Taiwan's ruling party claimed a re-election victory for President Ma Ying-jeou on Saturday, a result that would keep the island strengthening its economic ties to China while reducing the chances of new regional tensions.

With about 99 per cent of the vote counted, the official Central Election Commission said President Ma Ying-jeou had garnered 51.6 per cent of the total against 45.6 per cent for Tsai Ing-wen of the main opposition Democratic Progressive Party. A third candidate, James Soong, once a heavyweight with Ma's Nationalist Party, had 2.8 per cent.

Ma's Nationalist Party also retained control of the 113-seat legislature, though with a reduced majority.

Ma was expected to appear before jubilant supporters who had thronged to his campaign headquarters in downtown Taipei, the capital.

"Voters used their ballots to support us because we were on the right track to push for a peaceful cross-strait relationship and to gain diplomatic space," said Taipei Mayor Hau Long-bin, a Nationalist Party member.

Ma, a 61-year-old former justice minister and Taipei mayor, staked his re-election on his success in tying Taiwan's high-tech economy ever closer to China's lucrative markets.

Tsai, 55, who has a doctorate from the London School of Economics, had shown no sign of undoing the economic aspects of Ma's China policies, though she charged that they have helped spawn economic inequality in Taiwan. She had also accused Ma of undermining Taiwan's de facto independence in exchange for benefits from the mainland — a claim that resonated strongly with her party's pro-independence base.

18 million Taiwanese were eligible to vote

Beijing sees in Ma its best hope of promoting its long-held policy of bringing Taiwan under its control, not least because of his declared willingness to consider entering into political talks if he is re-elected. The United States favored no candidate but regards a continuation of good cross-strait ties as a key to regional peace and economic development.

Eighteen million Taiwanese were eligible to vote in Saturday's polls, and about 80 per cent of them were believed to have voted. Legislative elections being held at the same time were likely to see Ma's Nationalists retain a majority in the 113-seat house.

Ma and Tsai had crisscrossed the island for weeks in a hard-hitting campaign, offering their competing visions for Taiwan's future.

Ma's signature achievement has been the completion of a China trade deal in June 2010 that lowered tariffs on hundreds of goods. While most of Taiwan's $124 billion worth of exports to China last year were electronic goods such as television displays and cell phone chips, there was also a big upsurge in agricultural sales from southern Taiwan, long a stronghold of Tsai's party.

Taipei bank manager Frank Chang said he voted for Ma because of his efforts to improve ties with Beijing.

"China is a major economic power with the world's biggest demand for goods," he said. "As a small island, Taiwan cannot isolate itself from the mainland and still maintain a viable economy."

Unemployment falling, income gap widening

Taiwan and China split amid civil war in 1949. China continues to regard the democratic island of 23 million people as part of its territory, and has worked insistently to bring it into the fold — by force if necessary, by persuasion if possible.

Taiwan, one of Asia's economic successes for decades and now a centre of high-tech development, has turned in a mixed performance under Ma. Unemployment has fallen in the past two years after reaching a high of 6.16 per cent in 2009, and preliminary growth figures for 2011 were a respectable 4.5 per cent. But housing prices in urban areas have skyrocketed and the income gap has widened, as large companies that invested in the China trade have profited handsomely from new opportunities.

Taipei office worker Chen Yen-fen said she voted for Tsai because she appeared to be a capable leader.

"A change of government will help resolve the widening gap between the rich and poor and many other problems," she said. 

In the closing days of the campaign Tsai moved toward the centre, promising to open a channel to China to offer assurances that she had no intention of embracing the pro-independence policies of Ma's predecessor, the DPP's Chen Shui-bian. Chen's policies infuriated Beijing, and caused great consternation in the U.S., Taiwan's most important security partner.

Ma had been buoyed by the arrival of an estimated 300,000 China-based Taiwanese businesspeople, most of whom are expected to vote for the president. Many Taiwanese businesses on the mainland are big Ma backers and have encouraged their workers to support him.