TAIPEI, Aug 19 (Reuters) - A Taiwan town where 700 people were displaced after the island's worst typhoon in 50 years has declined mobile homes from political rival China, fearing the they might contain toxic chemicals, officials said on Wednesday.

Chiatung Township refused 100 quick-assembly homes after Taiwan's notoriously anti-China county of Pingtung said that based on news reports in China, they might contain formalin, a chemical that can be hazardous in high doses, deputy county magistrate Chung Chia-pin said.