TAIPEI (BLOOMBERG) - Leading Taiwan presidential candidate Eric Chu pledged to improve ties with China, casting his potential rematch against incumbent Tsai Ing-wen as a chance to reset ties with the mainland.

Mr Chu, who lost to Ms Tsai in the 2016 election, accused the president of stoking tension with China at the expense of economic growth.

The former New Taipei city mayor said he would work to deepen communication with the Communist Party in Beijing without compromising the island's commitment to democracy.

"We will achieve economic prosperity for the whole Chinese nation through cooperation between the two sides across the Taiwan Strait," Mr Chu said in an interview in Taipei.

Mr Chu was the first member of the opposition Kuomintang (KMT) to announce a run for the presidency after Ms Tsai's Democratic Progressive Party (DPP) suffered a resounding defeat in local elections in November.

While Mr Chu lost by 25 percentage points three years ago, opinion polls show him now leading by a similarly large margin in a potential head-to-head race next year.

Ms Tsai's popularity has slumped amid public dissatisfaction over a host of local issues ranging from stagnant wages to her left-leaning party's effort to legalise same-sex marriage.

But those concerns have been overshadowed by Beijing's effort to isolate Ms Tsai over her refusal to accept its bottom line that both sides belong to "one China."

DIVIDING LINE

China has long been a central dividing line between Taiwan's two biggest parties, with the DPP supporting legal independence and the KMT favouring closer economic ties with Beijing while maintaining self-rule.

Former President Ma Ying-jeou, a KMT member, held an unprecedented meeting with China's Xi Jinping in 2015, just two months before Ms Tsai's election.

Mr Chu blamed Ms Tsai for the decline in ties, specifically taking issue with her comments to CNN last week that China would have "to brace for impact on its own economy and other fronts" in the event of an attempted invasion.

"The leader of a country should protect all citizens from the danger of being trapped in a war," Mr Chu said. "And she should not try to gain political advantage by dragging the public into a war and causing harm."

OTHER CANDIDATES

Mr Chu has taken a more aggressive tact against Ms Tsai than in the last campaign, when the KMT put him on the ballot just weeks before election day to replace an unpopular candidate.

Still, he may have to overcome potential candidates from his own party before he gets a rematch against Ms Tsai in the general election, which could come as soon as January.

Former parliamentary speaker Wang Jin-pyng, Kuomintang Chairman Wu Den-yih, and newly elected Kaohsiung Mayor Han Kuo-yu, who all support closer China ties, have all been mentioned as possible contenders.

Former Premier Simon Chang, who served under Mr Ma, has also declared his candidacy as an independent.

Mr Chu, who holds a doctorate in accounting from New York University, said he favoured welcoming mainland investment and talent into Taiwanese industries that aren't deemed strategically important. The two sides have been ruled separately since the KMT moved the Republic of China government to Taipei during a civil war with the communists 70 years ago.

Mr Xi has signaled a desire to resolve the issue during his tenure, proposing last month "in-depth democratic consultations" to work toward unification. While Mr Xi stopped short of issuing a firm deadline, his remarks went further than his 2013 statement saying the political impasse "cannot be passed on from generation to generation."

Mr Chu sidestepped a question on whether he preferred eventual unification with China, describing it as a discussion for future leaders.

"What the two sides across the Taiwan Strait need the most is peace," Mr Chu said. "I feel right now at this stage instead of talking about the long-term goal for the next generation, it is better for us to create a more peaceful and more cooperative environment."