The biggest problem facing Li Ao during his presidency was holding his coalition together. The Liberal Party, the China Youth Party, and the China Democratic Socialist Party were all in a coalition together. Along with 22 independents aligned with this coalition, they held 441 out of 773 seats in the Legislative Yuan, 57% of all seats. If any of the three parties left the coalition, they would lose the majority. Li felt that it was best, at least for now, to remain an independent and thus appear as more of a neutral arbiter between the parties. He was most closely aligned with the Liberal Party, however. It was no secret that Li was more favorable to the CYP than the CDSP.
Li’s partiality towards the CYP was understandable. The CYP was much more important to his election than the CDSP. Li Ao’s center-right, nationalist views made him much more ideologically similar to the CYP as well. If the CDSP switched to the KMT’s coalition, while a seemingly unlikely event, the KMT would then regain control of the Legislative Yuan. Thus, CDSP politicians would be given government appointments. Henry Kao, the CDSP’s Vice-Presidential candidate in 1984, was appointed as Minister of Communication. Long-time member of the Legislative Yuan Kim So-hyun was appointed as Minister of transportation. Several party members would be appointed as judges and ambassadors as well. The highest position a CDSP member was given was President of the Control Yuan, given to Wen Jiabao.
The CYP and the Liberal Party would still get the Lion’s share of appointments. The CYP would receive more, considering that the Liberal Party had very few experienced government officials in comparison. The position of President of the Legislative Yuan was given to CYP (the largest non-KMT party in the legislature) member Bao Tong of Zhejiang. General Xu Qinxian, the Liberal Party’s Vice-Presidential candidate, became Vice-Premier. CYP party leader Rong Yiren was made Minister of Finance. Chen Xitong, who had switched between the KMT, CDSP, and CYP during his career, was made head of the Juntong. The KMT was even given a few positions. Most notable among these were Cheng Wei-yuan, the general who refused to crush the 1989 protests in Beiping. Li was hoping for more KMT defections.
After the 1992 elections, Li Ao had a friendly majority. This majority would work with the New Democratic League and reformist elements within the KMT. There was a great push to change how elections were done. A poll in 1992 showed that the majority of Chinese wanted the president to be elected by popular vote. The KMT was actually on board with this reform. The difference between the KMT and other parties was that the other parties wanted a runoff election while the KMT did not. This was because the KMT would easily win elections in the first round because their base of support was much larger. Attempts to amend the constitution failed in both the Legislative Yuan and the National Assembly. Finally, in 1993, enough of the KMT went along with runoff elections and an amendment was passed. The National Assembly would no longer elect the president or vice president, though it would still keep its other duties, including its role in impeachment and constitutional amendments.
In the 80s and 90s, freedom and capitalism were seen as going hand in hand. Thus, the pressure on Li Ao to deregulate and privatize was huge. The CYP led the charge for economic liberalism. The KMT was divided, with officials in the East generally in favor of economic liberalism and officials in the west generally opposed. The Liberal Party was divided as well. The NDL and CDSP were strongly opposed to further privatization and deregulation. Li Ao’s administration would see the further liberalization of the Chinese economy. The put a rift between right-wing and left-wing opponents of the KMT. The Chinese economy was booming, and many attributed this to the free market. In 1994, China overtook Japan in terms of GDP. Later that year, Li Ao gave a speech where he claimed that China would soon overtake America.
