GWEN IFILL: The election was historic; the reaction to it, violent, protesters venting their anger at Taiwan's long-entrenched Nationalist Party. The protests came just one day after the party was ousted in a decisive pro-independence vote. Saturday's election was a devastating loss for the Nationalists, and sent Taiwan's stock market into a tailspin. The party, also known as the KMT, or Kuomintang, has controlled Taiwan since the Japanese relinquished the island after World War II. The newly elected president of the Taiwan, which is home to 22 million people, is Chen Shui- Bian. Chen, a member of the Democratic Progressive Party, or DPP, has been an outspoken advocate of establishing Taiwan's independence from Mainland China.
SPOKESPERSON: The people of Taiwan have spoken!
GWEN IFILL: Thousands of supporters cheered Chen's victory after he defeated two other candidates, both with ties to the Nationalist Party. But he captured only 39 percent of the vote in what had become a bitter three-way race. Supporters said his election sent a message to Mainland China.
SPOKESMAN: (speaking through interpreter) For more than 50 years, we Taiwanese have been under Nationalist Party rule. Now it's our turn. Isn't that great? Chen has won!
GWEN IFILL: But the Chinese government has been adamantly opposed to Taiwan's pro-independence movement. Just last week, Chinese Prime Minister Zhu Rongji warned Taiwanese voters that if Chen were elected, China might be forced to "spill blood" over the question of independence.
PREMIER ZHU RONGJI, People's Republic of China: (speaking through interpreter) The people of Taiwan are standing at a very critical juncture. We advise the people in Taiwan not to act just on impulse. This juncture will decide their future course. Otherwise, I'm afraid you won't have another opportunity to regret.
GWEN IFILL: But both sides toned down such rhetoric after this weekend's elections. President-elect Chen suggested he is now in search of middle ground, and offered to visit Mainland China. He also moved to mend fences with Taiwan's outgoing president.
CHEN SHUI-BIAN, President-elect, Taiwan: I will exert all efforts to learn from the success and experience of Lee Teng-Hui to lead Taiwan and the entire Taiwanese people.
GWEN IFILL: On state-run television the Chinese government made clear it is still staunchly opposed to independence for Taiwan but also issued a more moderate statement.
SPOKESPERSON: The central government's Taiwan affairs office issued a statement on Saturday night, saying that the result of the recent election cannot change the fact that there is only one China in the world, and Taiwan is an inseparable part. China will watch closely how the new Taiwan leader will fare in the cross-strait relations.
GWEN IFILL: And today, Chinese President Jiang Zemin said Chen is welcome to visit the mainland, but only with the understanding that Taiwan remain linked with China.
President Clinton praised the election process, saying in a statement: "I believe the election provides a fresh opportunity for both sides to reach out and resolve their differences peacefully through dialogue." Street protests ended in Taiwan yesterday, after outgoing President Lee announced he would resign as head of the Nationalist Party. Chen, a former mayor of Taiwan's capital Taipei, is a 49-year-old native of the island. He takes office May 20th.
GWEN IFILL: For more on the elections in Taiwan, we are joined by Ying-Mao Kau, a native of Taiwan, and professor of political science at Brown University. He has written extensively about Taiwan. Wu Xinbo, professor at Fudan University in mainland China, and currently a visiting fellow at the Brookings Institution. And Yu Mao Chun, a native of mainland China, and now associate professor at the U.S. Naval Academy. The views he expresses are his own, and do not reflect U.S. Government policy. Mr. Yu, what was the reaction in Taiwan after the election this weekend? What really happened?
YU MAOCHUN, U.S. Naval Academy: I think that people are really excited and it shows once again the strength of democracy, and the people were very rational despite what you see on TV. But no one is challenging the legitimacy and fairness of the election. That shows the maturity of the democracy in Taiwan.
GWEN IFILL: Mr. Wu, who is Chen?
WU XINBO: Fudan University: Well, I think with regard to the election in Taiwan, and people in the Mainland have no problem with the election itself -- but I think what we care about is that whether or not DPP will try to turn their independence party line into policy, and that will pose a major challenge to cross strait relations.
GWEN IFILL: Is the Chinese government still suspicious of him?
