Taiwan's president on Monday named loyalist and veteran politician Chang Chun-hsiung to serve as the island's premier, as the ruling Democratic Progressive Party gears up for presidential elections next March.

Chang, 68, is expected to reshuffle the Cabinet later this week in a bid to improve government efficiency and give candidate Frank Hsieh a leg up in what is expected to be a tightly contested presidential race against Ma Ying-jeou of the main opposition Nationalists.

Chang replaces Su Tseng-chang, who resigned Saturday, days after Hsieh defeated him in the DPP's presidential primary.

Speaking on live television from the presidential office, Chen praised Chang as an experienced operator, who could help break a long-standing logjam in the 219-member Legislature over key government bills.

"With his rich political experience and his calm manner I believe that he will open up a new era in government over the next year," Chen said.

Just last week a legislative brawl broke out over DPP unhappiness with the opposition's stalling of the 2007 budget and counter-attempts by the opposition to pass a long-mooted electoral reform bill.

Standing next to Chen, Chang enthusiastically accepted his new appointment.

"I realize the job ahead will be a big challenge but I'm willing to shoulder it with an attitude of sincerity and modesty," he said.

In his televised remarks, Chen called on Chang to use his experience as the outgoing head of the semiofficial organization handling cultural and other exchanges with rival China to try to finalize negotiations with Beijing on a number of outstanding issues.

These include establishing direct cargo flights, weekend passenger charters, and expanding the number of Chinese tourists visiting Taiwan.

China and Taiwan split amid civil war in 1949, and in the absence of government-to-government negotiations, talks on the Taiwanese side were conducted until the mid-1990s by the Straits Exchange Foundation, which Chang has headed since June 2005.

For the past 10 years, China has refused to deal with the foundation, in protest of what it sees as the pro-independence stance of former President Lee Teng-hui, and Chen.

This marks Chang's second appointment as premier.

He previously served between October 2000 and January 2002 after Chen removed predecessor Tang Fei for opposing a DPP plan to halt the construction of a nuclear power plant, a project supported by the previous Nationalist government.

After acceding to the premiership, Chang announced the plant's construction was immediately being frozen, a move that triggered months of protests by the Nationalists, sending stock prices plummeting.