The danger of a violent Chinese reaction to the victory on Saturday of the pro-independence candidate in Taiwan's presidential election appeared to recede yesterday - at least for the time being.
Despite its belligerent rhetoric of recent days, Beijing announced that it would wait and watch the actions of the winning Democratic Progressive Party candidate, Mr Chen Shui-bian, to see what he planned to do about cross-Taiwan Strait relations.
The dramatic election result is nevertheless a major loss of face for China's leadership and could have repercussions in the coming days.
In Taipei yesterday riot police used water canon to beat back angry Nationalist Party supporters who besieged their party headquarters demanding the resignation of the party chairman, Mr Lee Teng-hui, the outgoing Taiwan president, whom they blamed for the defeat.
It was later reported that the party's standing committee had decided to convene a congress in September during which the current leadership would step down.
Earlier, rioters smashed the windows of limousines leaving the party headquarters and punched party officials. Stones were thrown at police dragging barbed wire barricades around the building.
In his victory speech, the Taiwan president-elect held out an olive branch to Beijing, declaring that he would "with the greatest goodwill and determination enter into constructive links and dialogue on all aspects" with China.
However, he ruled out the one-country-two-systems formula, which would give Taiwan the status of Hong Kong.
Mr Chen received 4,977,737 votes or 39.3 per cent support in a turnout of 82.69 per cent.
The breakaway Nationalist candidate, Mr James Soong, came a close second with 4,664,932 votes.
The official Nationalist Party candidate, Mr Lien Chan, trailed in third with 2,925,513 votes.
Mr Soong, who defected from the Nationalist Party last year, said he would form a new political party, a move which could rip apart the old establishment.
Taiwan's finance ministry said it was cutting the stock market's daily downward volatility limit to 3.5 per cent from the current 7 per cent, effectively today.