Taiwan held its first combined national elections on 14 January 2012. Though the Democratic Progressive Party (DPP), the largest opposition party, fared much better in the Legislative Yuan elections than it did in 2008, DPP presidential contender Tsai Ying-wen’s (Cai Yingwen) clear defeat at the hands of the Kuomintang (KMT, Guomindang) incumbent, Ma Ying-jeou (Ma Yingjiu), in the presidential race came as a surprise. The article examines the election campaigns of both Tsai and Ma, summarizes the election results, and analyses the reasons why the DPP failed to retake the presidency. It then discusses the post-election debate within the DPP on the future of its China policy and ponders what can be expected from the second Ma administration.