YILAN, Taiwan (July 24): Taiwan hunkered down on Wednesday for the arrival of a strengthening Typhoon Gaemi, with financial markets shut, flights cancelled and two people killed, while the military went on stand-by amid torrential rain.

Gaemi, expected to be the strongest storm to hit Taiwan in eight years, is set to make landfall on its east coast late on Wednesday evening, weather authorities said. Its eye was hovering off Hualien county as of 8pm (1200GMT).

They upgraded Gaemi's status to a strong typhoon, packing gusts of up to 227kph (141mph) near its centre.

After crossing the Taiwan Strait, it is likely to hit the southeastern Chinese province of Fujian late on Thursday afternoon.

Financial markets will remain closed on Thursday, with work and school suspended for a second day, the government said.

Two people have been killed, the disaster management centre said — one by a falling tree and the other after part of a building fell on a car — and a further 201 injured.

"The next 24 hours will present a very severe challenge," Taiwan Premier Cho Jung-tai told a televised meeting of the emergency response centre.

In rural Yilan county, where the typhoon will first hit land, wind and rain gathered strength, shutting eateries as most roads emptied out.

"This could be the biggest typhoon in recent years," fishing boat captain Hung Chun told Reuters, adding that Yilan's harbour of Suao was packed with boats seeking shelter.

"It's charging directly towards the east coast and if it makes landfall here, the damage would be enormous."

The government said more than 8,000 people had been evacuated from sparsely populated mountain areas at high risk of landslides from the "extremely torrential rain".

Almost all domestic flights had been cancelled, along with 227 international flights, the transport ministry said.

On Thursday, all domestic flights will stop, and 185 international flights will be cancelled, it added.

However, TSMC, the world's largest contract chipmaker and a major supplier to Apple, said it expected its factories to maintain normal production during the typhoon, after it activated routine preparations.

Japanese media said the typhoon had also grounded all flights departing from and arriving at Miyako and Ishigaki in Japan's Okinawa prefecture, which lies in the storm's path.

Soldiers standing by

The typhoon was expected to bring rain of up to 1,800mm (70 inches) to some mountainous counties in central and southern Taiwan, weather officials said.

Taiwan's defence ministry said it had put 29,000 soldiers on standby for disaster relief efforts.

The typhoon has severely curtailed this year's annual Han Kuang war games, though they have not been cancelled, with scheduled live fire drills held on the Penghu islands in the Taiwan Strait on Wednesday.

Gaemi is expected to bring heavy to very intense rains over vast swathes of China from Thursday, the water resources ministry warned. The rains are expected to last until July 31, fuelled by the typhoon's abundant moisture, it added.

Gaemi and a southwest monsoon brought heavy rain on Wednesday to the Philippine capital region and northern provinces, bringing work and schools to a halt, with stock and foreign exchange trading suspended. The storm killed 12 people.

While typhoons can be very destructive, Taiwan relies on them to replenish reservoirs after traditionally drier winters, especially in its south.