TAIPEI, TAIWAN, FEB. 26 -- Taiwan is moving toward a major expansion of its unofficial contacts with mainland China, according to local press reports and other sources here.

The breakaway province and the communist mainland are still technically locked in a state of war, but Taiwan decided late last year to lift a ban on visits to the mainland by citizens who have relatives there.

The sources indicate that Taiwan's ruling Kuomintang, or Nationalist Party, is planning to allow more trade with the mainland and exchanges of unofficial sports and cultural delegations. Having permitted Taiwanese citizens to visit relatives on the mainland since November, the party is planning to allow citizens who have no relatives there to make the trip, the sources said.

The changes are expected to be disclosed when the party holds its 13th national congress in early July, party members have said.

"I believe that in July there will be a big jump in contacts with the mainland," said Chao Shao-kong, a ruling party legislator who favors increased unofficial ties with the mainland.

The Kuomintang has been under heavy pressure from Taiwanese business executives who, faced with protectionist sentiment in the United States and elsewhere, want to expand an already lively trade with the mainland. Indirect trade between Taiwan and the mainland, conducted through Hong Kong and other points, came to approximately $2 billion last year. Direct trade is banned on the grounds that it would be dangerous to become too dependent on a communist country for trade.

But many Taiwan business executives are reported to believe that they are at a competitive disadvantage dealing through intermediaries. Under new guidelines being considered, they would be able to conclude purchase agreements directly for raw materials, such as coal and cotton. Shipments would still have to be made through third parties.

The opening to the mainland began with the late president Chiang Ching-kuo and is continuing under his successor, Lee Teng-hui.

The idea, as explained by Kuomintang officials, is to abandon Taiwan's defensive posture and go on the offensive to persuade mainlanders of the superiority of Taiwan's more open, capitalist system.

It is a more pragmatic approach that is likely to lead to attempts by Taiwan to reenter international organizations that it quit when the communists joined.

The Kuomintang appears to be pleased with the results of lifting the ban on visits. Many Taiwanese were shocked at the poverty and bureaucracy on the mainland and were happy to be home.

"Generally speaking, I think people have a much better understanding of the mainland," said a senior party official during a background briefing this week. More than 90,000 people are reported to have traveled to the mainland since travel restrictions were lifted.

According to legislator Chao, many Taiwanese are making false reports, pretending to be visiting relatives on the mainland while actually doing business there. Many are intrigued by the possibility of doing business on Hainan island, off China's southwest coast. Beijing has declared that Hainan will be a special economic zone where capitalistic practices will be permitted as long as they are productive.

China has welcomed the lifting of the ban, but has urged Taipei also to permit mainlanders to visit Taiwan.