The Taiwan dollar also surged to its highest close in more than a decade against its US counterpart, ending the trading day at NT$30.229 to the greenback.

 

Taiwan's traders are betting that Ma will follow up on promises to boost business and reinvigorate the economy by smoothing the island's often troubled ties with Beijing.

 

After winning the elections on Saturday, Ma reiterated promises to improve ties with China by pressing for closer trade ties, direct air and tourism links.

 

The former Taipei mayor also said he would work to establish a peace treaty that would end decades of hostilities since Taiwan split from the mainland in 1949.

 

Ma's pro-China  plan 


Ma Ying-jeou has made a number of proposals to improve ties with China.

 

- He supports a "common-market," similar to the European
Union's, between China and Taiwan

 

- He will open up regular direct flights between Taiwan and China

 

- He will conclude a deal opening up Taiwan to more mainland Chinese tourists by July 1

 

- He will push for a common market agreement similar to the Closer Economic Partnership Arrangement (CEPA) between Hong Kong and China

The peace accord would include military confidence-building measures to avoid a flashpoint incident.

 

Speaking in the wake of his win Ma appealed for public trust and - before even being installed in office - kicked off his re-election campaign, saying: "If you give me eight years, I will lay the foundation for a century of peace and prosperity."

 

The Harvard-educated Kuomintang (KMT) party candidate won 58 percent of the vote, trouncing Frank Hsieh of the ruling Democratic Progressive Party (DPP), by almost 17 points.

 

Ma's victory gives the KMT overall control of the nation, after the party crushed the DPP in parliamentary elections in January on the back of economic malaise and weariness over strained relations with China.

 

The vote had been watched closely by Beijing and Washington for signs of a new approach after eight years of recurring tensions under Chen Shui-bian, the outgoing president.

 

George Bush, the US president, sent his congratulations to Ma on Saturday, saying his win represented a new chance for China and Taiwan to resolve their differences.

 

Ma said he backed a 1992 consensus between Beijing and Taipei under which both accepted the formula of "One China" but agreed to interpret it to suit their own purposes.

 

He also reiterated a promise not to declare Taiwan's dependence – a move China has said would trigger a possible military invasion of the island.

 

However Ma said the promise not to pursue independence was tied to pledges not to negotiate unification with China and to oppose the use of force.

 

"Taiwan's identity has to be respected," he said. "We will negotiate with each other on an equal footing."

 

Ma said he had "no plans" to visit China, but added that if there was a progress on "substantive issues" then he would consider doing so.