TAIWAN: LOOKING TOWARD DECEMBER ELECTIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP04T00794R000200810002-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 18
• Document Creation Date: December 22, 2016
• Document Release Date: May 17, 2011
• Sequence Number: 2
• Publication Date: July 1, 1986
• Content Type: REPORT

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Directorate of
Intelligence
December Elections
Taiwan: Looking Toward
IPAS PRCDUCTICN MANAGER
(A-I)
ROOM 1G30
ecret
EA 86-10032
July 1986
264
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Directorate of
Intelligence
December Elections
Taiwan: Looking Toward
Office of East Asian Analysis. Comments and queries
are welcome and may be directed to the Chief,
Foreign Policy Branch, China Division, OEA, on
This paper was prepared by
Secret
EA 86-10032
July 1986
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Taiwan: Looking Toward
December Elections
respectively.
Key Judgments We believe Taiwan's leaders are devoting increasing attention to preparing
Information available for national elections now scheduled for December. The ruling Kuomin-
as of 11 July 1986 tang (KMT) has a lot riding on the outcome, even though the faction-
was used in this report.
ridden opposition stands no chance of toppling it from power. We believe,
for example, that President Chiang wants to enhance the legitimacy of a
collective leadership he has handpicked to succeed him, whether he should
die soon or decides to resign the presidency Key 25X1
leaders are, in our judgment, such mainlander conservatives as Shen
Chang-huan, Premier Yu Kuo-hua, and Chief of the General Staff Hao
Po-ts'un, who continue to oversee foreign, economic, and defense policy,
Disturbed by events in the Philippines and South Korea, Chiang and other
KMT leaders also are eager in our judgment to:
? Renew the party's popular mandate.
? Refurbish the KMT's reputation at home, which was badly tarnished last
year by political scandals and economic problems.
? Counter opposition (dangwai) efforts to challenge the continuing martial
law regulations that prevent opposition leaders from organizing a legal
political party.
? Strengthen the KMT's "democratic" image abroad, especially in the
United States, to defuse criticism of Taipei's human rights record.
We believe Chiang's desire to see the KMT at least match its showing in
the 1983 national elections (71 percent) has influenced some of his recent
personnel decisions as well as his handling of provocative opposition
activity. To help strengthen the KMT appeal among the Taiwanese
majority, for example, Chiang increased Taiwanese representation on the
prestigious KMT Central Standing Committee at the recent March party
plenum. He also added Li Huan, a party moderate and key mentor of many
Taiwanese officials in the KMT, and approved, new measures reportedly
aimed at increasing the party's support among the overwhelmingly Tai-
wanese urban lower classes-where the dangwai made substantial gains
during last December's provincial elections. We expect Chiang also to
replace the present KMT Secretary General with a more energetic
figure-possibly Sung Shih-hsuan, also a patron of many KMT Taiwanese
politicians-in time to manage the election campaign.
iii Secret
EA 86-10032
July 1986
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Secret
The most significant and controversial move Chiang has made thus far,
however, has been his decision to open an unprecedented formal dialogue
with opposition leaders-ostensibly to improve "domestic harmony." He
also has directed the KMT to allow dangwai leaders to open local offices,
which are technically illegal under martial law. We doubt that these moves
foreshadow more democratic reform measures. On the contrary, we believe
they are designed primarily to defuse political tensions, confuse and further
divide the opposition, and improve the KMT's image at home and abroad.
Although this tack appears to be working, it is not without risks. It already
has created dissension among KMT elders opposed to granting the
opposition any legitimacy, however illusory. If the opposition actually
appears to gain public support over the summer, Chiang will probably
come under strong pressure from party conservatives as well as the security
services to order a crackdown. Such a move could generate sympathy at
home for the dangwai and provide ammunition for US critics of Taiwan's
human rights record. We believe that concern over such criticism while
Washington is still considering the sale of FFG-7 frigates to Taiwan in part
accounts for Chiang's conciliatory approach. Finally, allowing the opposi-
tion to establish a network of offices could encourage squabbling opposition
politicians to close ranks and mount a more effective challenge to the KMT
at the polls than they have in the past.
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Taiwan: Looking Toward
of these changes occurred, however.