WU XINBO: Of course, we know DPP is a party who has long been advocating for Taiwan's independence, although Chen has made some conciliatory gestures. But we need to wait to see whether this is a technical adjustment or is it really different. It's too early to tell at this moment.
GWEN IFILL: Mr. Kau, this is a big surprise by all accounts. What were the issues in this election? What was it that allowed him to win?
YING-MAO KAU: Brown University: I think fundamental issue domestically is the question of corruption, which the KMT is carrying tremendous baggage but the KMT, the Kuomintang, the ruling party, is just too rich and in many ways the operation depending on money. Now, the other part is really Taiwan's long-term security in the future. Where will Taiwan go? And of course, during the campaign -- you know -- under Chinese pressure, all the candidates tried to tone down their ambition for Taiwan. But basically for Chen Shui Bian, his vision is Taiwan is going to move on as an independent sovereign state. As far as its relations with China is concerned, probably the current status quo should be maintained and, in that sense, giving Taiwan people sort of hope for the long-term future.
GWEN IFILL: Did all this hype, saber rattling last week, the threats of war, did that backfire?
YING-MAO KAU: Well, I think it's backfired, some analysts will argue, probably rough about 5 percent of the voters seemed to turn to Chen Shui-Bian because they were infuriated by the Chinese. I think this is repetition of 1996 election. Tung-Hwe collected 54 percent. Of course, I think the middle class people on Taiwan also get a little bit scared too. So the estimate is probably 2 percent or so get scared and left -- you know -- DPP.
GWEN IFILL: Mr. Yu?
YU MAOCHUN: Don't forget, Chen Shui-Bian won by only 2.5 percentage points. I was in Taipei when Zhu Rongji's speech was broadcast live. I saw people immediately announce they're switching vote for Chen Shui-Bian. Once again....
GWEN IFILL: You saw the backlash.
YU MAOCHUN: Absolutely. I can I think this testifies to the Chinese political wisdom that no rumor is true until it's officially denied by government of China. And nobody becomes popular until you are officially denounced by China. I think Chen Shui-Bian was denounced by China, his popularity just skyrocketed.
GWEN IFILL: Mr. Wu?
WU XINBO: I have a different interpretation. I think the outcome of the election was not a reaction from the mainland. I think when you say saber rattling, let's see what happened in 1996. At that time we did have the large scale mutiny... but this time we didn't do anything -- only some rhetoric or response. I think in the last state....
GWEN IFILL: You don't think the rhetoric had resulted in people voting against the Nationalist candidate?
WU XINBO: I don't think so. I think actually the comment in Taiwan is that a famous scholar is a Nobel Prize winner - Professor Lee -- stood up saying he would support Chen Shui-Bian.
GWEN IFILL: You think that endorsement had more to do with it?
WU XINBO: He changed the attitudes of a lot of people because Professor Lee is highly respected in Taiwan. People think is he always correct; they follow him.
GWEN IFILL: We saw today that both sides are trying to offer each other these tentative olive branches. What this vote a vote for independence in your opinions or what are the other issues which were really driving it, Mr. Yu?
YU MAOCHUN: I think it was the issue of independence was overplayed. I mean one thing we have to understand, Taiwan, if you ask most politicians in Taiwan, they say Taiwan has already been independent republic since 1949. So the issue is how are you going to name it? So a lot of things is about semantics. From mainland China, it must be called the Province of Taiwan. For the KMT people, it must be the Republic of China. But how are you going to define that? That's a different issue. And Chen Shui-Bian said he wanted it to be called the Republic of China. It's very tricky. But no one has come out clear to face reality that Taiwan does have a different political system of its own, has its own military defense and security and foreign government, foreign ministry. So that's the reality. How are you going to name that? That's the issue.
GWEN IFILL: Well, and where does Mr. Chen go? He won by such a narrow margin, Mr. Kau, that I wonder if he doesn't have big challenges ahead of him?
