Ma Wins Second Term in Taiwan Election

President Ma Ying-jeou was elected to a second term as Taiwan’s president, giving him a renewed mandate to press for closer ties with China that have eased decades-old tensions across the Taiwan Strait.

Ma, the 61-year-old leader of the ruling Kuomintang Party, defeated challenger Tsai Ing-wen, the Democratic Progressive Party candidate, by 51.6 percent to 45.7 percent, with more than 99 percent of precincts reporting, the Central Election Commission said. James Soong, the People First Party chairman, received 2.8 percent of the vote. Taiwan has 18 million eligible voters.

“This isn’t a personal victory, this is a victory for the Taiwan people,” Ma said at a rain-soaked victory rally in Taipei tonight. “The people have approved our efforts to shelve disputes and strive for peace across the Taiwan Strait.”

Ma’s victory is an affirmation of his effort to improve Taiwan’s relationship with China after years of strained ties under his DPP predecessor and previous Kuomintang governments. Former U.S. officials said members of the Obama administration viewed a Ma victory as more conducive to maintaining good relations with China, as the U.S. seeks help from the leadership in Beijing in containing the nuclear programs of Iran and North Korea.

Smoother Relations

People in the U.S. administration “will feel the victory of President Ma will be advantageous to maintaining smoother relations with China,” Bruce Jacobs, a professor of Asian languages and studies at Monash University in Melbourne, who was in Taipei for the election, said by phone. “The Chinese will also be pleased.”

The U.S. welcomed efforts by Taiwan and China to improve ties in recent years, the White House press office said in a statement that congratulated Ma on his victory.

“We hope the impressive efforts that both sides have undertaken in recent years to build cross-Strait ties continue,” the White House said, according to the statement. “Such ties and stability in cross-Strait relations have also benefitted U.S.-Taiwan relations.”

‘Taiwanese Compatriots’

A statement from the State Council’s Taiwan Affairs office in China said Ma’s victory shows that better cross-strait ties are the “correct path and have the support of the Taiwanese compatriots.” The statement was released via the Xinhua News Agency.

Ma was backed by executives of Taiwan’s biggest companies, who said his policies, including a 2010 trade agreement with China, have boosted investment and helped the island’s economy grow.

“The stock market will rally on Monday,” Terry Gou, chairman of Apple Inc. supplier Foxconn Technology Group (2317), said in an interview with local television station TVBS in predicting a Ma victory earlier today.

Markets may have assumed a Ma victory. Option traders placed increasingly bullish bets earlier this month on an exchange-traded fund tracking Taiwan stocks. The ratio of calls to buy the iShares MSCI Taiwan Index Fund versus puts to sell rose on Jan. 6 to the highest level since March 2008, two months before Ma was sworn in for his first term.

Let People Down

“We’re very sorry that we let the public down,” Tsai, 55, said in a concession speech, where she also offered her resignation as head of the DPP. “The cross-strait relations is a complicated matter and cannot be treated in the naive way that the KMT is doing now or it will become a source of conflict for Taiwan people later.”

In his first term, Ma ended a six-decade ban on direct air, sea and postal links and signed 16 trade agreements with China, arguing that better ties with the mainland would create stability attractive to investors who feared the political risk was too high to put their money into Taiwan.

Jacobs said some members of Ma’s KMT were concerned that Taiwan was too dependent on China. In his victory speech, Ma pledged to “strengthen ties with the international community.”

Ma, who has law degrees from New York University and Harvard University, soothed Chinese leaders when he came into office in 2008 with his vow of “no unification, no independence, and no use of force.” China had criticized a push by the DPP’s Chen Shui-bian to seek sovereignty during his 2000-08 tenure as president. Chinese officials had warned that relations would suffer if Tsai had won.

Criticizing Others

“You can argue Ma overlooked some of the domestic issues, but it’s easy to criticize others,” said graphic designer Eric Wang, 27, who voted for Ma in 2008 and this year. “I don’t think Tsai can do a better job than Ma given such challenging global conditions.”

The Chinese government, which itself will undergo a leadership change later this year, has never ruled out the use of force to reunite with the island. Taiwan has been governed separately since 1949 after KMT forces were defeated on the mainland by the Communists in a civil war. China had as many as 1,200 short-range missiles deployed opposite Taiwan as of December 2010, according to an annual review by the U.S. Defense Department.

“I will use my life to protect the Republic of China’s sovereignty and dignity,” Ma said, using the formal name for Taiwan. “This is my solemn vow.”

Taiwan’s Legislature

Taiwan’s voters also elected members of the Legislative Yuan, the island’s parliament. The Kuomintang Party won 64 of 113 seats, the Central Election Commission said in a faxed statement, 17 fewer seats than the party won in 2008. The DPP won 40 seats, a gain of 13, while the nine remaining seats went to three other parties and an independent candidate.

Turnout for the presidential election was 74.4 percent, the commission said in a separate statement.

Taiwan’s economy will slow to 4.05 percent this year from 4.5 percent in 2011 and 10.7 percent in 2010, according to economists’ estimates compiled by Bloomberg. China’s economy grew at a 9.2 percent rate in 2011 and its expansion will slow to 8.5 percent this year, the data show.

Ma vowed to learn from the criticism leveled at him during the campaign by Tsai, who said Taiwan was losing jobs to China and that the gap between rich and poor was increasing.

“I hope in the next four years the wealth gap will narrow and we will take care of the underprivileged,” Ma said. “I want Taiwan to continue to have a stable environment for growth.”

To contact the reporters on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net; Chinmei Sung in Taipei at csung4@bloomberg.net; Michael Forsythe in Beijing at mforsythe@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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