The Kuomintang (Nationalist Party or KMT) plenum
that met 29-31 March failed to produce the dramatic
changes many Taipei insiders had expected. In the
months leading up to the plenum, for example, local
pundits variously reported that Chiang Ching-kuo
would announce his resignation from the presidency;
that Chiang would replace the KMT Secretary Gen-
eral; or that he would announce his intention to fill the
long-vacant position of deputy party chairman. None
though endorsed by Chiang.
Nonetheless, Chiang did make some significant ad-
justments in the top leadership, and others may
follow. We expect the leadership will focus increasing-
ly on managing the national legislative elections this
December, and, indeed, strategy discussions are al-
ready under way. The most significant and controver-
sial move in this regard has been the decision to deal
directly for the first time with the opposition, or
"dangwai" (literally, "outside the party"), a policy
that is not fully supported within the KMT, even
Plenum Winners and Losers
We hesitate to read too much-for the long term-
into the plenum results. All power essentially flows
from Chiang, who promotes and dismisses his top
ministers at will. Thus, it is not unusual for powerful
men to fall from grace quickly, and for out-of-favor
politicians to move back into positions of influence.
That said, in our view the major gainers at the plenum
were Premier Yu Kuo-hua and Presidential Office
Secretary General Shen Chang-huan. Both were pro-
moted in party rank-Yu jumped from 13th to sixth
position on the prestigious Central Standing Commit-
tee and Shen moved from 11th to 10th. Taiwan
pundits had speculated for months that Yu and Shen
might be replaced because of the economy's' poor
performance and a series of scandals that have rocked
the government. The Central Standing Committee is
personally selected by Chiang, however, and both men
appear to have retained his confidence.
Minister of Education Li Huan also was a winner, in
our opinion. Although Li was not nominated as a
KMT deputy chairman-as had been rumored-he
was reelected to the CSC after an eight-year absence.'
The promotion to the CSC of two of his proteges- 25X1
Minister of Interior Wu Po-hsiung and Minister of
Justice Shih Ch'i-yang-also strengthened Li's posi-
tion in the party hierarchy. In our judgment, Li has
emerged from the plenum as the de facto leader of the
moderate wing of the party.
We consider Chief of the General Staff Hao Po-ts'un
as the big loser, although he remains one of the most
powerful men on the island. Hao's rank on the CSC
slipped three notches, and other personnel shifts by
the President in recent months have tended to curb his
influence. Some local observers believe Chiang also
intends to replace the current director of the Political
Warfare Department-a Hao associate-who is re-
sponsible for the political commissars who monitor the
loyalty of the military and security services.
President Chiang maintains a careful balance of
power among his subordinates, and we suspect that he
has increasingly come to see Hao as threatening that
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'Li was dropped from the CSC at the 1979 plenum, after he had
been stripped of his other party jobs in the aftermath of election
rioting in 1977-for which Li assumed "ministerial responsibility."
He returned to the central government as Minister of Education in
2 Chiang's moves to curb Hao's influence are reminiscent of the
1983 downfall of Wang Sheng, then Director of the General
Political Department and currently Taiwan's Ambassador to Para-
guay. Wang-whose influence, like Hao's, extended far beyond his
portfolio-was exiled after openly maneuvering to become Chiang's
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The Central Standing Committee
Chiang Ching-kuo rules in almost classic Chinese
fashion, essentially the old Imperial system with a
modern veneer. For example:
? Chiang picks, promotes, and dismisses key minis-
ters and advisers at will.
? Power is accrued by gaining Chiang 's confidence
and ear, not necessarily by building patronage
networks or expertise.
Li Teng-hui, 63 ... Vice Presi-
dent ... Chiang's constitutional
successor... second Taiwanese
to become vice president and
highest ranking in government
annaratus ...
Ran s
third in CSC, behind former
president and vice president.
Yu Kuo-hua, 72 ... Premier of
the Executive Yuan ... Chiang
family retainer ... conservative
economic planner whose power
derives from his relationship
with Chiang, Yu has little in-
fluence beyond economic and
financial ministries ... no
known political following in ei-
ther party or government cir-
cles ... likely to keep present
job until at least 1987. Cur-
rently ranked sixth on the
CSC. F__~
The 31 members of the Central Standing Committee
(CSC)-the most prestigious of all KMT organs-are
handpicked by Chiang in his capacity as KMT chair-
man. Chiang takes care that a cross section of
Taiwan's ruling elite is represented on the committee.
