Nationalist, or Kuomintang (KMT), candidate Ma Ying-jeou won 58 percent of the vote, while the ruling Democratic Progressive Party’s candidate Frank Hsieh got 42 percent.
“This is not a victory for us and not a victory for the Nationalists,” Ma told thousands of cheering supporters in downtown Taipei as firecrackers added to the volume on city streets.
“The people of Taiwan hope for clean government, with no corruption. Taiwan people hope for a flourishing economy. The people of Taiwan hope for peace across the straits, they don't want war.”
Party supporters let off firecrackers and fireworks, while DPP supporters, who could not believe their loss, shed tears.
Hsieh admitted defeat and congratulated Ma. “I am deeply sorry. This is my personal defeat, not Taiwan’s defeat, so don’t be sad,” he said.
Saturday’s win comes after the Nationalists, who once ruled all of China, clinched a more than two-thirds majority in the legislative elections in January, giving them a clear mandate to push ahead with their policies.
Ma favours closer economic ties and political dialogue with China, which has never renounced the use of force to bring the island under its control.
For or against China
Voters had to choose a successor to President Chen Shui-bian, an anti-China firebrand who steps down in May and who has repeatedly angered Beijing with his pro-independence rhetoric. China has claimed Taiwan as its territory since the end of the Chinese civil war in 1949. Hsieh’s DPP favours formal independence while Ma’s Nationalist Party wants eventual reunification once China embraces democracy.
The election has drawn keen international attention, with the US, Russia and the UK criticising a referendum on UN membership, which was held alongside the vote.
No UN membership
UN membership is out of the question anyway with just 23 countries recognising Taiwan, and with China a veto-wielding permanent member of the UN Security Council. The US switched diplomatic recognition from Taiwan to China in 1979, under a “one China” policy, but remains Taiwan’s main arms supplier. 
Two US aircraft carriers are in the region for training exercises. China fired missiles into the Taiwan Strait in 1996, trying to intimidate voters during an election, but has kept a fairly low profile in the current race due to the riots in Tibet.