KMT warns of invasion in desperate plea to voters

Taiwan's ruling Kuomintang warned last night of the threat of a mainland invasion, in a desperate attempt to prop up the floundering campaign of its presidential candidate Lien Chan.

Television adverts placed by the KMT said that if pro-independence candidate Chen Shui-bian won the presidency, Taiwanese 'families, lives and properties' would be in jeopardy.

Another advert said hundreds of mainland missiles were pointing at Taiwan and only the KMT candidate could defuse tension.

Last night, President Lee Teng-hui said a Chen presidency would bring 'chaos and instability' to Taiwan.

The adverts ran after a day in which Taipei spent more than NT$20 billion (HK$5 billion) from its National Stability Fund to prevent a market crash precipitated by Premier Zhu Rongji's warning to voters on Wednesday. Other government-related funds pumped in NT$10 billion.

In early trading, the Taiwan bourse dropped 4.51 per cent, or 389.57 points. But following government intervention, it closed 0.49 per cent up at 8,682.76. The Government's ability to steady the market buttressed Mr Lien's claim the KMT could best maintain stability.

Mr Lien, the Vice-President, used Mr Zhu's threats to attack Mr Chen, the Democratic Progressive Party candidate, who is believed to be slightly ahead both of Mr Lien and independent candidate James Soong Chu-yu.