We believe that Chiang weighs several factors, such
as an individual's government job, family history,
and ethnicity in making appointments. For example,
Shen Chang-huan, 73 ... Sec-
retary General, Presidential Of-
fice ... former Foreign Minis-
ter and now responsible for
Taiwan's foreign policy ... ap-
peals to party traditionalists,
not known to favor Taiwaniza-
tion policies of the president ...
political base weak: ability to
continue to play prominent role
after Chiang's death uncertain.
Shen's party rank moved up
from 11th to 10th at the ple-
num.F___1
Lin Yang-k'ang. 59 ... Vice
Premier of the Executive Yuan
... most popular of senior Tai-
_]... probably will play
important, if largely symbolic,
role in succession government.
Ranked 13th on the CSC, Lin
is the third-highest ranked Tai-
wanese on the committee. F_
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dramatically over the past few years, and
Hao
angered the President by flaunting his influence and
openly meddling in last November's provincial elec-
tions. Rumors off and on for over a year have
predicted Hao's removal from the CGS job-which
he has held longer than any of his predecessors. These
rumors have, at least for now, been scotched with the
appointment of a new Defense Minister, and Hao's
extension as Chief of the General Staff until July
1987. Other local observers, however, believe that
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Minister of Interior Wu Po-hsiung sits on the com-
mittee because he is Taiwanese, represents a moder-
ate-reform wing of the party, and, as Interior Minis-
ter, is responsible for overseeing the elections this
December. At the same time, former President Yen
Chia-kan, who has not always been considered a
Chiang Ching-kuo supporter, sits on the committee
Hao Po-ts'un, 66 ... Chief of
the General Staff... closely
associated with Chiang family
since 1960s ... responsible for
overseeing nuclear R&D,
Taiwan's weapons'procure-
ment program, day-to-day op-
eration of armed forces ... po-
litical following in party
unknown. Party ranking is 18th
Li Huan, 69 ... Minister of
Education ... longtime confi-
dant of Chiang Ching-kuo ...
extensive patronage network in
KMT and security services ...
regarded as political moderate
... rumored to be leading can-
didate to replace Yu Kuo-hua
as premier ... likely to play
key role in succession govern-
ment. Currently ranked 19th on
Hao's influence has increased recently, especially
following the retirement of his chief rival, Sung
Chang-chih.
because of his loyalty to the late Chiang Kai-shek
and his "prestige factor" as former president. All
members of the committee, however, share a common
thread-their loyalty to the legacy of the late Chiang
Kai-shek and personal ties to Chiang Ching-kuo.
Wu Po-hsiung, 45 ... Minister
of Interior ... youngest Tai-
wanese appointed to CSC ...
protege of Li Huan and close to
Justice Minister Shih Chi-yang
... comes from wealthy Tai-
wanesefamily ... owes position
on CSC more to ability than
political connections ... will
oversee December legislative
elections. Wu is ranked 21st on
Chen Li-an, 48 ... Chairman,
National Science Council ...
son of former Vice President
Chen Cheng ... protege of
Chiang Yen-shih, former KMT
Secretary-General, and report-
edly rlncp In I, Huan
Impact on Succession
Curbing Hao's power is part of a larger effort by
Chiang to reduce the influence of the military and
security services in island politics and ultimately, in
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Two Years of Living Dangerously
The administration of Premier Yu Kuo-hua has been
a public relations failure since shortly after Yu was
sworn in on 25 May 1984. Within six months, several
coal mine disasters-resulting in a high loss of life-
the murder of Chinese-American writer Henry Liu by
agents of Taiwan's Military Intelligence Bureau, and
the collapse of the 10th Credit Cooperative Bank had
earned the Premier the sobriquet of "Typhoid Mary. "
The subsequent dismissal of two senior government
officials and the sentencing of several lower level
Finance Ministry functionaries for their role in cover-
ing up the 10th Credit scandal shook public confi-
dence in the government. By the opening of the 1985
session of the Legislative Yuan, calls were being
openly made for the Premier to step down. Opposition
politicians charged that there was a "crisis in confi-
dence" in the government-a charge some dangwai
candidates used to their advantage in the Taipei
Municipal Council elections last November. The
government and party have denied that such a crisis
exists, but many midlevel party cadre have privately
admitted that, unless the KMT improves its image
before the December elections, their vote margin over
the dangwai could shrink.
