Taiwan ruling party to retool after another defeat

TAIPEI (Reuters) - Taiwan's ruling party, which lost the presidency on Saturday, will replace its chairman as tries to rebuild its image as a champion of Taiwan identity -- without the confrontational tactics that turned many off.

The Democratic Progressive Party (DPP) was hatched in 1986 as a pro-democracy, grassroots alternative to decades of one-party rule under the Nationalist Party (KMT).

Its loss of the presidency on Saturday by a wide margin, following eight years in the office by the confrontational Chen Shui-bian, comes just two months after another major setback in which the party was routed in legislative elections.

The DPP has grappled with a number of issues, including deeply divided factions, corruption allegations and an agenda that has lost its appeal with pragmatic voters, analysts say. Its antagonistic campaign tactics are also a turn-off, they add.

"The DPP needs to seriously rethink everything it's doing," said Shelley Rigger, an East Asian politics expert at Davidson College in the United States.

"There are many, many forward-looking, committed, sensible people in the party. Whether they can assert themselves and come to the fore in the wake of two consecutive drubbings remains to be seen," she said.

The 500,000-member party will hold high-level meetings and pick a new chair as early as this week after hearing how each candidate for the job would run Taiwan and manage the party, party officials said on Monday.

"No matter whether we won or lost the presidential election, we would hold these meetings," said Hsu Kuo-yung, a DPP legislator.

The DPP lost the presidency and parliament mainly because voters got tired of Chen's hard political line against Beijing without stronger efforts to take advantage of China's booming markets amid domestic employment issues.

Chen also antagonized Taiwan's most important ally, the United States, by promoting a referendum on United Nations membership that Washington saw as needlessly provoking China.

"If the party's intention is to pursue a state of de jure independence (from China), then it seems that the Taiwan electorate isn't interested in that at the expense of economic progress," said Alexander Huang, professor of strategic studies at Tamkang University in Taiwan.

China has claimed self-ruled Taiwan as its territory since the end of the Chinese civil war in 1949. It has never renounced the use of force to bring the island under its control.

(Editing by Bill Tarrant)