Prior to the 1998 elections, DA entered into a coalition with VMRO-DPMNE with which it won the elections and formed a ruling government. The period in the government of this party, from the end of 1998 to the end of 2000, will be remembered mostly for the controversial decision to recognize the Republic of China instead of the People's Republic of China. DA argued that such diplomatic move would help Macedonia attract significant foreign investment from Taiwan - with even a sum of US$1 billion being mentioned by Tupurkovski. Unfortunately, all of this proved to be only a dream, as Taiwanese money never came even after recognition from Macedonia. By 2002 Macedonia formally reversed its decision on Taiwan and after much wrangling re-established diplomatic relations with the People's Republic of China.
In addition to causing major problems for Macedonia's economy and international relations, the embarrassing fiasco cost DA its political future.
At the last parliamentary elections on September 15, 2002, the party won only 1.4% of the popular vote and no seats.