our view, in the succession issue. Last November,
Chiang appointed Sung Hsin-lien-a Hao rival with
no security experience-to head Taiwan's top intelli-
gence agency, the National Security Bureau
moreover,
the President ordered the
reduction of party activities in the armed forces-we
suspect to weaken Hao's ability to manipulate party
elements within the military. Chiang has made a point
of underscoring civilian control of the military lately
by having senior military officers, including former
Defense Minister Sung Chang-chih, publicly reiterate
that the military services will remain subordinate to
the government and constitution. During his Decem-
ber 1985 Constitution Day address to the National
Assembly, Chiang flatly stated that the military
would play no role in succession politics. Local observ-
Shen's strident advocacy of hardline foreign policy
positions has been criticized by younger party and
government bureaucrats-including Taiwan's unoffi-
cial representative to the United States, Frederick
Chien-who believe that a more flexible policy is
needed. For example, Shen's rigid position on the
nomenclature issue in the Asian Development Bank
(ADB)-which rejected any name change as a prereq-
uisite for Taiwan's continued membership in the
Bank-was a serious source of contention within both
the Foreign Ministry and the Cabinet, with many
arguing that it was better for Taiwan to remain in the
Bank as a full and participating member than to
withdraw in order to maintain a `principled stand."
Even Premier Yu expressed his exaspera-
tion with Shen's stand, commenting that, were it not
for Shen, Taiwan would have resolved the ADB issue
months earlier. Local pundits have recently com-
mented that Shen's influence with the President may
be waning, however.
ers are also characterizing Chiang's appointment of
the civilian Wang Tao-yuan to the Defense Ministry
as strengthening his commitment to removing the
military from politics.
The net effect of these changes and those announced
at the plenum, in our judgment, has been to restore
some of the balance between contending factions and
individuals, which had been upset by the departure
from the national scene of former Premier Sun Yun-
hsuan, and former KMT Secretary General Chiang
Yen-shih, and the increase in power of party tradi-
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Chiang Chin -kuo in
happier days
tionalists and General Hao.3 Party traditionalists, led
by Yu and Shen, for now will continue to dominate
economic and foreign policy, but reform-minded ele-
ments centered on Li Huan have increased their
influence in party affairs and, in our view, will act as
a moderating force. The addition of two more Tai-
wanese to the CSC, bringing their total to 14 of the 31
members, represents Chiang's-and the KMT's-
commitment to eventual power sharing, although
native islanders continue to be far less influential than
their mainlander colleagues.?F___1
We believe that these changes increase the likelihood
of a collective leadership if Chiang dies soon. We
know little about Chiang's thinking on the succession
issue, but his actions over the years lead us to
conclude that he does not want any one of his top
lieutenants to dominate a succession regime. Rather,
he favors and, in our view, has long sought to create a
collective leadership in which every player has a well-
defined role. We suspect that the President has
avoided designating an heir apparent-as many local
businessmen and politicians have urged him to do-
for several reasons:
? Such an individual could pose a threat to the
President's own power and authority.
? An anointed successor would become a natural
target for political rivals in the leadership, escalat-
ing political infighting.
? Chiang himself may genuinely believe that a colle-
gial leadership, representing all key constituencies,
offers the best prospect for long-term stability after
his death. Chiang probably expects that such a body
would be dependent on his legacy for legitimacy and
thus be more likely than a strong leader to continue
his policies and those of his father, particularly
regarding "no official contact, no compromise, and
no negotiations" (the san bu or three nos) with the
mainland.
Next Steps
On the basis of a variety of reports of the American
Institute in Taiwan (AIT) and stories circulating in
Taipei, we believe that Chiang may be planning
additional personnel changes, possibly before the De-
cember elections, including his own resignation from
the presidency. The President has long been rumored
to be contemplating personnel changes in the Execu-
tive Yuan (cabinet) and the military services, and
rumors circulating before the plenum that Chiang
would resign
again.
