The historic meeting came five hours earlier than planned to avoid chaotic demonstrations by Taiwan independence groups that threatened to lay siege to the capital. Hundreds of riot police shut down streets around the venue with barricades wrapped with barbed wire.
During the five-minute meeting, Taiwanese President Ma Ying-jeou praised a signed by the rivals Tuesday. The deal increases aviation and shipping links. It also included measures for better cooperation with food safety issues.
The two sides decided to hold high-level talks every six months and tackle financial issues in the next meeting.
But Ma added, "We can't deny that there still are differences and challenges, especially regarding Taiwan's security and international status."
The two sides split when the Communists won a bloody civil war and took over the mainland in 1949. Beijing doesn't formally recognize Taiwan's democratically elected government and insists the island is a Chinese province that must unify eventually.
China has repeatedly threatened to use its massive military to force the Taiwanese to rejoin the mainland.
The Chinese envoy didn't give a speech and only uttered a couple remarks to Ma as he presented the Taiwanese leader with a painting of a horse while they met in a government guesthouse. Chen said the artwork was done by a famous painter.
"I offer this to you," he said.
Chen was careful not to address Ma as "president," sticking to Beijing's policy of avoiding any terms or symbols that suggest Taiwan is an independent country.
This angered many of the hundreds of protesters who gathered in the streets around the meeting venue, blowing air horns and scuffling with riot police armed with shields. After the meeting, the crowd began marching to the Presidential Office.
Chang Bang-ni, a 45-year-old businesswoman, said the Chinese envoy snubbed Taiwan by not calling the island's leader "president."
"This shows that China is only treating Taiwan like a local government," said Chang, who skipped work to protest.
Another protester, Ko Kai-liang, accused Ma of embarrassing Taiwan by being too accommodating to the Chinese.
"Ma is sucking up to China by degrading Taiwan's sovereignty and this humiliates our country," said Ko, 40, who works for a chemical company.
Protesters have dogged Chen since he began his five-day visit Monday. Nearly a 1,000 demonstrators surrounded a hotel Wednesday where he attended a dinner banquet, trapping him in the building until well past midnight.