A Taiwanese warship has mistakenly launched a supersonic 'aircraft carrier killer' missile towards China killing a fishermen as ties between the island and its once bitter rival deteriorate, reports Daily Mail.

The domestically developed Hsiung-feng III (Brave Wind) missile, with a range of 200 miles, flew about 46 miles before plunging into waters off Penghu, a Taiwanese-administered island group in the Taiwan Strait.

It struck a a fishing boat off the island, killing the captain of the ship and injuring three other people.

The navy said it was not immediately clear how the missile had come to be launched, but suggested it could have been due to human error.

'Our initial investigation found that the operation was not done in accordance with normal procedure,' Vice Admiral Mei Chia-shu told reporters, adding that an investigation was under way.

The missile was fired during a drill at around 8:10 am from a 500-tonne missile ship docked at a naval base in the southern city of Tsoying and flew in the direction of China.

Helicopters and navy ships were sent to search for the missile, Mei said, adding that the military had reported the gaffe to the island's top security body, the National Security Conference.

Taiwan's Mainland Affairs Council, which handles China policy, declined to say whether the incident had been reported to Beijing.

Ties between Taipei and Beijing have deteriorated noticeably since President Tsai Ing-wen of the China-sceptic Democratic Progressive Party (DPP) was elected in January.

China still insists that self-ruling Taiwan is part of its territory, even though the two sides split in 1949 after a civil war, and has not ruled out using force to bring about reunification.

However, yesterday Taiwan's government said it will continue to look for ways to maintain dialogue with China.

'No matter what party is in government in Taiwan, we always have a single, common objective: to maintain peace and stability in the Taiwan Strait,' Tsai told reporters during a visit to Paraguay, Taiwan's sole diplomatic ally in South America.

'We will continue the dialogue with mainland China, as even though, probably at this moment official negotiation channels have been temporarily interrupted, there still exist other options for communication and dialogue,' she said, speaking through an interpreter.

On Wednesday, Taiwan Premier Lin Chuan said the government's approach was for positive interactions with China to continue, based on existing foundations.

'There must be willingness on both sides to move forward on the relationship,' Lin told reporters about the suspension issue at a function in southern Taiwan.