' The term "mainlanders" refers to those who came to Taiwan with
the Nationalist government in 1949 and who have been in power
ever since. Taiwanese usually means Chinese who emigrated to
Taiwan from Fujian Province during the 17th and 18th centuries
and from Guangdong Province. A third group, the aborigines,
refers to Malay-Polynesian natives who originally settled the island
and who now make up about 3 percent of Taiwan's population.
convinced that he is preparing the public for his
resignation from the presidency. Other observers of
the local scene have speculated, however, that Chiang
may postpone any major changes until after the next
party congress, possibly in early 1987.5
S Party rules stipulate that a full party congress must be convened
at least once every four years. The last congress was convened in
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If Chiang does resign from the presidency, we would
expect him to remain as KMT party chairman, and
thus retain final say on key issues. Surrendering the
presidency would relieve Chiang of ceremonial re-
sponsibilities-allowing him to conserve his
strength
Stepping down also creates a vacancy that he
can use to burnish the regime's image by promoting
Vice President Li Teng-hui, a Taiwanese. In any case,
we expect operation of the executive to reside with the
premier and not the president.
Regardless of whether or not he resigns from the
presidency,
Chiang plans some additional cabinet
changes, although the timing remains unclear. We
expect that, in addition to changes already made in
the Defense portfolio, Chiang will:
? Appoint Ting Mao-shih, a protege of the archtradi-
tionalist Shen Chang-huan, to serve as Minister of
Foreign Affairs.
Secret
ner
? Promote Yu Kuo-hua proteges to the finance and
economic portfolios, and possibly the Council for
Economic Planning and Development, consolidating
Yu's position as Taiwan's foremost economic plan-
nomic policies.
If these changes are made, we believe that they will
do little more than reinforce the present balance of
power among Chiang's top advisers. Party traditional-
ists will remain in control of Taiwan's foreign and
economic policies, moderate technocrats such as Li
Huan will retain control of most of the government
bureaucracy, and Taiwanese will remain on the
fringes of true political power. We would not expect
any major departures from present foreign and eco-
On the party side, the appointment of the new KMT
Secretary General may be in the offing. The incum-
bent, 76-year-old Ma Hsu-Ii, has stated privately he
wants to retire. Widely regarded as a caretaker
appointee, Ma replaced Chiang Yen-shih in February
1985.6 The Taiwan rumor mill, which has an uneven
record, sees two possible replacements: Sung Shih-
hsuan, director of the party's Organizational Affairs
Department and a Chiang family member; and Min-
ister of Education Li Huan. Like Li, Sung is a
political moderate associated with party reform ef-
forts and popular with both younger Taiwanese and
mainlanders, but he and Li are rivals. Given Chiang's
style, Sung may have the inside track because his
appointment would tend to reduce Li's influence
among middle-level party cadres. Sung's current
post-where he has helped run the party on a day-to-
day basis-also makes him better suited to oversee
planned party reforms than Li, who has not held a
party job since the late 1970s.
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Economic Forecast-Partly Cloudy
Taiwan's sharp decline in economic growth from
10.5 percent in 1984 to 4.6 percent in 1985 probably
foreshadows several more years of slower economic
expansion. Although strong by international stan-
dards, the 5- to 6 -percent growth rate forecast by the
Council for Economic Planning and Development is
below Taiwan's historically high standard. Lower
growth rates probably will reduce already low con-
sumer confidence and dampen domestic investment
rates. The export sector, which accounts for almost
half of Taiwan's GNP over the past five years, faces
growing protectionism from developed countries, es-
pecially the United States, and stiffer competition
from developing ones, most notably mainland China.
Taiwan is aware of these problems, but, if the recent
Generalized System of Preferences negotiations with
the United States are any barometer of Taipei's
attitude toward reform, we do not see any major
economic reform initiatives in the offing.
Indeed, we suspect that the recent upturn in the
economy is likely to encourage Premier Yu and
Taiwan's other conservative economic planners to
move even slower in implementing needed economic
reforms. Without government incentives, we believe
that many of Taiwan's small, family-run firms,
which dominate the economy, will temporize rather
than risk the huge capital outlay necessary to mod-
ernize their businesses. This is particularly true in
light of the recent surge of export orders for textiles
and footwear from the United States and Japan.
? Open up the investment sector to more foreign
firms. This would require some major concessions
from the security services, who view foreign invest-
ment as conducive to "subversion."
? Reduce the rate of capital flight-15 percent of
Taiwan's GNP in 1984-to the United States. The
government could restrict some capital flight by
increasing incentives for domestic investors.
