Taiwan independence would lead to "disaster", Chinese President Xi Jinping said on Wednesday, pledging efforts for peaceful "reunification" with the self-ruled island but warning China would not renounce the use of force.

Speaking at Beijing's Great Hall of the People on the 40th anniversary of a key Taiwan policy statement, Xi said reunification must come under a one-China principle that accepts Taiwan as part of China, anathema to supporters of Taiwan independence.

All people in Taiwan must "clearly recognise that Taiwan independence would only bring profound disaster to Taiwan", Xi said.

"We are willing to create broad space for peaceful reunification, but will leave no room for any form of separatist activities," he said.

"We make no promise to renounce the use of force and reserve the option of taking all necessary means," he said, adding that the issue is China's internal affair and that it would permit "no external interference".

Chinese Nationalist forces fled to Taiwan in December of 1949 after losing a civil war to the communists.

While today the two sides have a close business, cultural and personal links, proudly democratic Taiwan has shown no interest in being ruled by autocratic Beijing.

- Reuters