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Outgoing Taiwan Leader to Quit as Head of Party

Government: Lee's surprise decision comes as protesters blame him for Nationalists' humiliating loss at the polls.


TAIPEI, Taiwan — The tectonic political shift resulting from Taiwan's presidential election continued to rumble across this island Sunday as outgoing President Lee Teng-hui announced that he will resign as chairman of the long-ruling Nationalist Party.

The surprise decision capped an extraordinary day of rowdy protests by Nationalist supporters who blamed Lee for the party's humiliating defeat in Saturday's polls. The Nationalist presidential candidate, Vice President Lien Chan, finished a dismal third behind winner Chen Shui-bian of the opposition Democratic Progressive Party and independent candidate James Soong.

Thousands of angry demonstrators converged on Lee's official residence and on Nationalist Party headquarters to demand a reckoning for what they called Lee's deception and betrayal of the dynasty that has ruled Taiwan for 51 years.

"Lee Teng-hui, step down! Down with Lee!" the protesters shouted, hurling eggs, rocks and abuse before riot police with shields and water cannons were called out to calm the situation.

For the Record
Los Angeles Times Wednesday March 22, 2000 Home Edition Part A Page 3 Metro Desk 1 inches; 23 words Type of Material: Correction
Taiwan government--A report in Monday's Times misstated the name of the Taiwanese governmental body that may face elections soon. It is the National Assembly.

Several demonstrators were hurt in the melee, as were some party officials who were attacked by the crowd as they arrived for an emergency meeting to decide what to do in the wake of the stunning loss.

Taiwan's stock market reacted to the turmoil by opening sharply lower at the start of trading today. Taiwan's Weighted Price Index was off 2.8% within an hour after trading opened but inched back up slightly by midday.

On Sunday night, Finance Minister Paul Chiu had announced that he will permit stocks to drop by no more than 3.5% each trading day for the next two weeks, or half the normal limit for a one-day drop.

The question on everyone's lips here is whether the Nationalists--also known as the Kuomintang, or KMT--can survive the deep damage and divisions in their ranks.

Besides Lee--who said that in September, a year early, he will step down as party chairman--another high-profile KMT politician, Taipei Mayor Ma Ying-jeou, abruptly resigned from the party's Central Standing Committee in a show of dissatisfaction with the current leadership.

Without reform, Ma said, "the party will wither."

Moreover, many KMT supporters appear poised to switch allegiance to Soong, a former KMT stalwart whose independent candidacy came close to victory Saturday with the help of other disaffected Nationalist voters.

To cheering crowds, Soong announced Sunday that he intends to form a new party, which could pose a formidable challenge not only to the KMT but also to Chen's new government and to the strength of this island's young democracy.

"We will forge the views of the majority Taiwanese and turn them into the truly stabilizing power of Taiwan," Soong said.

Chen spent his first day as president-elect paying tribute to one of his late mentors and beginning the transition to assume Taiwan's highest office May 20. He met Sunday with defense and security officials, whose support will be crucial for a smooth transfer of government from the hands of the KMT, which relied on Taiwan's military for decades to stay in power.

"He wants to ensure that the security apparatus and the police network are neutral in all this," a spokesman for Chen said.

But even Chen's eyes were on the drama unfolding around Lee--whom Chen will meet with today--and the incumbent president's fractured party.

For now, the KMT retains control of Taiwan's legislative assembly, the Yuan. Yet that could change sooner than expected if Taiwan's top court decides to void a measure that allowed lawmakers to extend their terms past the just-completed election.

If the extension is declared unconstitutional, elections for the Yuan would have to take place by Chen's inauguration in May, giving the KMT's opponents a chance to capitalize on the ruling party's disarray. The Nationalists could even find themselves completely in the minority for the first time in Taiwan's history, said Liu I-chou, a political scientist at National Chengchi University here.

"It's a very good opportunity for James Soong's camp to run for national assembly positions," Liu said. And Chen's Democratic Progressive Party "can probably take a lot of them."

KMT officials acknowledge that they face a daunting task of reform if they hope to recover ground.

Throughout the campaign, voters pronounced themselves sick of the rampant corruption that afflicts politics in Taiwan. As one of the world's richest political parties, the Nationalists own a huge business empire and a war chest worth billions of dollars.

Critics also point to an ossified party command structure that prevents real change and alienates the rank and file.

After their emergency session, KMT officials announced that a reform committee will be set up to examine the party's workings--for example, how the next chairman will be selected--and its finances. The KMT wants to mount a preemptive strike against attempts by outsiders, such as Chen, to take action against its assets.

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