In 1981 he was elected a member of the Taiwan Provincial Assembly for Yilan County. Yu, Su Tseng-chang, and Hsieh San-sheng made the so-called "iron triangle" in the Assembly. The three were the only members ever to resign from the Assembly. From 1983 to 1984 he was the Tangwai Secretary-General. He became Convener of Tangwai National Election Backing Committee in 1986. As a founding member of the Democratic Progressive Party, he was a member of its Central Committee from 1984 to 1986 and its Central Standing Committee from 1986 to 1990 when he was elected the Magistrate of Yilan County, during which he was a member of the Educational Reform Committee of the Executive Yuan from 1994 to 1996. In his second term as magistrate, Environmental Protection, Tourism, Information Promotion, and Culture were his four main goals in administration. The successful planning and execution let him ranked the first one of 27 mayors/magistrates in Taiwan. After the completion of his two terms as magistrate in 1997, he was in 1998 appointed Chairman of the Taipei Rapid Transit Corporation by then Mayor Chen Shui-bian. He resigned in 1999 to become Secretary-General of the Democratic Progressive Party. He was the chief spokesman for the DPP campaign in the 2000 presidential election. With Chen Shui-bian's election to the presidency, he was appointed Vice Premier under Premier Tang Fei. In July 2000, four construction workers were trapped by the rising floodwaters of Pachang Creek. As local and central government authorities squabbled for three hours over who would send out a rescue helicopter, the men drowned. In the public outrage that ensued, officials up the chain of command, including Premier Tang, tendered their resignations. Vice Premier Yu, who was also chairman of the Committee of Disaster Relief and Prevention, had his resignation accepted. Six months later, Yu rejoined the administration as Secretary-General to the Office of the President and served until his promotion to the premiership on February 1, 2002.
Premiership
As premier, Yu defended the administration's position on the peace referendum and promoted a NT$610.8 billion arms procurement package in 2004. He caused some minor controversy when he used the designation "Taiwan, ROC" on an official visit to Honduras. Chen later said he preferred "Taiwan." In September 2004, he directed the government to refer to the People's Republic of China in official documents as simply "China" as opposed to "mainland China" or "Communist China" as was previously done in order to highlight a "separate Taiwanese identity." This move was not endorsed by the Presidential Office and the Mainland Affairs Council clarified that it would only apply to internal documents. Yu and his cabinet resigned en masse following the pan-Green Coalition failure to gain a majority in the 2004 legislative elections. In the ensuing cabinet shuffle, Yu was returned to the presidential office as secretary-general and succeeded as premier by Frank Hsieh. On January 15, 2006 he was elected chairman of the Democratic Progressive Party with 54% of the vote. Yu was a candidate for the DPP nomination for the 2008 presidential election. He secured 22,211 of the 140,720 votes, and declared his withdrawal in favor of former premier Frank Hsieh, who won 62,849 votes.
Corruption charges and acquittal
On September 21, 2007, Yu, along with Vice President Annette Lu and National Security Office secretary-general Mark Chen, were separately indicted on charges of corruption by the Supreme Prosecutor's Office of Taiwan. Yu was accused of embezzlement and special fund abuse of about US$70,000. He resigned his post as chairperson of the Democratic Progressive Party later that day. On July 2, 2012, all three were acquitted of all charges.
Yu is the founder of Kavalan Journal, which is named after the Kavalan Taiwanese aborigines. With Yang Pao-yu, whom he married in 1978, he has two sons. His mother, Huang Shou-chu, died in December 2002.