? Diversify Taiwan's export market. Almost 50 per-
cent of Taiwan's exports currently go to the United
States.
? Demonstrate its own commitment to industrial
modernization by revamping and streamlining
state-owned and -operated firms, many of which are
poorly run and operate with huge financial losses.
? Develop a proper capital market that could convert
high domestic savings into investment.
The government is aware that changes must be made
in Taiwan's financial structure. Indeed, conscious of
the need for greater foreign investment, the govern-
ment has loosened some restrictions on foreign capi-
tal holdings on the island and has offered some
incentives for foreign firms to enter into joint ven-
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courage the development of more high-technology
To encourage the development of more high-
technology industries, the government will have to:
? Offer more financial incentives, such as low-interest
loans, to small businessmen to retool their
factories.
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Intent on preserving the margin of victory in the 1983
elections (71 percent), Chiang may want to replace
Ma with Sung or Li to help restore party morale and
to put a proven campaigner in charge of the Decem-
ber elections. The party secretary general plays a key
role both in the day-to-day operation of the party and
in vetting party candidates for the election
The party
strategy approved at the plenum also will require a
stronger, more capable, and imaginative administra-
tor than Ma if it is to succeed.
the plan is to devise an
appeal that will broaden the party's base among the
urban and provincial lower classes-in part by field-
ing candidates more in tune with local needs.
Despite continuing success at the polls-in the most
recent provincial elections last December and Febru-
ary, the party won 72 percent of the vote-top party
officials in our view have reason for concern, a
judgment they themselves share
For example, during a late December 1985
review of the provincial elections, senior KMT offi-
cials conceded that:
? KMT losses to the opposition in the urban areas
were a direct result of growing public dissatisfaction
with existing economic policies.
? The party's failure to be more flexible regarding
popular demands for political reform-especially in
light of the 10th Credit Cooperative scandal and the
Henry Liu murder-was also responsible for KMT
losses at the polls.
? They had underestimated the dangwai candidates'
campaign skills.
The December elections are important to the KMT,
even though its continued dominance is not at stake.
Taiwan's international reputation suffered over the
last two years with the scandal over the Henry Liu
murder and domestic difficulties that called into
question the KMT's claim to be a "democratic" party.
Moreover, as Beijing increasingly pressured many
Third World nations to withdraw diplomatic recogni-
tion of Taiwan, Taipei's sense of isolation increased.
Taipei also appeared increasingly intransigent and
unreasonable toward Beijing's more flexible overtures
on reunification. Thus, KMT leaders see the elections
as a chance to:
? Demonstrate that, unlike their mainland counter-
parts, Taiwan allows its citizens to elect representa-
tives by direct election.
? Buttress their claim to represent-through popular
elections-all of China.
? Strengthen the KMT's claim to be a legitimate
government with popular support from the majority
of the "nation."
Alternatively, a poor showing at the polls by KMT
candidates strengthens Beijing's argument that the
KMT is nothing more than a "clique" whose only
interest lies in perpetuating its control over the
"Province of Taiwan."
Dealing With the Dangwai
Chiang's most surprising initiative in preparing for
the elections has been his willingness to engage the
dangwai in a dialogue. Since retreating to Taiwan in
1949, the KMT has governed under martial law
restrictions and has not permitted a formal, organized
opposition, although it has tolerated non-KMT politi-
cal figures. According to AIT and press reports,
Chiang has personally directed KMT functionaries to
adopt a much more conciliatory approach to the
dangwai.
The KMT is offering two carrots to the opposition. By
agreeing to open a dialogue with dangwai leaders, the
party is lending a sense of legitimacy to the opposition
and a forum in which to publicize its views. The talks
are receiving considerable press coverage. Further, by
allowing the opposition to formally establish branch
offices of the Dangwai Public Policy Research Associ-
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This year Taiwan's voters will elect supplemental
members to two of Taiwan's legislative bodies-the
National Assembly and the Legislative Yuan-and
their oversight body, the Control Yuan. The original
delegates to the National Assembly and Legislative
Yuan were elected on the mainland in 1947, and after
the Nationalist retreat to Taiwan in 1949 full elec-
tions were no longer possible. Supplemental elections
for both national-level and provincial-level legislative
and municipal bodies are held every three years.
