The cooling of tension across the Taiwan Strait would bode well for stability in the region.

The two-way race could be headed for a closer-than-expected finish, though pundits believe opposition Kuomintang (KMT) flagbearer Ma Ying-jeou will beat his rival Frank Hsieh of the ruling Democratic Progressive Party (DPP) by a single-digit margin.

Still, there is a palpable mood of optimism that the new leader - whether it is Mr Hsieh or Mr Ma - could mend frayed ties with China and the United States. The optimism stems in part from the two men's personalities.

Both are seen as moderates, unlike the antagonistic President Chen Shui-bian who has repeatedly riled Beijing and Washington with his pro-independence antics during his eight years in office.

Mr Ma and Mr Hsieh are unanimous in voicing support to liberalise air and trade links with China.

In a final push for votes yesterday, both candidates pledged to mend ties with Beijing.

'Taiwan must open up to the world and must not keep shutting itself out of the world,' said Mr Ma, 57, who has made liberalising cross- strait economic links a central plank of his economic-heavy platform.

Mr Hsieh, 61, also vowed to tweak the stance of his pro-independence party.

'I will resume dialogue, including with China,' he said at a press conference yesterday.

'In the past the DPP was criticised for not opening up, but I will be more compromising, I will do better. That's my pledge.'

Observers say where the two politicians differ has to do with how quickly and to what degree they will open to China.

'If Mr Ma is elected, the pace is likely to be more swift. He has less baggage because his party favours closer ties with China,' said Professor Li Da-jung of Tamkang University.

Even if Mr Hsieh were to win the presidency, an increasingly confident Beijing would be more willing and ready to deal with him.

'It is the result of cumulative learning about how to handle Taiwan in a more realistic manner,' said Professor Lin Chong-pin of Tamkang University.

The shift in ground sentiments in favour of closer economic ties with the mainland could also put pressure on hawkish factions within the pro-independence DPP to soften their stance.

While observers say there is unlikely to be a major breakthrough on the political front, they noted that progress in negotiations on economic issues could sweeten the mood across the Taiwan Strait.

'That means the United States and countries in the region could breathe easier,' Prof Li told The Straits Times.

Many Taiwanese see closer cross-strait links as the key to revitalising the island's flagging economy, which has emerged as a top concern for voters in the presidential race.

But as the race intensified, Mr Hsieh pulled out the China fear card.

The tried-and-tested strategy seemed to have worked somewhat for him to close the gap with Mr Ma.

Although Beijing has taken pains to keep out of this year's Taiwanese election, last week's crackdown against anti-China protesters in Tibet gave Mr Hsieh fresh ammunition to re-ignite fears among Taiwanese about their giant neighbour.

He used the Tibetan issue to question the China-friendly stance of Mr Ma, whose parents were from the mainland.

'Hsieh suddenly found his own Iraq, and that is Tibet,' wrote Taiwanese daily China Post, referring to how US President George W. Bush won the 2004 election by capitalising on the Iraq issue.

The DPP politician has also stoked concerns about how Chinese workers could compete with Taiwanese for jobs if Mr Ma presses ahead with a plan to eventually forge a common market with China.

The interplay of these factors appears to have chipped away at Mr Ma's lead.

It could also shift voters' attention from pocketbook issues and the DPP's dismal economic record.

'The China factor has always figured in Taiwanese presidential elections,' said Prof Lin, a former deputy defence minister.

'In the beginning, the race was about the economic slowdown, livelihood of the lower income group and corruption,' he told The Straits Times, referring to this year's race.

'However, in the past week, China has become the No. 1 issue thanks to the Tibetan issue and the common market factor,' he said.

Ultimately, the election outcome could boil down to whether about 17 million eligible Taiwanese voters cast their ballots along the old fault lines of Taiwan's ties with China or on bread-and-butter issues.

Some believe that pragmatism would rule the day.

Said Prof Li: 'Despite all the heated election rhetoric, it would be back to pragmatism after the race.'

hwee@sph.com.sg