Investors cheer Taiwan poll win
TAIPEI, Taiwan -- Investors in Taiwan are cheering Saturday's landslide victory by the island's pro-independence party in parliamentary elections.
The Taipei weighted index is up more than four percent at 4 percent to 4619 in Monday trading.
Analysts say they expect the poll win to boost the ability of President Chen Shui-bian, who heads the Democratic Progressive Party, to push through major reforms to pull the beleaguered economy out of recession.
The DPP grabbed 87 seats in the 225-member legislature, up from 66 seats prior to the poll.
Taiwan's nationalist or Kuomintang (KMT) party lost its dominance of parliament for the first time, gaining only 68 seats compared to their previous total of 110.
But while Taiwanese investors have cheered the poll win, an uneasy China has played it down after the pro-reunification KMT party lost its majority.
Analysts had said that the KMT defeat is sure to alarm Beijing, which will see it emboldening the DPP to move Taiwan further towards independence and a higher international profile for the island.
Taiwan split from mainland China in 1949 after the communist takeover, with the nationalist KMT fleeing to Taiwan. China has since regarded Taiwan as a renegade province, with Beijing threatening to attack if the island tries to break away or drag its feet on unification talks.
Chen was elected on pro-independence but his hands have largely been tied by a hostile KMT ever since he took office last year.
But in its first reaction to the win, Beijing said in the official China Daily newspaper that while ties with China may be clouded by the DPP win, it does not expect relations with Taiwan to "drastically worsen" over the long term.
China's official media on Monday quoted mainland experts on Taiwan as saying fallout from the results would be limited.
"The results may temporarily cloud the relations between Taiwan and the Chinese mainland but no dramatic change in the basic pattern of cross-Straits ties is expected," it quoted Li Jiaquan from the Institute of Taiwan Studies at the Chinese Academy of Social Sciences as saying.
"No matter what happens, the DPP will go nowhere if it sticks to a pro-independence stance."
While Beijing acknowledged that some Taiwanese may be emboldened to call for statehood on the island, it said it would not relax its conditions for reunifcation talks.
Chen's party did not win an outright majority and is expected to form a coalition with other parties aimed at breaking the legislative deadlock that has paralyzed his administration.
With no one party in control of absolute control of parliament, commentators are calling on political leaders to end their feuding in order to bring an end to months of political deadlock that has blighted President Chen's first 19 months in office.
As a result issues such as the island's worst recession in three decades, soaring unemployment and tense relations with the mainland have gone largely unaddressed.
A period of intense political horse-trading is expected in the coming days, with Chen likely to seek reliable allies to build a recession-busting coalition.
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