Once bitten, China to temper remarks on Taiwan vote
* China learns lesson, forgoes warnings and war games
* China prepared for win by either party-sources
* Whoever wins will deal with more confident China, new leader
BEIJING, Jan 10 (Reuters) - China has forgone blustery warnings and war games in the run-up to Taiwan's presidential election this weekend, and will likely take a measured response even if the independence-leaning opposition unseats friendlier incumbent Ma Ying-jeou.
It is no secret that Beijing prefers another four years for the Nationalist Party's Ma, who has pursued closer economic ties since he was elected in 2008, over Tsai Ing-wen of the island's main opposition Democratic Progressive Party (DPP).
But China has avoided rhetoric or military manoeuvres ahead of the latest election after previous attempts to influence the outcome backfired spectacularly.
"We are prepared for either scenario. There won't be a big difference whoever wins," a source familiar with China's policy towards Taiwan told Reuters, requesting anonymity to avoid political repercussions.
"If Tsai Ing-wen wins, the mainland will 'listen to her words and watch her deeds' in the beginning," a second source with ties to the top Chinese leadership said, also asking not to be identified.
Taiwan opinion polls show Ma has a narrow edge over Tsai.
The race is rich in historical irony given Ma's party, also known as the Kuomintang (KMT), lost the Chinese civil war to the Communists in 1949 and fled to the island.
Beijing regards Taiwan as sovereign territory that must eventually return to the fold, by force if necessary.
But China and Taiwan managed tense relations during the tenure of DPP president Chen Shui-bian who used provocative pro-independence rhetoric that angered China in the 2000s, while Ma has boosted financial and economic ties through a landmark trade pact while in office.
Beijing ousted Taipei from the United Nations in 1971 and for years courted allies to switch recognition. With Ma in office, China has stopped this diplomatic poaching and Taiwan's allies now stand at 23.
Both sources declined to speculate if China would resume the diplomatic tug-of-war if Tsai eked out a victory.
In 1996, China fired missiles into waters off Taiwan ahead of the island's first direct presidential election and Chinese media tarred incumbent Lee Teng-hui as "a schemer who should be swept onto the rubbish heap of history."
Lee won by a landslide.
Four years later, China's then premier Zhu Rongji, wagging his finger in a televised news conference, warned the island's voters against electing the DPP's Chen Shui-bian, saying Chinese were ready to "shed blood" to prevent Taiwan breaking away and the island would "not get another opportunity to regret."
Unbowed, Taiwan voters handed Chen a narrow victory.
In the latest contest, China's leaders have collectively held their tongues.
In his New Year speech aired live on state television, Chinese President Hu Jintao pledged to "continue promoting peaceful development of cross-Strait relations."
Hu and other Chinese leaders have not a preferred candidate. Similarly, the ministerial-level Taiwan Affairs Office, which implements policy towards the island, has tiptoed around sensitive questions about the election.
Still, Beijing is not taking any chances. Chinese and Taiwan airlines have offered the estimated one million Taiwanese working or living in China discounted plane tickets home in the first half of this month to vote.
That slice of the electorate mainly favours Ma, who will push for further economic integration.
Ma has declared there will be "no unification, no independence and no war" with China during his watch, while Tsai has also offered olive branches to China and signalled a willingness to negotiate. She has pledged not to scrap the trade agreement inked by Ma.
In theory, a Tsai victory could mean renewed tensions across the Taiwan Strait, pushing the island further into diplomatic isolation and slowing its economy down. But a more confident China just may decide to respond to her peace overtures.
The United States, Taiwan's main arms supplier, also is closely watching the contest, where a win by Tsai could heighten discord between Washington and Beijing, adding to disputes over trade and currency and a new U.S. military strategy in the Asia-Pacific.
"The United States would like to see the status quo -- Taiwan neither moving too close, too fast to the mainland nor towards independence," said Lin Chong-Pin, a professor of the graduate institute of international affairs and strategic studies at Taiwan's private Tamkang University.
Beijing also would hope to avoid renewed tensions over Taiwan, particularly with a critical leadership transition set to begin late this year.
China's President Hu, who considers forging detente with Taiwan as a proud part of his legacy, is due to step down as Communist Party chief this year and as president next year as part of the leadership reshuffle.
Under Hu and Ma, the two sides opened direct air links and bilateral trade and investment has soared. Hu exempted imported Taiwan fruit from duties and allowed three million Chinese tourists to visit the island.
Hu's anointed successor, Vice-President Xi Jinping, is familiar with the Taiwan issue having spent 17 years in the southeastern province of Fujian facing Taiwan. A Tsai victory could push Taiwan to the top of the agenda for Xi's visit to the United States due in February.
Even for hawks in the People's Liberation Army (PLA), a Tsai win would not necessarily be bad news.
"The PLA may have a renewed argument for a bigger budget, but it is unlikely to upstage the country's civilian leaders," said Lin, a former Taiwan deputy defence minister and vice-chairman of the policy-making Mainland Affairs Council.
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