'In 1995, I was reading a newspaper in a French high-speed train and saw that Taiwan had moved up in the IMD [World Competitiveness Yearbook] rankings from 18th to 11th, which made me very happy. It allowed me to dream at the time that within five years, Taiwan could catch up with Spain, and within eight years we could catch up with Italy. ?K Instead, to my surprise, South Korea has actually caught up with us. If we're willing to accept that, then what aren't we willing to accept?

Those are the words of Kuomintang presidential candidate Ma Ying-jeou, who couldn't stop the corners of his eyes from misting up as he spoke. He vowed that if elected, he would strive to recover the competitiveness Taiwan has lost over the past eight years under a Democratic Progressive Party administration.

From being indicted over his use of a special allowance as Taipei mayor and facing accusations that he has a 'green card,' or U.S. permanent residency status, to getting closer to the real face of Taiwan for the first time at the age of 57 by picking scallions at the home of a scallion farmer or helping duck farmers pack duck eggs, he's been taking some remedial courses in developing street smarts and seems to increasingly understand how to express himself.

People are thirsting for a way out of the status quo of political decay. Is Ma prepared to lead Taiwan? And what kind of vision and commitments is he able to offer voters?

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Q: During the campaign, you have said, 'Give me eight years, and I'll give you a century of prosperity.' But this is a rather abstract idea. In a word, what kind of feeling do you want to bring Taiwan?

A: 'Happiness' is a vague concept. [Note: 'Happiness' is DPP candidate Frank Hsieh's campaign theme.] Every person's standard of 'happiness' is different. I think that there shouldn't only be a sense of 'happiness.' When it comes to the economy, you need the economy to be vibrant. In politics, there must be transparency and the elimination of corruption; we need sunshine politics. We should also push for a harmonious society, peaceful relations with China, a sustainable environment and a creative culture.

I want to especially emphasize the two P's ?V peace and prosperity ?V turning the Taiwan Strait into a peaceful and prosperous avenue rather than a venue for armed conflict. The Taiwan Strait should no longer be seen on the world map as a potential flashpoint.

Q: Do you think these goals are within our control?

A: To a certain degree, yes. Opening up direct transportation links, for example. People ask me if the mainland will oppose Taiwan. If the mainland opposes the idea, then of course there is nothing to talk about. But in fact, why would China be opposed? It won't be opposed ?V it will support the idea.

Q: If China wants you to accept a deal with political conditions, what will you do?

A: We support the 'one China' policy, which is to recognize that the one China is the Republic of China. This was the concept of the '1992 Consensus' ?V one China with different interpretations. This would be the foundation for us and the other side to resume consultations, and it's something that the DPP is not willing to do.

Q: When you unveiled your timetable, for example saying that you would open direct air links within a year of taking office, it was like opening a public tender. If everybody already knows your reserve price, or bottom line, what chips do you have left to negotiate with?

A: When you open a public tender, the bidders are all aware of your budget. But that's not the reserve price ?V it's the budget. What we're talking about now is the timeline that we've budgeted, where we hope to clinch an agreement within a year. But in fact you have to look at the actual progress of the talks to know how long it will take to reach an agreement.

Maybe during the process some unanticipated things happen, which is of course a possibility. But you can't not set a timetable just because of that ?V what kind of policy would that be? We know that China wants to open up air links. The KMT has had many exchanges with them over the past two years, and direct air links is something that they originally suggested. It was the DPP that could not accept the concept of one China with different interpretations. The mainland and the United States are both very much able to accept my proposal of 'no unification, no independence, no use of force' during my term in office. I support the Republic of China, but I will not discuss unification.

Q: An ideal country is realized with the help of government policies. Based on the policies you've espoused, you seem to have a 'big government' concept. With government efficiency being what it is at this point, can it carry through your ideals?

A: No matter how big the government gets, it cannot be bigger than the people. Over the past eight years, the government has been seriously negligent in many areas and did not adequately play its necessary role.

So first, we want to stabilize politics and not create an agenda that not only has no substance but also can be divisive. Second is the problem of unstable government, where ministers are frequently replaced. The result of constant change is that Cabinet members think they'll only be in office for a short time and find it hard to do their jobs well. We want to eliminate this phenomenon. Third is the problem of indecisive policies that are often reversed, including building the fourth nuclear power plant, and opening direct flights between the two sides of the Taiwan Strait.

You just mentioned 'big government.' In the area of education, for example, the government failed to do many of the things it needed to do, so we are promoting the policy of extending nine-year compulsory education by another year, to kindergarten. Also, because of the long-term neglect of technical and vocational education, we only know how to establish technology universities, but our technical talent pool is shrinking, leading to a severe shortage of workers in conventional industries. This must be improved.

Q: Returning to cross-strait policy, let's look at the economy. We have discovered that Taiwanese companies based in China are gradually becoming localized ?V their entire business processes are increasingly located in China. Are you not at least a little worried that the economic interests of Taiwanese businesses in China and those of Taiwan are growing increasingly apart?

A: The goal of cross-straight direct flights and other cross-strait policies is to try and win back the hearts of Taiwanese businesspeople based there, rather than have them hate the government.

How do you win back their hearts? First, make it more convenient for them to come and go freely. Second, encourage the financial sector to establish a presence in China, enabling our financial sector to take care of the Taiwanese businesses there, so they can deal with banks that they've been familiar with for years. Third, we should relax restrictions on investment in the mainland. The idea is not to encourage people to go, but to encourage them to return. By allowing people to come and go freely, they will be more willing to come back, and we hope that after they've made money, instead of going to Hong Kong to list publicly, they'll return to Taiwan.

