With all votes counted, the Central Election Commission said, Ma, of the ruling Kuomintang Party, had 51.6 percent to 45.6 percent for challenger Tsai Ing-wen of the Democratic Progressive Party and 2.8 percent for James Soong of the People First Party, CNN reported.
Ma vastly improved relations with China in the eight years of his first term, during which the two countries have forged economic and trade agreements. During his presidency, regular direct flights began between Taiwan and China and a trade pact reduced tariffs on Taiwanese exports to the mainland, while tourism has proved a boon to the local economy.
Tsai had criticized Ma's handling of the economy and played to voters' concerns the president's conciliatory approach in dealing with China was reducing the island's sovereignty.
U.S. President Barack Obama congratulated Ma on his victory, saying, "Taiwan has proven to be one of the great success stories in Asia."
Beijing had no immediate comment on the victory but Communist Party officials have expressed disapproval for Tsai and her DPP party, which seeks political independence from China.
"What this election showed is that business interests in Taiwan now trump ideology ones," Edward I-hsin Chen, a political scientist at Tamkang University in Taipei, told The New York Times. "There is no turning back on relations with China."