YING-MAO KAU: As we know the cross strait relations have been, you know, existing over the past 50 years. And there is no easy answer. My feeling is Chen Shui-Bian -- in the past Chen Shui-Bian's party emphasized strongly for Taiwan independence, but this has been toned down. And Chen Shui-Bian himself has toned down the rhetoric and simply emphasized that he is waiting to negotiate with Beijing and, you know, his hope is some sort of peaceful co-existence, co-prosperity, can be arranged. And so nobody, as Professor Yu mentioned, nobody really emphasized so much in terms of the ultimate outcome. The emphasis is the process in how this peace and prosperity can be maintained. I think it's a good sign.
GWEN IFILL: And is this process a process so we can get to a place where we can happily be at the status quo or is it a process toward ultimate change, in your opinion, Mr. Wu?
WU XINBO: Well, I think it is both. At this moment it is important for the DPP and Chen Shui-Bian to maintain the status quo. But at the same time I think both sides of the strait should reach out to each other to work out toward the ultimate unification of China. So, that will take a long-time process. But both sides we started with a common starting point - that is, Taiwan is part of China. There is only one China. This is kind of a condition laid down by the Chinese president, Xiang Zemin.
GWEN IFILL: Was that an acceptable starting point for the Taiwanese?
WU XINBO: Well, you know, the Chinese people believe that Taiwan has been part of China for a time. And that it was separated from the mainland half a century ago because of China's civil war. So that's why we need to sit down to talk with Taiwan about how to get China unified -- so if Taiwan does not view itself as a part of China, then there's simply no common ground for any peaceful dialogue and negotiation across the Taiwan strait.
GWEN IFILL: Mr. Yu?
YU MAOCHUN: I think the issue, of course, of unification with the motherland is always very important but we have to face the political reality that most people, 70 to 80 percent of the people do not want outright unification or outright independence in Taiwan because they realize the vast gap between the two systems in Taiwan and in China. And Taiwan is a democracy with the freedom of expression, with the vibrant economy, a lot of things. Mainland China is one-party rule and without the freedom and democracy. So how do you narrow the gap? That's the key issue. I think unless this gap is narrowed, I don't see any rosy future for immediate unification.
GWEN IFILL: How does the United States begin to negotiate this? Right now the United States is subscribing to the One-China policy but it is sympathetic and has a history of sympathy with Taiwan. What does the United States begin to do?
YING-MAO KAU: I think there is a gut understanding among the three parties involved. Even though everybody makes hitting one-China principle. But the three parties have different definitions of one China. And therefore, the United States pays lip service to the question of one-China policy but in fact is defined very differently. You know, the United States through the so-called Taiwan Relations Act maintained the option of failing arms and supporting Taiwan security. That the United States' one-China policy and it has been maintained. And Taiwan's argument is that if you really want to talk about one-China policy in abstract principle, fine, it was developed in Singapore in 1992. Everybody paid lip service to one-China policy, but subject to different interpretations. And probably this will be a sort of creative ambiguity to get the thing going,
GWEN IFILL: Creative ambiguity -- I love -- that's a very State Department Term. Mr. Wu?
WU XINBO: But I think also there is something clear in U.S. policy which the United States recognized that the People's Republic of China as the sole, legitimate representative of China. And the United States does not support one China, one Taiwan or Taiwan's independence. So this is very clear - it is an important line of the U.S. policy on the Taiwan issue.
GWEN IFILL: On the Taiwan issue, what is the next important issue to have to wait to see?
YU MAOCHUN: I just wanted to add to what Professor Kau said about creative ambiguity or strategic ambiguity, it's working now, I mean, so far, no major crisis so far. It's like a Ford Pinto; it runs. But it has the element of it's obsolete and it's dangerous.
GWEN IFILL: It could blow up at any time.
YU MAOCHUN: That's right. It's obsolete because the result strategic ambiguity was the result of the Cold War when both China and the United States faced the Communist Soviet Union. Now the Soviet Union's is gone and the Cold War is over. That needs to be adjusted one way or another. It's dangerous because ambiguity means I'm not going to tell you what I'm thinking which encourages both sides to take dangerously cantankerous actions to constantly figure out what's on my mind and to constantly test the resolve and intentions of the U.S. government. That can elevate the point of tension which might reach the point of explosion some day.
GWEN IFILL: Well, we're going to have to leave it there for tonight. Thank you all very much.