Dr. Tsai Ing-wen, the chairwoman  of the Democratic Progressive Party (DPP), has won the Taiwanese presidential elections by a landslide of 56 percent, leaving the Nationalist party Kuomintang’s (KMT) candidate Eric Chu 26 points behind at 30 percent.

She is the first female President ever elected in the history of Taiwan, and is by now, the most powerful woman in the Chinese-speaking world.

Tsai iIng-wen is a 59 year old academic-turned-politician, educated at Cornell University and the London School of Economics. Her wonkish image was tempered by a very well organised campaign, portraying her as a caring but authoritative figure, able to stand up to Beijing while posing with her two cats Think Think and Ah-Tsai.

The KMT leader and presidential candidate Eric Chou has conceded defeat. He told a crowd gathered outside the party’s headquarters in Taipei: “ I’m sorry… We’ve lost. The KMT has suffered an election defeat. We haven’t worked hard enough and we failed voters’ expectations.” He has assumed “the highest level of responsibility” and declared his resignation as party chief.

The election of a pro-Independence president radically shifts the KMT’s policy of rapprochement with Beijing, guided by the “three noes” principle: no unification, no independence, no use of force. The KMT previously oversaw the 1992 Consensus on the “One China Principle” which stipulates that both the mainland and Taiwan belong to the same ‘China’, but the two sides agree to interpret the meaning of that one China according to their own definition.

Tsai has promised that she will maintain the status-quo of de-facto independence for Taiwan, however in sharp contrast from the KMT, she has refused to endorse the principle that Taiwan and China are parts of a single nation to be unified eventually.

Instead of focusing on the relations with China, Tsai has pledged to concentrate her energies on domestic reforms aimed at revitalising the sluggish Taiwanese economy. Tsai has promised to set up five industrial and innovation centres, and to boost tourism in the small island of 23 million inhabitants. Her party also plans to incentivise Taiwanese firms currently operating in China to relocate back home.

The DPP is also on course of returning the highest number of members to the National Legislature, the first electoral defeat of the ruling KMT since Taiwan opened up the political system to multi-party elections in 1987.

Tsai’s election is not welcome in Beijing, which views Taiwan as an integral part of China’s territory that it is to be taken by force if necessary. Recently the Chinese President Xi-Jinping has said ‘The earth will move and mountains will shake if Taiwan gets independence’.

On the other side of the Pacific, President Obama will be watching carefully as an escalation of the cross-strait relations is the last thing he needs on his plate during his last year in office. Last week, the White House deputy National Security Advisor, Ben Rhodes, called for China and Taiwan to avoid an escalation of tension.

However fears and expectations of Beijing-Taipei tensions are overblown. The atmosphere of rapprochement is likely to remain in place due to overlapping interests of Tsai and Xi-Jinping. The recently elected Tsai has made it clear that her focus will be domestic reforms and she will have to deliver economic stability if she wants to be a serious contender for re-election in 2020. Equally the Chinese President Xi-Jinping would not want to end his term by undoing all the work of the past eight years, which have brought the two Chinese countries to a balanced detente.

Tensions are also high in the South China Sea, with the United States and Vietnam and other states.

A leaked US diplomatic cable from 2006 described Tsai as “a tenacious negotiator”, a “savvy insider with impressive economic experience” and as being “extremely capable and very persuasive. It remains to be seen whether the new Taiwanese President will become an Angela Merkel of the East, or whether the hostility of the bigger neighbour will undermine her grand designs for the small island-state.

China’s state-media reacted, saying: Taiwan should abandon its “hallucinations” about pushing for independence as any moves towards it would be a “poison”. The Chinese Cabinet’s body for handling Taiwanese affairs reaffirmed its opposition to independence in Taiwan, but said it would work “to maintain peace and stability between the two sides of the Taiwan Strait.” “Our will is as strong as a rock, our attitude unswerving on the principal matter of safeguarding national sovereignty and territorial integrity,” the Taiwan Affairs Office said.