TAIPEI -- With Taiwan's economic growth in negative territory for three straight quarters and exports suffering a worse slump than during the global financial crisis, people's livelihoods will be the most pressing issue for President-elect Tsai Ing-wen when she takes office on Friday.

As a relative calm settles in cross-strait relations, Taiwan's population of 23 million does not seem to be overly concerned about possible changes in bilateral exchanges, as long as Beijing does not wield undue influence over the local economy and politics. Tsai's Democratic Progressive Party government is pro-independence whereas the previous administration under Ma Ying-jeou and his Kuomintang strove hard to maintain cross-strait ties.

A close aide to Tsai told the Nikkei Asian Review that the incoming president would devote the better part of her inaugural speech on Friday to domestic and economic issues rather than cross-strait relations. She would, nonetheless, highlight her determination to keep her China policy predictable and maintain peace and stability across the Taiwan Strait, the aide said.

"The Taiwanese public now care the most about whether the government can do something practical to improve their lives, while Taiwanese people have become more and more converged in their national identity as time and democratization evolves," the aide said.

Tsai wants to continue existing exchanges with the mainland, but DPP's ultimate wish to maintain Taiwan's sovereignty does not sit well with Chinese officials. Also, Tsai's refusal to bow to Beijing's demands to recognize the highly controversial "1992 Consensus," a directive that China sees as Taiwan's commitment to eventual unification, has led to concerns that the two governments may clash over the issue later on.

Since her election on January 16, there have been some friction in the Taiwan Strait, but so far any discord has been minimal.

One notable incident involved Kenya and Malaysia deporting Taiwanese individuals suspected of committing phone scams against Chinese citizens to China. Taipei protested against this, but to no avail. Beijing has also insisted that Taiwan participate in the World Health Assembly on May 23-28, the decision-making body of the World Health Organization, as part of China.

Earlier this week, the Chinese military released a film showing an exercise reportedly held at the country's southwestern coast. Local media speculated that the drill was targeted at Taiwan. China had never ruled out the use of force as a possible means to annex Taiwan even though the two sides split following a civil war in 1949.

Small doses of discomfort

Still, these episodes are mild compared with the palpable tensions felt during the second term of former DPP President Chen Shui-bian in the mid-2000s when the Taiwanese demagogue often incensed Beijing with his anti-China, pro-independence rhetoric.

Tsai, too, is helped by warming relations between Taiwan and the U.S., the island's most important strategic partner and sole weapons provider, although policies could change when a new American president is elected later this year.

U.S. President Barack Obama has been focusing on Asia under his rebalancing policy in reaction to China's assertion of control over disputed waters in the South China Sea. Last year, the Obama administration sent a senior diplomat to assume the duties of the director of the American Institute in Taiwan, the de facto U.S. embassy on the island, to bolster ties with Taipei.

AIT Director Kin Moy is the deputy assistant secretary of state for East Asian and Pacific Affairs in the U.S. administration and he served as a senior assistant to Hillary Clinton during her time as secretary of state.

While the good news is that there is no imminent geopolitical crisis, the bad news is that there is no foreseeable remedy to Taiwan's deteriorating economy, which is not helped by China's slowdown.

Taiwan's trade-reliant economy has been contracting since the third quarter of 2015. In April, exports suffered a year-on-year drop for the 15th consecutive month, the longest slump ever. Furthermore, the total revenue of all listed companies in Taiwan fell 5% in the first four months of this year to 8.51 trillion New Taiwan dollars ($259.6 billion) from the same period in 2015.

Some economic advisers within the DPP think that Taiwan's gross domestic product will fall in 2016 from 2015, and there are also views within the party that the economy will not improve much under Tsai's four-year term.

"How to help Taiwan's economy take off again will be Tsai's biggest challenge," said Norman Yin, an academic at the prestigious National Chengchi University Department of Money and Banking.

Yin said that Taiwan has an unhealthy dependence on China, given that 40% of its exports go to the mainland. China's fast-rising tech supply chain has also grown to become a significant threat to its Taiwanese rivals.

"It is not easy for Taiwan to grow other markets in a short time, and it is very likely that over the next two years Taiwan's economy will hit rock-bottom," Yin warned.

The academic said that Tsai would need to figure out how to reach compromises with Beijing so that Taiwan could forge free trade agreements with neighboring countries. The new leader would also have to loosen regulatory restrictions so that the island can attract more foreign investments and pursue next-generation growth drivers such as financial technology, Yin said.