Unnerved by Chinese military threats, Taiwanese voters trimmed the ruling party's majority in legislative elections Saturday and boosted a new party that promises to work for peace with Beijing.

The election was held under the shadow of Chinese military maneuvers and threats widely seen as an attempt to scare voters from candidates who would make Taiwan independent and abandon the doctrine that it is a part of China.The result confirmed the steady downward trend of the Nationalists, Asia's longest-ruling non-Communist party, since they abandoned dictatorship and launched Taiwan on the road to democracy eight years ago.

Though the ruling Nationalists maintained their grip on the 164-member Legislature by winning 85 seats, their majority was cut by 11 seats from the previous election in 1992. The Democratic Progressive Party, which advocates Taiwanese independence, gained only four seats, to 54.

Most impressive was the New Party, which broke away from the Nationalists two years ago, accusing them of watering down their commitment to reunification with China. They captured 21 seats.

China claims sovereignty over the island, viewing it as a breakaway province. While no friend of the Communists in Beijing, the New Party says it can deal with China without provoking it.

"Taiwanese used their ballots to demand a more stable relationship" with China, said political scientist Chang Ling-cheng of National Taiwan University. "They felt their dreams should give way to reality."

He was referring to Taiwan's jubilation in June when President Lee Teng-hui unofficially visited the United States, crowning a drive to broaden Taiwan's international presence against a diplomatic blockade by China.

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China saw Lee's U.S. visit as a tacit move toward independence, and began test-firing missiles near Taiwan, staging military exercises, vilifying Lee and floating hints of an invasion if Lee didn't recant.

Taiwanese business has taken fright. The stock market has plummeted, and money is being poured into the safety of foreign currencies.

But even without the Chinese threat, the Nationalists are facing their toughest challenge since 1949, when they fled the Communist takeover of China and set up their government in Taiwan.

They are seen as having grown rich and corrupt from 46 years of unbroken rule.

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