On an island where major elections have been fought largely on ideological issues such as Taiwan's identity and its ties with China, the upcoming race is decidedly different.

The buzzword is the economy. Confronted with gloomy job prospects, rising costs and stagnant incomes, Taiwanese voters are likely to vote from their pocketbooks.

That could spell trouble for the ruling Democratic Progressive Party (DPP), say analysts.

Opinion polls have shown that DPP presidential hopeful Frank Hsieh is trailing his rival Ma Ying-jeou of the main opposition Kuomintang (KMT).

The pro-independence DPP - which swept to power in 2000, ending 51 years of KMT rule - has borne the brunt of the blame for Taiwan's economic woes.

Despite persistent calls for the government to ease restrictions on air and trade links with China, the DPP has made little progress on these issues in its eight years in power.

The ruling party is also largely blamed for the vicious confrontation between the rival parties which has resulted in policy gridlock.

Without a clear consensus on Taiwan's economic direction, the island - once hailed as an economic miracle - now lags behind its Asian rivals.

A string of graft scandals incriminating President Chen Shui-bian and other DPP officials has further eroded support for the party.

These factors have deepened the sense of malaise among Taiwanese, who may be ready for change, say some observers.

Tapping into the shift in voter sentiments, Mr Ma, has run his campaign focusing on plans to revive the economy and liberalise cross-strait exchanges.

This has prompted Mr Hsieh's DPP to try to woo voters with a vision of a 'blissful economy' which advocates sustainable growth and bridging the income gap.

Like his KMT rival, Mr Hsieh has also pledged to negotiate direct air links and open up Taiwan to mainland tourists if he is elected.

Such a shift in voter sentiment reflects the maturing of Taiwan's electorate, which previously voted largely along the fault lines of Taiwanese identity, say analysts.

Despite a lacklustre governance record, Mr Chen was narrowly re-elected in 2004 by capitalising on his credentials as a full-blooded Taiwanese.

'If the 2004 election was a vote for Taiwanese identity, the upcoming race is a vote for the economy,' said Professor Philip Yang of the National Taiwan University.

That said, the China factor - a hot-button issue which the DPP has played to its advantage in past elections - still figures in the upcoming race, though less prominently.

Mr Chen has proposed to hold, alongside the March 22 presidential election, a referendum on Taiwan's bid to join the United Nations, infuriating Beijing and Washington.

But voters' enthusiasm for the move - widely seen as a vote-grabbing ploy - appears to have fizzled out.

However, despite the odds stacked against Mr Hsieh, some observers say it is too early to write off the seasoned campaigner.

His strategy of playing the China fear card may galvanise DPP supporters who are disappointed with the party's governance record.

Attacking Mr Ma's plans to eventually forge a common market with China, Mr Hsieh has warned that this would allow Chinese labour to flood Taiwan, leaving 'Taiwanese men with no jobs, and women with no husbands'.

Mr Hsieh has also evoked fears of a return to one-party rule should the KMT, which already controls the Parliament, also clinch the presidency.

If this former school debater and lawyer could argue his case convincingly, he could still swing the vote, given the sizeable group of undecided voters - 20 per cent to 30 per cent, according to various polls.

Still, to many Taiwan observers, regardless of who emerges the final victor, the watershed election will herald a fresh start for Taiwan's relations with China and its strongest backer, the United States.

Both candidates are widely seen as more pragmatic and reconciliatory than President Chen, who has plunged ties with Beijing and Washington to new lows with his provocative pro-independence moves.

hwee@sph.com.sg