Elections for the Control Yuan are held every six
years. The National Assembly first authorized sup-
plemental elections in 1966, when it passed the
Temporary Provisions Under Effect During the Com-
munist Rebellion, which provided for the election of
delegates to meet demographic changes on Taiwan.
The first supplemental elections took place in Decem-
ber 1969, when 15 and 11 supplemental legislators
were elected to the National Assembly and the
Legislative Yuan, respectively. The Control Yuan
elected two supplemental legislators in 1969. In
addition to legislators elected to represent Taiwan in
the Legislative Yuan, supplemental seats are also
reserved for overseas Chinese, aborigines, women,
and professional groups. Since the first supplemental
elections, the Legislative Yuan has become increas-
ingly involved in the policymaking process and is no
longer regarded as only a rubberstamp.
The KMT and two other parties controlled by it-the
Democratic Socialist Party and the Young China
Party-are the only legal political parties on Taiwan.
The opposition is a loosely organized collection of
individuals who legally run as "independent" candi-
dates.
According to AIT reporting, 660 KMT members
expressed interest in running in the December elec-
tions by registering their candidacy with the party in
May. The party began vetting candidates in June, and
the list of proposed candidates will be submitted to
the KMT Central Committee for approval in Septem-
ber. KMT members who do not receive the party's
nomination but decide to run anyway risk expulsion
from the party-unless they win the election. The
dangwai has no formal nominating process, but sever-
al opposition members have already announced their
intentions to run for office, and the dangwai probably
will establish "campaign assistance committees" lat-
er this year to serve as support groups for dangwai
candidates.
The number of seats up for election this year is still
unclear. Press reports have said that the govern-
ment-because of demographic changes-may in-
crease the number of Legislative Yuan seats by two,
and the National Assembly may add six supplemen-
tal seats to its rolls, bringing the total to 73 and 82
supplemental legislators, respectively.
Under the Election and Recall Law, candidates may
formally campaign only during the two-week period
before election day-a restriction that clearly favors
the better organized KMT machine. Both KMT and
opposition candidates, however, have in the past
found ways of getting around this restriction by
holding "birthday parties" and "tea receptions" that
are thinly disguised election rallies. The government
does not permit candidates to campaign either on
television or in the newspapers, but some opposition 25X1
candidates managed to get their message across last
year by placing campaign ads at the beginning of
rental videotapes that are widely available in Taipei.
Open vote buying and bribery have been problems in
:he past, and the Central Election Commission prob- 25X1
ably will restrict the amount of funds candidates are
allowed to spend on their campaigns to prevent
abuses by both KMT and opposition candidates. In
the past, however, these restrictions have not prevent-
ed candidates on both sides from passing out "gifts"
such as cigarette lighters, tea sets, and cash as
inducements to voters.
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ation (DPPRA)-a quasi-political party technically
illegal under martial law restrictions-the KMT is
giving the opposition the opportunity to strengthen its
organizational capabilities before the elections
Along with the carrots, however, there is a familiar
stick. Since the attempted demonstrations on the
anniversary of martial law in late May, the party has
made it clear that it will not tolerate any attempts to
disrupt "domestic political harmony." Dangwai dem-
onstrators still risk arrest and jail for unlawful politi-
cal agitation. Moreover, the government's decision to
go ahead with the sentencing of three dangwai mem-
bers in early June clearly signaled the opposition not
to mistake the KMT's flexibility for weakness in the
face of dissent and demonstrated that the party wants
to keep the current political dialogue within carefully
prescribed bounds. F___]
We see three possible motives for this approach.
Taiwan's leaders have followed events in the Philip-
pines and South Korea closely, according to AIT
and we believe they see their gestures as a
means of defusing tensions with the dangwai that
have grown over the past year. We believe that the
KMT also hopes to drive a wedge between moderate
and more radical dangwai leaders. Permission to
organize and open offices may produce more competi-
tion between individual dangwai figures than between
the KMT and the dangwai-a possibility we believe
the KMT also sees. Finally, KMT leaders view the
gestures as burnishing their image at home and
abroad.
