South Carolina Gov. Nikki Haley (R) will kick off her reelection campaign later this month with the help of some of the biggest names in the Republican Party.

South Carolina Gov. Nikki  Haley (R). (J. Scott Applewhite/AP)

To hear Democrats tell it, she's going to need it. Republicans, meanwhile, aren't outwardly concerned about her chances. "I'm confident she will win a by a bigger margin than 2010," predicted Jon Lerner, a top Haley strategist.

So, who's right? The state of play appears to be somewhere in between.

Haley's polling numbers are not pristine. An April Winthrop University survey showed her approval rating stood at 44 percent, with 37 percent disapproving. That's hardly panic territory, but it doesn't mean she is on cruise control, either. And Haley's numbers were underwater in a March poll from Democratic automated pollster Public Policy Polling.

The state's economic standing is ripe for Democratic attacks. South Carolina ranked 37th in unemployment in June. Throw in a cyber-attack against the state that exposed taxpayers' personal data -- Haley admitted the state should have done a better job preventing it -- an education record Democrats want to run against, and the willingness of state Sen. Vincent Sheheen (D) to run a second race, and the Democratic case looks pretty convincing.

"Haley has proven to be in over her head when it comes to the fundamentals of running government and the state is ready to get back on track– that's why Vincent Sheheen will be South Carolina's next governor," said Danny Kanner, a spokesman for the Democratic Governors Association.

But that's only part of the story.

The other part is that South Carolina's economy is actually improving. In May, the jobless rate reached its lowest point since 2008. The more time that passes since the hacking incident, the less potency it stands to have. And Sheheen's support for expanding Medicaid under Obamacare will cost him in the conservative state, Republicans say.

Plus, Haley is well-funded, and will continue to fill her campaign coffers at a quick pace. Sheheen has put up impressive fundraising numbers so far, but Haley's head start means he has a lot of ground to make up. The fact that Wisconsin Gov. Scott Walker (R), Louisiana Gov. Bobby Jindal (R) and Texas Gov. Rick Perry (R) will be at her Aug. 26 kickoff events suggests she will be able to tap the national money pipeline again and again.

The natural tilt of the state gives Haley an advantage, too. Haley's 2010 race against Sheheen was pretty competitive, even in a GOP wave year. But the the state remains a bright red, which is a challenge for Sheheen.

When states that lean heavily toward one party fall to the opposing party in governor's races (think Chris Christie defeating Jon Corzine in 2009), it's typically because the dominant party's candidates is very, very unpopular. Haley simply hasn't reached that stage yet. But Democrats are hoping to argue against her record in the coming months in  hopes of changing that picture.

"It will be a real race in the sense that since the Democrats have really nothing going on in the two U.S. Senate races or in any of the House races, they are going to go all out in their effort in the governor's race," Lerner said.

In-state attention is not the only kind this race is sure to get. There are national stakes here, too. Haley is the state's first woman governor and one of two Indian-American governors nationwide. She brings diversity to the GOP that Republican leaders do not want to lose. So it's not difficult to see why big-time GOP figures are heading to South Carolina to help her.

And for Democrats, it's an opportunity to make a pickup in a deeply Republican state, which would be a big-time gain for the party. What's more, Democrats would be unseating one of the biggest stars of the 2010 GOP wave elections. Maryland Gov. Martin O'Malley (D), among others, has already been to the Palmetto State to support Sheheen.

The bottom line is this: South Carolina is a contest worth watching, because of the high stakes both in and outside the state. And while the race could move in either direction as we head toward 2014, right now, Haley could lose, but just about everything would need to go right for Democrats.