By Jonathan Standing and James Pomfret
TAIPEI (Reuters) - Taiwan President Ma Ying-jeou, fresh off an election victory in 2008, offered a vision of prosperity through closer ties with China: the economy would grow 6 percent per year, per capita income would reach $30,000 and unemployment would be 3 percent.
Four years on and in a heated re-election campaign for the January 2012 presidential poll, voters are hearing a starkly different message, and tone, from the man who dramatically opened Taiwan's economy to political rival China and brought relations to their best in six decades: He needs more time.
"There are goals we failed to achieve, such as the unemployment rate. I apologies for failing to achieve the goal and I understand that public frustration will be reflected in my approval rating," Ma told a television audience in October. "However, we managed to revitalize the economy amid the global financial crisis ... give me four more years and I will do better."
To be sure, the Nationalist Party candidate's ambitious forecasts came before the collapse of Lehman Brothers and the ensuing global financial crisis severely squeezed export-led economies such as Taiwan in 2008 and 2009.
Nonetheless, Ma's apology, repeated again at a live television debate in December, has given the main challenger, Tsai Ing-wen, who heads the opposition Democratic Progressive Party, an opening to attack his record on the campaign trail and put Ma on the back foot.
It has also cast a spotlight on his mixed economic legacy.
Taiwan's GDP grew 10.8 percent in 2010 in a recovery from the crisis-induced 1.9 percent contraction in 2009 and the government has forecast 4.5 percent growth this year. However, per capita income hovers around $20,000 and unemployment has remained stubbornly above 4 percent all year.
Other measures show an increasing wealth gap, an area where Ma has come under heavy attack from the DPP, which lags Ma's Nationalists by only a few percentage points in opinion polls.
Government figures show the number of families living below the poverty line increased by 10,000 to 114,000 in less than two years from mid-2009 to the second quarter of 2011. Average house prices meanwhile remain at 9.2 times annual household income, making housing unaffordable for many.
In a report last month, a poll commissioned by brokerage CLSA showed that only 8 percent found that their personal and family economic situation was either much better or better in the last two to three years, with 53.5 percent saying it was about the same and 19.5 percent saying it was worse.
Grumbling about the economy has been common throughout the electorate. Young new voters complain about a lack of jobs and poor wages and older voters are feeling the pinch as well.
"Before, even though work was hard but we didn't have any livelihood pressures," said a 64-year-old scrap metal seller in the southern Taiwan township of Changjhih, who would only give his surname, Liu. "Nowadays, not only to do we have tough jobs, our life burden is also very heavy ... these past two to three years I feel things are a lot worse."
Others see the economic integration with China mostly benefiting big businesses like Taiwan's technology companies, who have poured millions into plants across China to make everything from flat panel screens to iPads.
"Smaller businesses like us can't increase our income because of China," said Shih Hsi-liang, a business owner in the central city of Taichung, whose firm does interior design and woodcrafts in local workshops and factories. "We're too small and don't have the means to touch this larger market, they won't come to look for us."
To be sure, there has been clear progress from Ma's initiatives.
The controlled opening of the economy has boosted trade and investment, increasing the number of direct flights between the island and mainland from virtually nil to 100 per day and bringing more than 2 million Chinese tourists to Taiwan who have spent more than $3 billion.
China has become Taiwan's top trading partner, taking 28 percent of its exports so far this year compared with 12 percent for the United States. Bilateral trade between China and Taiwan totaled $145.37 billion in 2010, up 36.9 percent from 2009.
Officially reported and approved Taiwan investment in the mainland has totaled $39.3 billion during Ma's four-year tenure since 2008, almost two-thirds of the total $58.3 billion in the 16 years prior to his term in office.
Fledgling Chinese investment in Taiwan is trickling in too, totaling $170.1 million from when it was first allowed in June 2009 until October 2011, according to Taiwan's economics ministry.
Ma's policy of economic engagement with China reached a zenith in a groundbreaking 2010 trade pact called the Economic Cooperation Framework Agreement that slashed hundreds of tariffs on Taiwan exports to the mainland and paved the way for more talks on economic integration.
"It's a good direction and a right direction ... at least he (Ma) has settled cross-strait relations and enhanced Taiwan's international value," said Bert Lim, president of Taipei-based economic policy think-tank The World Economics Society.
That agreement had helped give an edge to goods "Made in Taiwan" over those "Made in China" both in China and internationally, said Lim, an economist who also sits on government policy advisory panels.
"That's Ma's biggest achievement. Now what he has to do is let the people feel that value."
Another aspect of Ma's legacy remains a sensitive issue for many voters: how long will China, which has a stated policy of reclaiming Taiwan, by force if necessary, continue its largesse.
China's growing economic clout has become an increasingly important means for it to exert influence over Taiwan. Beijing views Tsai with suspicion and warned that progress will halt if the opposition, which leans towards a more independent Taiwan, wins the election.
There will eventually be a limit for the preferential policies with which China can entice Taiwan, according to Zheng Zhenqing, assistant professor at Tsinghua University's Institute of Taiwan Studies, suggesting Beijing would start to tire if Taipei did not in some way reciprocate.
"It needs to work both ways," Zheng said. "China cannot go on giving out preferential policies for Taiwan forever. People at home will start to get angry."
(Additional reporting by Ben Blanchard in Beijing, Editing by Brian Rhoads and Chris Lewis)