Opposition sweep to victory in Taiwan

• Story Highlights
• NEW: 90 percent of votes in, Nationalists win 85 seats in 113-seat parliament
  
• Contest widely seen as a referendum on President Chen Shui-bian's policies
  
• Nationalists want more active engagement with China, do not rule out unification
  
• Legislative election could also be a preview of March 22 presidential election

TAIPEI, Taiwan (AP) -- Taiwan's opposition Nationalist Party, which supports closer ties with mainland China, overwhelmingly won the country's parliamentary election Saturday in a major upset to the current government.

With more than 90 percent of the votes counted, the Nationalists had won 85 seats, including four for smaller aligned parties, in the 113-member parliament, reported ETTV in Taipei. It and other networks sent reporters to polling places to monitor results.

The ruling Democratic Progressive Party garnered only 27 seats.

Taiwan's election commission was expected to announce final numbers at 10:30 p.m. (9:30 a.m. ET).

The opposition victory is a blow to the government of President Chen Shui-bian, who has sought to formalize de facto independence for Taiwan and who faces a presidential election on March 22.

Chen, who has served two terms as president will not be able to stand in that vote. Instead Frank Hsieh, the DPP candidate, will face the Nationalists' Ma Ying-jeou, who he currently trails by around 20-points in opinion polls.

Chen acknowledged the defeat at a news conference and said he would resign as party chairman. His party had hoped to win at least 50 seats.

There are 17 million Taiwanese registered to vote from a population of 23 million.

A major election issue was the economy, political observers said. Salaries have remained stagnant and unemployment is high in one of the world's top 20 economies, while the prices of consumer goods have soared -- at the same time as China has enjoyed an economic boom.

The Nationalists have promised to boost the economy by allowing Chinese tourists to visit the island and arranging direct flights between Taiwan and China.

If the Nationalists take the presidency, they will then be able to end years of deadlock between the nation's legislative and executive branches. Initiatives that the Nationalists have stalled in recent years have including a multibillion-dollar sale of American weapons to the island.

It could also see a thawing of the island's often frosty relationship with China, with the Nationalists not dismissing the notion of possible reunification with the mainland -- an issue of serious dispute since the unresolved civil war of the 1940s. China refuses to recognize Taiwan's de facto independence from the mainland.

Beijing's attitude towards Taiwan has also been the source of tension with Washington for several decades.http://www.printthis.clickability.com/pt/cpt?action=cpt&title=Opposition+sweep+to+victory+in+Taiwan+-+CNN.com&expire=-1&urlID=25822935&fb=Y&url=http%3A%2F%2Fedition.cnn.com%2F2008%2FWORLD%2Fasiapcf%2F01%2F12%2Ftaiwan.election%2Findex.html&partnerID=212106