At the entrance to Taiwan's Peitou park, his mouth a deep red after years of chewing betel nut, Li Chang is selling souvenirs of his favoured presidential candidate - Chen Shui-bian of the Democratic Progressive Party. On sale is a gold-coloured NT$1,000 banknote with two images of Mr Chen and the name 'Formosa', plastic models of him and woollen hats and caps. 'We must separate from the mainland,' he said. 'President Chen will declare independence after two years. We will have a war with China lasting a week and, with the help of the US, Japan and the international community, we will win. It will not just be our army against China's.' In Peitou, a pretty town of hot springs and hotels on the northern outskirts of Taipei, electors are considering not only war and peace with China but also the town's traditional industry: sex. After hot springs were discovered there in the late 19th century, the Japanese who ruled Taiwan developed Peitou into a resort of inns and geisha houses. After World War II, the sex industry continued to flourish, with women delivered to clients on scooters. The local museum has photographs of the geishas, the scooters and a copy of the certificate the KMT police gave to prostitutes. By the mid-1980s, the government became embarrassed by the industry and closed it. 'After the closures, the town went into decline,' said Liu Mei-chen, running a small restaurant overlooking the park. 'The town's sex industry was famous and attracted people from Japan and Hong Kong, as well as Taiwan. The profits went to a few people but it brought business. 'When he was mayor of Taipei from 1994 to 1998, Chen did much for Peitou, promoting a cleaner kind of tourism - educational tours and walks. We thank him for it,' she said. 'What we need is more events.' But, while the prostitutes on scooters may have gone, the business continues. Hotels hire out rooms for NT$450-$600 for two hours for a bath of sulphurous water and a tumble on the sheets. But be careful - the hotels sometimes videotape the performance secretly to sell later as pornographic movies. 'As mayor, Chen closed the legal brothels of Taipei. It was a mistake,' said Wang Ming, an official at the museum. 'He simply drove the business underground. You cannot stop it. He is not getting my vote because he is too young and too drastic. You need to introduce changes gradually. 'The KMT are too dirty and carry too heavy a burden, so I will vote for [James] Soong,' he said. 'He is experienced and trustworthy.' The museum displays pictures of the town's past - a secret visit in 1913 by Sun Yat-sen, who overthrew the Qing dynasty in 1911 and was elected president of the republic. But he was driven out of power and fled to Taiwan. In 1923 the guest was Hirohito, then a prince and later emperor of Japan, who enjoyed a bath in what is now the museum's ground floor. Although it was the Japanese who developed the hot springs, the town does not care much for their heritage. Japanese homes, with the wooden walls and sloping tiled roofs, lie deserted and rotting, next to modern hotels and apartment blocks.