The head of Taiwan's ruling Kuomintang party said Sunday he was "optimistic" about the island joining a Beijing-led regional development bank, despite China having last month rejected Taiwan's bid to join.

Eric Chu, who arrived in Shanghai on Saturday in the first visit to the mainland by a KMT chief since 2008, made the comments ahead of an expected meeting with Chinese leader Xi Jinping in Beijing on Monday.

China last month dashed the island's hopes of becoming a founding member of the Asian Infrastructure Investment Bank (AIIB), but a foreign ministry spokesman said it could join under an "appropriate name."

"Joining the AIIB is good," Chu told reporters on the sidelines of a cross-strait forum in Shanghai. "I think we are positive and optimistic (about the prospect)."

Asked if Taiwan could join under the name "Chinese Taipei," Chu replied: "That is what we have proposed, our bottom-line."

China has considered Taiwan part of its sovereign territory since the KMT fled the mainland in 1949 after defeat at the hands of the Chinese Communist Party.

As a result, China routinely opposes moves by Taiwan to join international organisations, arguing it is not a country.

Chu urged China to allow Taiwan to play a greater role in what he called international activities.

"I... hope we can let Taiwan be more active in international activities and the international space," he said in a speech at the forum, which was attended by senior Communist Party official Yu Zhengsheng.

Yu said that the forum could "explore the feasibility for a proposal of participation and qualifications" of Taiwan in the AIIB.

Relations between the two sides have warmed after Taiwan President Ma Ying-jeou of the KMT party came to power in 2008.

In 2010, the two sides signed a trade pact known as the Economic Cooperation Framework Agreement, widely seen as the boldest step yet towards reconciliation.

But the KMT's embrace of China has proved unpopular among some in Taiwan.

In March last year, around 200 students occupied parliament for more than three weeks to demonstrate against a services trade pact, garnering the support of thousands who rallied in what became known as the "Sunflower Movement".

The KMT suffered its worst-ever showing in local polls in November -- seen as a barometer for upcoming presidential elections in 2016.

At the Shanghai forum, attended by academics and business executives from both Taiwan and mainland China, Chu made reference to opposition towards his party's policies at home.

"In Taiwan, there are different voices. We must use a positive mentality. A healthy mentality. A positive attitude to face the development of cross-strait ties," he said.