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DATE=3/24/2000 TYPE=CORRESPONDENT REPORT TITLE=CHINA - LEE REACT (L ONLY) NUMBER=2-260545 BYLINE=STEPHANIE MANN DATELINE=BEIJING INTERNET=YES CONTENT= VOICED AT: INTRO: China has acknowledged the resignation of Lee Teng-hui as the head of Taiwan's Nationalist Party, saying he was forced out by public pressure. V-O-A correspondent Stephanie Mann reports from Beijing, news coverage by China's state-run media has emphasized the turmoil in the Nationalist Party in the wake of Saturday's presidential election on Taiwan. TEXT: China's official Xinhua news agency says Lee Teng-hui was forced to announce his resignation today (Friday) as chairman of the Nationalist Kuomintang Party because of mounting pressure from public opinion. Xinhua says the Kuomintang suffered a humiliating defeat in the election, and demands for Mr. Lee's resignation became louder and louder. The report says calls for his immediate resignation spread from Kuomintang headquarters in Taipei to other parts of the island and to overseas. The Xinhua story also says Mr. Lee's resignation was greeted with loud applause from the crowd that gathered around the party headquarters. While the government has not issued an official reaction to Mr. Lee's resignation, the Xinhua story indicates that he brought about his own downfall. China has been openly critical of Lee Teng-hui since 1995 when he made an unofficial trip to the United States. Beijing has labeled him a "splittist" for his efforts to raise Taiwan's international status and for his insistence that China and Taiwan treat each other as equals. In the week since the Taiwan election, China's state- run media have reported the dissension within the Kuomintang, and television newscasts have shown scenes of rioting and violence in Taipei. Other developments have not been reported, such as the decision by Taiwan's parliament to allow some direct trade and mail links with the mainland. Mr. Lee's party has ruled Taiwan for more than 50 years, just as the Communist Party has ruled on the mainland for the same five decades. Saturday's election on Taiwan was the first time Chinese voters have ousted a ruling party under a democratic system. Although the Xinhua story was primarily about Mr. Lee's resignation, it also notes that James Soong was the runner-up in the election and adds that he will form a new political party. But the report makes no mention of the man who won the election, Chen Shui- bian. // REST OPTIONAL // Before the election, China warned Taiwan's voters not to cast their ballots for Mr. Chen, whose Democratic Progressive Party advocates Taiwan independence. China has said his victory does not change the fact that Taiwan is part of China and any talks between Taiwan's new leader and the mainland should be based on the one-China principle. Since the election, China has not repeated its threat to use force to reunite Taiwan with the mainland, but Chinese officials say they are watching what Mr. Chen says and does. On Taiwan, Lee Teng-hui has been highly regarded and called "Mr. Democracy," for leading the island out of authoritarian one-party rule. But Mr. Lee is blamed for the Kuomintang's election defeat because he allowed popular politician James Soong to leave the party and run as an independent presidential candidate. His candidacy drew voters away from Kuomintang candidate Lien Chan, who finished a distant third. (Signed) NEB/SMN/FC/PLM 24-Mar-2000 04:05 AM EDT (24-Mar-2000 0905 UTC) NNNN Source: Voice of America .