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In elections highlighting Taiwan's transition to democracy and its reluctance to anger China, the ruling Nationalists lost control of the capital but retained the governor's office Saturday.

The opposition Democratic Progressive Party won the first mayor's race in Taipei in 27 years, giving it a powerful springboard for the 1996 presidential election. But its campaign for independence from China scared off voters in the governor's contest, the island's first ever.Taiwan became a refuge for the Nationalist government in 1949 after the Communist takeover of the Chinese mainland. It was a virtual dictatorship until 1987 when the Nationalists began to relax their grip on power.

China sees Taiwan as a renegade province and has warned it will use force to prevent the island from setting itself up as a sovereign power. The Nationalists have shown little desire to do that, regarding themselves still as the rightful rulers of the mainland.

Voters showed they preferred President Lee Teng-hui's policy of preaching reunification while trading peacefully with China and making modest efforts to assert Taiwan's separateness.

The opposition DPP captured Taipei with 43.7 percent of the vote for Chen Shui-bian, against 25.9 percent for Nationalist incumbent Huang Ta-chou. Huang was hurt by the New Party, a Nationalist splinter that got 30 percent.

Chen, a 43-year-old lawmaker, was cheered by some 30,000 flag-waving supporters and told them: "My friends, brothers and sisters, I congratulate you all. Let's join hands to rewrite Taipei's history."

The Nationalists made up for the humiliation in a separate vote for governor. Incumbent James Soong won 56 percent of the vote to 38.7 percent for the DPP's Chen Ting-nan.

In Kaohsiung, Taiwan's second city, Nationalist incumbent Wu Tun-yi remained mayor with 54 percent, compared with 39 percent for the DPP's Chang Chun-hsiung. The last mayoral election in Kaohsiung was in 1979.

The Nationalists also kept control of Taiwan's provincial assembly and Kaohsiung's city council but lost control of Taipei's council to New Party and DPP candidates.

The elections are likely to hearten Taiwan's foreign supporters who say it's time to bring this international outcast in from the cold.

China consistently works to thwart Taiwan diplomatically and block Lee from traveling abroad. But increasingly, the world's democracies are asking why wealthy, capitalist Taiwan should be ostracized while Communist China is a welcome diplomatic partner.

The United States gave this argument modest recognition in September by loosening restrictions on Cabinet-level contact. The first fruit of that policy change will be seen Sunday when U.S. Transport Secretary Federico Pena arrives on a visit here.