Taiwan's President Ma Ying-jeou was on Saturday re-elected for a second term after a closely fought electoral contest, whose verdict was seen as giving his ruling Kuomintang (KMT) party the mandate to continue policies aimed at boosting economic ties and relations with China.

Mr. Ma held off a strong challenge from the Democratic Progressive Party’s (DPP) Tsai Ing-wen, who rode a wave of popular support amid increasing anxieties over rising unemployment and concerns about the island’s sovereignty.

Under Mr. Ma's presidency, cross-strait relations improved markedly, with the introduction of direct flights and the signing of a landmark Economic Cooperation Framework Agreement (ECFA).

Although concerns about the local economy were a key issue for voters on Saturday, the election emerged as a verdict on the KMT’s China-friendly policies, analysts said, framed by some as a contest between continued stability and aspirations for greater sovereignty.

Mr. Ma ultimately emerged as the victor in a race that was closer than many expected. He won 51.5 per cent of the vote, while Ms. Tsai of the DPP garnered 45.7 per cent as of Saturday night, with 95 per cent of precincts reporting. Ms. Tsai resigned from her post as DPP chairwoman after the results were announced, conceding defeat.

The election was closely watched in Beijing, with China worrying that a DPP victory could return recently warming relations to the strained days under the presidency of Chen Shui-bian.

Thousands of Taiwanese who do businesses in China flocked back to Taipei to cast their vote on Saturday after Ms. Tsai’s popularity surged in recent days, with companies fearing that a DPP win would derail recently flourishing cross-strait commerce.

Taiwan has been self-administered since 1949, when Chiang Kai-shek’s KMT fled to the island after losing the civil war to the Communists. Since then, relations have been strained. China still seeks reunification, considering Taiwan as a province.

While Beijing says it wants to bring the island back under its fold through peaceful means, it has also threatened the use of force if Taiwan declares independence – some 1,500 missiles are thought to be positioned across the Taiwan Strait.

While Mr. Ma has argued that Taiwan’s future lies in a closer economic embrace with China, the DPP and Ms. Tsai have attacked him for carrying out policies which they say have left rising inequality and risked diluting Taiwan’s sovereignty.

Despite both issues resonating with many Taiwanese, as evinced by the recently growing support for Ms. Tsai, voters ultimately cast their ballot for Mr. Ma’s assurance of stability and continued growth.

“This is not my personal victory, the victory belongs to all Taiwanese,” he told supporters in Taipei, the Associated Press reported. “They told us that we are on the right track.”

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