Taiwan’s economy grew a blistering 10.47 percent in 2010, its fastest rate in 23 years, according to a government estimate, with analysts saying trade with former rival China was a key driver of the surge.

Improving ties between China and Taiwan has provided a massive shot in the arms for the island's exporters but economists warn that a pact between the two last year could also the end up restricting the Taipei's economic independence.

The Directorate General of Budget, Accounting and Statistics said the growth was the best since 1987 but warned that the figure for next 12 months would be almost half of that due to the slow recovery in developed economies.

"China was a major contributing factor to Taiwan's trade growth last year, and the two economies are closely linked," said Cheng Cheng-mount, an economist at Citibank Taiwan.

The finance ministry said exports jumped 34.8 percent to $274.64 billion last year, with those to China and Kong Kong hitting a record high $114.75 billion, or 41.8 percent of the overall figure.

Economic growth of 10.3 percent in the Chinese economy, now the world's second-largest, helped make the mainland a market hungry for Taiwanese-made products.

Taiwan, which signed a sweeping trade deal with China in June, is tying its economic fortunes ever more to the mainland, while seeking to keep a political distance with Beijing which considers