Netting It Out
In our view, the more conciliatory approach to the
dangwai represents a tactical shift rather than a
In our judgment, the KMT's gestures will probably
have the effect on the dangwai for which party leaders
hope. Moderate and more radical opposition figures
are already arguing over how best to respond to KMT
The Dangwai Point of View
The dangwai movement traces its roots back to the
1950s, but assumed its present form during the early
1970s when the government allowed dangwai candi-
dates to run for national legislative office for the first
time. Opposed to continued KMT and mainlander
dominance, dangwai leaders have used their restrict-
ed political freedoms to push for:
? An end to martial law.
? The right to forma political party.
? Freedom of assembly and the right to demonstrate.
? Direct elections for key legislative and executive
offices on Taiwan.
At present, there are three recognizable dangwai
factions. The Kaohsiung Incident faction, led by the
relatives and lawyers of leading Kaohsiung Incident
prisoners-jailed for their participation in a riot on
Human Rights Day in 1979-have been the dominant
group within the dangwai since 1983. Militant and
inclined toward confrontational tactics, they are also
the most outspoken in favoring self-determination for
Taiwan. Their voter appeal-based on a sympathy
vote for their jailed relatives-has begun to decline,
as the memory of the Kaohsiung Incident begins to
fade.
The fastest growing group within the dangwai is the
New Generation faction. A strong proponent of mov-
ing step by step toward forming a formal political
party, it has its origins in opposition magazines and
some Taiwan universities. The New Generation fac-
tion has a strong appeal among younger voters and
can even count some younger mainland politicians
among its adherents.
The most moderate of the dangwai factions is led by
veteran politician K'ang Ning-hsiang-long an advo-
cate of working within the system and even cooperat-
ing with the KMT, particularly with younger KMT
mavericks in the Legislative Yuan. K ang and his
followers generally appeal to the mainstream voter in
Taiwan who is lookingfor an alternative to the KMT.
Defeated in his reelection bid in 1983, K'ang plans to
run again for the Legislative Yuan this December.
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overtures. For example, moderate dangwai leader
K'ang Ning-hsiang has been accused by the more
radical opposition of "selling out" to the KMT be-
cause of his willingness to work with the party to
resolve KMT-dangwai differences. At the same time,
opposition leaders are competing-especially in Kao-
hsiung and Taipei-to establish branch offices and
win the same small vote pool of dangwai supporters.
President Chiang's directives caused friction in
the-top leadership and even some opposition from
younger party members such as Kuan Chung, Chair-
man of the KMT Provincial Headquarters. Growing
unhappiness with what some may view as a KMT
"cave-in" to opposition demands, especially if the
KMT allows the opposition to retain "dangwai" in the
DPPRA office titles or backs down from insisting that
the dangwai register its offices with the government,
could intensify factional squabbling in the top leader-
ship, hampering efforts to vet KMT candidates and
risking an unusually high number of unsanctioned
the opposition
Kai-shek, are opposed to any form of dialogue with
The party's overtures entail some risks, however.
Several party oldtimers, possibly including Shen
Chang-huan, loyal to the memory of the late Chiang
candidates who could split the KMT vote.
opportunity arises
judgment, prevail upon Chiang to crack down if an
services view any loosening of existing restrictions on
dangwai activities with some suspicion and will, in our
recriminations are likely to follow in the party
There is a cost to the KMT if it decides to abandon
the conciliatory approach, however. Depending on the
circumstances, a retreat could hurt the party's credi-
bility with the majority of the population. There is
also a risk that elements of the opposition could be
further radicalized, and a crackdown would further
tarnish Taiwan's human rights record. Moreover,
Chiang (left and constitutional successor
Li Teng-hu
Eye on Washington
In the present atmosphere, we expect the dangwai to
continue to press for greater political rights, and the
demonstrations in June suggest to us that the chances
of confrontation as well as dialogue have increased.
Although additional KMT and government personnel
changes are likely, we do not expect any major 25X1
changes in economic or foreign policy between now
and December. The election and the internal situation
are likely to have the leadership's full attention.F--]
Whatever happens, the KMT leadership will have an
eye on Washington and will be mindful of possible US 25X1
reactions. Sensitivities to US perceptions of its human
rights record may serve to moderate how Taipei reacts
to opposition activities, including new demonstrations. 25X1
In particular, Taiwan will in our judgment try to
avoid giving its US critics any ammunition at a time
when it is ho oning for approval of the FFG-7 frigate
program.
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Secret
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