The two sides have agreed to treble direct passenger flights to 108 per week and expand services to a total of 21 mainland cities, up from the current five. They will let direct cargo shipments pass between 11 Taiwan seaports and 63 in China, tax free.
Until now, flights between the two territories have to pass through foreign airspace. Ships have to traverse another country's waters.
They also agreed to co-operate on food safety in the wake of a number of international scandals involving toxic food. The issue had caused widespread alarm on the island, after a woman and three children were poisoned by milk, and the industrial chemical melamine was found in dairy products from the mainland, all of which have since been banned.
The agreements, which analysts have said could be worth billions of dollars at a time of a worldwide crisis, mark a step forward in the relationship between the two sides after almost 60 years of hostilities.
Beijing considers Taiwan part of its territory and has said that it will use force to retake if necessary.
For its part Taipei is unwilling to give up its de facto independence even if the last elections were won by Ma Ying-jeou, of the Kuomintang, which seeks better relations with the mainland.
Several political, human rights and religious groups planned demonstrations to coincide with Chen’s visit to protest the mainland’s repression of pro-democracy and human rights activists.
More than 5,000 police officers were deployed to safeguard Mr Chen as he travelled from the airport into Taipei to his hotel.
The protests were also joined here and there by Tibetan independence supporters and Falun Gong followers.