"As long as we can be calm, rational, and maintain a flexible attitude, I believe we should be able to find a solution that allows both sides to maintain peaceful and stable relations," President Tsai Ing-wen said in a year-end news conference.
Tensions have grown since China suspended contacts with Tsai's administration in June over her refusal to endorse China's claim that Taiwan and the mainland are part of a single Chinese nation.
Earlier this week, China's first aircraft carrier and five other warships held drills that passed by Taiwan and sailed through the contested South China Sea, prompting Taipei to deploy fighter jets to monitor the fleet.
China maintains a standing threat to use force to achieve its goal of absorbing Taiwan.
Referring to such recent actions, Tsai said Beijing has been "gradually returning to the old ways of dividing, suppressing and even threatening and intimidating Taiwan. We hope that this is not a policy decision of the Beijing authorities."
Beijing has ratcheted up efforts to diplomatically isolate Taiwan, intervening to prevent the island's participation in international forums and establishing diplomatic relations with former Taiwan allies Gambia and Sao Tome and Principe.
The moves have been seen as effectively abandoning the unspoken diplomatic truce that lasted eight years under Tsai's China-friendly predecessor. Meanwhile, the number of Chinese tourists visiting the island has drastically fallen.
Tsai said her administration expected 2017 to bring uncertainties particularly in the first half, noting that the incoming US administration could potentially bring "changes in international affairs."
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