* Cheng Li-wun to assume KMT leadership on November 1 * KMT, Taiwan People's Party have most seats in parliament * Cheng beat former Taipei Mayor Hau Lung-bin in KMT leadership race TAIPEI, Oct 18 (Reuters) – Taiwan's main opposition party, the Kuomintang, elected a firebrand new leader on Saturday who opposes increased defence spending but pledged to ensure peace with giant neighbour China. Former lawmaker Cheng Li-wun, who will take over as leader on November 1, won the election at a time of rising military and political tensions with Beijing, which views the democratically-governed island as its own territory. Taiwan's government strongly objects to China's sovereignty claims. While the Kuomintang (KMT) lost the presidential election last year, the party and its ally the small Taiwan People's Party together hold the most seats in parliament, creating a headache for the ruling Democratic Progressive Party trying to get the budget and its legislation passed. The KMT traditionally espouses close relations with China, and speaking at party headquarters in Taipei, Cheng said the KMT under her leadership would be a "creator of regional peace". "The KMT will make our home the strongest shelter for everyone against life's storms. Because we will safeguard peace across the Taiwan Strait," she said. Cheng, who started out in politics in the DPP, said during the campaign that she did not support increasing the defence budget, a key policy of President Lai Ching-te's administration, spending which also has strong U.S. backing. Chinese state media reported that Cheng had won the vote, but otherwise the government there offered no other immediate comment. Cheng, 55, beat the establishment candidate former Taipei Mayor Hau Lung-bin, 73, with slightly more than 50% of the vote, though turnout was under 40% of party members. Accusations of Chinese interference in the election from a key supporter of Hau's, the KMT's vice presidential candidate last year, Jaw Shau-kong, overshadowed the campaign. Jaw said social media accounts had spread disinformation about Hau. China said on Wednesday that the election was a KMT matter, and that online comments did not represent an official stance. Cheng, asked by reporters after winning the election about the Chinese interference accusations, said it was irresponsible to use the "red label" – the colour of China's Communist Party – as a "cheap tool for political struggle". Taiwan will hold mayoral elections next year which, while mostly focusing on domestic issues, will be an important measure of support ahead of the 2028 presidential vote. (Reporting by Ben Blanchard; Editing by Emelia Sithole-Matarise)
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