Although Ma Ying-jeou was re-elected to a second presidential term, he received far fewer votes than in 2008 and the KMT's majority in the Legislative Yuan shrank substantially. As a result, Ma and his KMT will face greater challenges from opposition parties in the governing process. At the same time, the Ma government's cross-Strait policy will be impacted by Mainland China, the United States and the business community. Each of these actors has different attitudes and interests and Ma's second administration will have to strike a balance between these forces. This article explores the challenges faced by Ma Ying-jeou's new government and potential policy options while attempting to identify future trends in cross-Strait relations.