TAIPEI, TAIWAN - Taiwan held a virtual military exercise Friday, simulating an invasion of the island by China despite warming ties between the once bitter rivals, a report said.

The drill, part of the annual 'Han Kuang' war games, was played out entirely on computers in a Taipei military command centre presided over by President Ma Ying-jeou, the United Evening News reported.

The computers simulated a ground attack by 200,000 Chinese troops, with Taiwan eventually gaining the upper hand after a series of battles, it said.

A scenario in which Chinese troops attempt to capture Taiwan's leaders was omitted from this year's drill because of the improvement in cross-strait relations since Ma took office in May last year, it said.

The defence ministry declined to comment.

China and Taiwan have been governed separately since the end of a civil war in 1949, but Beijing views the island as part of its territory awaiting reunification, by force if necessary.

China has repeatedly threatened to invade the island should it declare formal independence.