The entire Kuomintang was joyful upon hearing the news of their landslide victory the National Assembly in 1983. In 1984, the legislative election results were much closer. The implications were unsettling for many within the party. The evidence suggested that Chiang Ching-kuo was significantly more popular among the Chinese people than the KMT. This was not good for the party’s prospects moving forward. Since Chiang was planning to abide by term limits, there was no guarantee of continued KMT rule after 1990. With the China Democratic Socialist Party and even the China Youth Party leaving the KMT coalition, things were getting worse for the party. The KMT had 438 members of the legislative Yuan, while their only remaining coalition partner, the Tibet Improvement Party, had 5. Chiang Ching-kuo was determined to do what he could to keep the KMT popular.
The Kuomintang and the China Youth Party worked together to liberalize the Chinese economy. Regulations were repealed, state-owned enterprises were privatized, and tariffs were reduced. The help of the CYP was necessary because around a quarter of the KMT strongly opposed privatization. These were mostly representatives from poorer districts, especially in the western part of the country. China was not alone in the trend of economic liberalization. This was the same decade that India ended the License Raj. Nevertheless, much of China felt left out by the new economic growth. Increasing standards of living were not affecting everyone. Some felt that the KMT was abandoning its earlier skepticism of unbridled capitalism. Others felt that the party wasn’t doing enough with regards to deregulation and privatization.
Of all the new members of the legislative Yuan elected in 1984, the most famous was Independent Li Ao of Songjiang Province. He had been an outspoken critic of the Kuomintang, and had been imprisoned twice. He constantly pushed for investigations into election-rigging and human rights abuses. In particular, he led efforts to investigate Ba Zhongtan for wrongdoing during the Tsingtao incident in 1976. An investigation would be allowed, where Ba Zhongtan would be tried by the Judicial Yuan, and sentenced to five years in prison in 1985. This was a move that satisfied very few. Some were outraged by the short sentence, and also the lack of investigation of Chen Lifu, who was president at the time. Others saw the investigations as a sign of weakness on the part of Chiang Ching-kuo.
Just like the Kuomintang Future Committee was formed by democracy supporters within the KMT, authoritarians formed their own network. They united to oppose democratic reforms. These men included General Teng Jie, former Premier Shen Changhuan, Agriculture Minister Zhang Baoshu, Jiangsu Governor Jiang Zemin, and Member of the Legislative Yuan Wu Chunqing. They had some sympathy from Vice President Wang Sheng. Their goals were to halt and possibly reverse reforms. They wanted to outlaw the New Democratic League, seeing the party as a front for Communism. They were also looking to the future, and hoping to promote like-minded people within the party. They were mostly in favor of Wang Sheng, who was more moderate than they were, but was still on the authoritarian side.
On the other hand, there were others who wanted Chiang to do more. They wanted more prosecutions. They wanted more openness. Human rights activists and opponents of the government were still being arrested. There were people who had “disappeared” under suspicious circumstances over the last few decades, and people wanted answers. Others attacked the entire ROC system as undemocratic, particularly the method of choosing the president. The Liberal Party and New Democratic League called for the abolition of the National Assembly. Instead, elections would be decided by the popular vote, with a runoff election if no candidate gained a majority. General Chiu Chuang-huan argued instead for the creation of an American-style electoral college. In 1985, reform minded Chinese officials met to discuss possible changes, but they couldn’t come to an agreement.
Chiang Ching-kuo was happy to see Alexander Shelepin replaced by Yegor Ligachov as leader of the Soviet Union. Both Chiang and Ligachov saw each other as men who could be worked with. They both hoped to deescalate the Cold War. Chiang decided that China would stop supporting Kazakh insurgents in the Soviet Union. This cause friction between Chiang and much of the KMT, including his predecessor Chen Lifu, who had begun the funding of Kazakh rebels. Kazakh nationalists saw Chiang’s actions as a betrayal. He also was considering ending support to Afghan rebels if the Soviets could agree to a withdrawal from Afghanistan, or possibly even abandon East Turkestan. Ligachov seemed amenable to at least part of what Chiang wanted.