the "The Story of the Empty City". It's all about how a great Chinese strategist from ancient history was able to outwit his rivals and trick them into leaving his state alone. People wondered if there was some sort of metaphor here. Certainly Koo Chen-foo has been trying to press ahead in his talks with Mr Wang, and they seem to have agreed to some sort of meetings in the future. This will at least give them the chance to talk further.

Kathryn Davies: I understand also that for Mr Koo and his wife, today was something of a trip down memory lane.

Duncan Hewitt: That's right - this is another aspect of the visit which is a sign of the human cost of the separation of China and Taiwan. Koo Chen-foo and his wife have not been back to Shanghai where they had both lived for 53 years. Mr Koo had particularly asked to go to the Shanghai Stock Exchange because he was involved in founding the Stock Exchange in 1945. He was able to walk around this brand new building which has been put up in the last few years, and see for himself what progress has been made. He seemed quite impressed by that - he also got a round of applause when he arrived. His wife was actually able to meet some schoolmates from middle school days who, again, she hadn't seen for half a century.

Kathryn Davies: Just how much of a breakthrough is the fact that Wang Daohan has agreed to go to Taiwan?

Duncan Hewitt: It's one of those classic examples of this rather complicated situation. Either it doesn't really mean anything at all because it's simply a visit - on the other hand it probably has great symbolic meaning as it would be a reciprocation of this visit. Of course everyone is saying that in these talks even though substance has been quite limited, the very fact that the two sides can talk is extremely important, particularly given how high tensions were two or three years ago.

Kathryn Davies: But aren't there still major differences on the political front?

Duncan Hewitt: Everyone's waiting to see what will happen when Koo Chen-foo meets China's President Jiang Zemin in Beijing, which is scheduled for Sunday. But it became clear again today from the two sides that despite a very friendly atmosphere and `face' they've been putting on this, they're still insisting on their fundamental positions. China's saying that Taiwan must accept that it's part of China, and the Taiwanese don't want any higher level political talks unless they're on a totally equal footing. There's certainly plenty to still talk about it.