Q: How can you guarantee that? There could be other scenarios. For example if Taiwan doesn't upgrade, China-based Taiwanese businesses might not choose Taiwan.

A: I realize that, but at least they have another option. A lot of Taiwanese investment is returning because it has run into problems on the mainland. I would tell them it's good that they've returned, but I would remind them that they need to quickly follow a road of innovation, or else they won't have good times for long.

When local companies first went to China, many were in labor-intensive industries, but China's economic development has already evolved beyond that stage. So Taiwan-invested companies there are beginning to relocate to Vietnam, Indonesia, and even India. Over the long-term, they have no choice but to travel the road of innovation.

Q: What do you believe was the key to Taiwan's success in the past, and will that kind of opportunity return?

A: I think that when Taiwan historically was successful, it was open, and when it failed, it was closed and not pragmatic. This is the lesson of history. This is obvious. For example, Zheng Chenggong successfully resisted the Qing Dynasty for 20 years with just a few people by relying on international trade and accumulating international wealth. What kind of abilities does that require? One is knowledge, one is experience. The two complement each other.

Q: What about the caps on local companies investing in China?

A: We have only proposed loosening the caps in principle. The details would come after I've taken office, but at the very least, if a company's headquarters is in Taiwan, there would not be any restrictions. Otherwise, we will do our best to ease restrictions.

Q: Taiwan already accounts for 70 percent of the foreign investment in China. Would you encourage China-based Taiwanese businesses to go to other places to invest?

A: Taiwanese businesses in China are already beginning to move to Vietnam, Indonesia, and even India. In the future, investment will be even more dispersed rather than being concentrated in the mainland. As for regions, the Asia-Pacific is the priority consideration. After I visited India, I felt it was an investment paradise, because it was strong in services but weak in infrastructure, with basic construction lagging behind. We want to strengthen Taiwan, integrate the Asia-Pacific region, and gain footholds around the world.

Q: When any new government comes to power, it should have a clear idea of how it will be positioned. How would you position your administration?

A: The KMT for a long time has been a center-right party; what is relatively special is our stance on the even distribution of wealth. We don't want to completely obliterate profitable or creative entities, but use tax policies to even out wealth. That has always been our strategy.

Many years ago, when I just returned from the United States and was working at the Office of the President, I asked some of my superiors how they would describe our economy. They called it a free economy with major economic planning ?V fundamentally free but with some planning. It was not a planned economy [as in communist states] and not a completely free Keynesian economy like the United States [without any industrial policy].

Taiwan has some policies that nurture certain industries, so we have a Council for Economic Planning and Development. We will continue to follow this path in the future.

Q: Taiwan is increasingly turning into an 'M' shaped society (where income distribution is growing more polarized and the middle class is in decline). How will you achieve a more even distribution of wealth?

A: The spirit of [Republic of China founder Sun Yat-sen's] Three Principles of the People is equitable wealth distribution, but there are different approaches that can be used to achieve it. The precondition is that it must be equitable distribution of wealth, not equitable distribution of poverty. The income gap in Taiwan has grown wider in recent years, so I hope in my first four years in office to narrow the gap so that the average income of the top 20 percent of income-earning households is less than six times that of the bottom 20 percent.

Q: The government runs considerable deficits and yet has no concrete plan to raise taxes. You've written a lot of checks in the campaign. Could they bounce?

A: If the government can loosen restrictions, foreign capital will come in. If we open direct flights with China and allow in Chinese tourists, then domestic and private investment will rise significantly. The government has to provide a good platform that makes the private sector willing to invest. There are policies that don't cost anything but still pay big dividends. I believe that government finances won't be much of a problem.

Q: At present, the average tax rate most people pay is 13 percent, with the majority of taxes coming from the salaried class. Are you satisfied with these numbers?

A: We will consider tax fairness, so after I take office I will set up a tax reform committee. We have not yet considered increasing consumption taxes. We want to wait until after taking office to thoroughly review the matter, including inheritance taxes, personal income taxes and corporate income taxes. It would not be appropriate to throw numbers around during an election campaign.

Q: A campaign is a very big test for political figures. What have you learned?

A: Everybody says our crisis management is poor. Well, to this point in time, I haven't said anything that's untrue. If we look at the situation today, what kind of national leader do the people hope for? You can't allow a devious person to become president ?V that's what people in the countryside say.

What the people hope to see is somebody they can rely on. If a candidate has foreign citizenship, then there is really an issue of loyalty, but I don't [have foreign citizenship]. I know my opponent will pound on this issue. And who's to say? Maybe a week before the election somebody will come up with an American passport with the name Ma Ying-jeou written on it. Don't think it couldn't happen.

Q: What is the most important trait for a leader and why? What are your strengths, and what do you lack?

A: Let's consider that from two angles: talent and virtue. First, virtue: A leader should be upright, honest, and free from corruption, because we've seen that no matter how talented people are, if they are corrupt and not upstanding, their talent is of no use. Second, talent: One should have vision and creativity, and also a strategy, passion and the ability to execute ideas.

I discovered something new recently. Last October when I was in Japan, I often saw the character zong from the [two-character] word for president, zong tong. The right half of the [Japanese version of the] character has the symbol for 'public' on the top and the symbol for 'heart' on the bottom. Having a 'public heart' means you cannot have a private heart. I thought about that for a long while, and it made me feel inspired. That may have been the way people thought thousands of years ago. It makes sense.

You asked me about what I lack. I don't think I'm lacking for anything, because I'm constantly learning and reflecting on my actions and behavior.

Translated from the Chinese by Luke Sabatier

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Chinese Version: 馬英九：領導人最重要的是才與德