Taiwan's Political Status: Historical Background and Ongoing Implications

CRS Report for Congress
Taiwan’s Political Status: Historical
Background and Ongoing Implications
Kerry Dumbaugh
Specialist in Asian Affairs
Foreign Affairs, Defense, and Trade Division
Summary
In 1979, official U.S. relations with Taiwan (the Republic of China) became a
casualty of the American decision to recognize the communist government of the
People’s Republic of China (PRC) as China’s sole legitimate government. Since then,
U.S. unofficial relations with Taiwan have been built on the framework of the Taiwan
Relations Act (P.L. 96-8) and shaped by three U.S.-China communiques. Under these
agreements, the United States maintains its official relations with the PRC while selling
Taiwan military weapons and having extensive economic, political, and security
interests there. But continuing transformations in both the PRC and Taiwan political
systems mean U.S. officials are facing new and more difficult policy choices. This
report, intended as a background overview, briefly summarizes U.S. political history
with Taiwan and discusses the complications it has for current U.S. policy and for
congressional actions. For analysis of current developments in Taiwan and their
implications for U.S. policy, see CRS Issue Brief IB98034, Taiwan: Recent
Developments and U.S. Policy Choices, by Kerry B. Dumbaugh.
From the Mainland to Taiwan
With the victory of Mao Tse-tung and his Communist Party military forces on
mainland China in 1949, the remnants of the government of America’s former World War
II ally, the Republic of China (ROC) led by Generalissimo Chiang Kai-shek, fled to the
island of Taiwan off the south China coast. For the next thirty years, both regimes
claimed legitimacy as the sole legal government of the Chinese people. While on October
1, 1949, in Beijing a victorious Mao proclaimed the creation of the People’s Republic of
China (PRC), Chiang Kai-shek re-established a temporary capital for his government in
Taipei, Taiwan, declaring the ROC still to be the legitimate Chinese government-in-exile
and vowing that he would “retake the mainland” and drive out communist forces.¹

¹ It is crucial to note that at this time and for most of the next 53 years, both the PRC and the
ROC claimed Taiwan as a province of China. Taiwan’s provincial capital remained at Taichung.
Congressional Research Service ˜ The Library of Congress

The United States initially appeared reluctant to support the ROC’s claim of
legitimacy, and there is evidence that President Harry Truman was prepared to abandon
Chiang’s government on Taiwan and deal with Mao’s PRC regime.² But that U.S.
position quickly evaporated with North Korea’s surprise invasion of South Korea on June
25, 1950. Within a week, President Truman ordered U.S. air, naval, and ground forces
to go to South Korea’s aid and ordered the U.S. 7^th fleet to prevent any attack on Taiwan,
saying that “determination of the future status of Formosa [Taiwan] must await the
restoration of security in the Pacific....”³ U.S. support for the ROC was solidified when
Chinese Communist forces entered the Korean War in support of North Korea in October-
November 1950. As a result, in April 1951, the United States resumed direct military
assistance to the ROC government, and in 1954 the United States and Chiang’s
government on Taiwan signed the U.S.-ROC Mutual Defense Treaty, making the two
governments allies once again. This remained the situation for three decades: Taiwan
and China remained officially at war; Washington continued to support the ROC claim
as the legitimate government of all China and refused to recognize the legitimacy of the
PRC; and the United States maintained a defense alliance with the ROC on Taiwan.
Official U.S. Recognition of PRC in 1979
In the 1950s and 1960s, the U.S.-ROC Mutual Defense Treaty allowed U.S. forces
to use Taiwan as a forward base against Sino-Soviet communism in Asia. But after
President Nixon’s diplomatic opening to Beijing in 1971-72 and the major pullback of
U.S. forces in Asia under the guidelines of the “Nixon doctrine,” U.S. officials began to
view Beijing more as a strategic asset against the Soviet Union than as an adversary to be
confronted in the Taiwan Strait.⁴ The Nixon overtures resulted in the so-called “Shanghai
Communique” of 1972 (the first of three U.S.-China communiques) which set the stage
for the reversal of U.S. post-WWII China policy.
Official U.S. recognition of PRC legitimacy did not come until 1979, after the Carter
Administration made a surprise announcement on December 15, 1978, that the United
States would sever official relations with the ROC government on Taiwan and recognize
the communist government in Beijing on January 1 of the new year.⁵ In the Joint

² On January 5, 1950, for example, President Truman announced the United States “would not
provide military aid or advice to [Chiang’s] Chinese forces” on Taiwan. On June 7, 1950,
Secretary of State Dean Acheson said in a news conference that while the United States did not
support transferring Chinese representation in the United Nations to the PRC, it would not use
its U.N. Security Council veto to block a move to do so.
³ “Statement by the President on the Situation in Korea,” June 27, 1950.
[http://www.trumanlibrary.org/publicpapers/viewpapers.php?pid=800] President Truman’s
reference to “Formosa” uses the name by which Taiwan was known under Japanese sovereignty
(China ceded Taiwan’s sovereignty to Japan under the 1895 Treaty of Shimonoseki).
⁴ President Nixon first used the PRC’s formal name in his “State of the World” report to
Congress on Feb. 25, 1971, (Jones, DuPre, ed., China: U.S. Policy Since 1945, Congressional
Quarterly Inc., 1980, pp. 321-322); National Security Advisor Henry Kissinger left for his first,
secret trip to China on July 9, 1971; Nixon made his historic visit to China on February 21, 1972.
⁵ In recognizing the legitimacy of the PRC government, the United States fulfilled 3 conditions
that Beijing had consistently placed on normalization of relations: withdrawal of all U.S. military
(continued...)

Communiqué on Establishing Diplomatic Relations that announced the change, the
United States acknowledged (an important distinction in future debate on the U.S. “one-
China” policy) that both the PRC and ROC governments claimed there was only one
China and that Taiwan was a province of it.⁶ As part of the process of recognizing the
PRC government, U.S. officials also notified the ROC government (Taiwan) that the
United States intended to terminate, effective January 1, 1980, its military obligations
toward Taiwan under the 1954 U.S.-ROC Mutual Defense Treaty. In a unilateral
statement released on December 16, 1978, the United States declared that it “continues
to have an interest in the peaceful resolution of the Taiwan issue and expects that the
Taiwan issue will be settled peacefully by the Chinese themselves.”⁷
The Taiwan Relations Act (P.L. 96-8). While the record shows that Congress^th
at the time (the 96 Congress) clearly concurred with the strategic imperative of
normalizing relations with the PRC, many Members were unhappy with what they saw
as the Carter Administration’s minimal proposals for continued dealings with the ROC
government on Taiwan. In particular, some were concerned that the package of
legislation the White House submitted to Congress to govern future unofficial relations
with Taiwan — the “Taiwan Enabling Act” — did not go far enough in protecting either
Taiwan or U.S. interests. Congressional debate on the legislation in 1979 was extensive
and complicated. The end result was passage of a much amended version of the
Administration’s proposal — the Taiwan Relations Act (TRA — P.L. 96-8) — which
remains the domestic legal authority for conducting unofficial U.S. relations with Taiwan⁸
today. Much of the TRA deals with the logistics of U.S.-Taiwan relations: the
establishment of the American Institute in Taiwan (AIT) as the unofficial U.S.
representative for diplomatic interactions with Taiwan, including details about its staffing,
functions, and funding; and the continued application of existing U.S. laws and treaties⁹
affecting Taiwan after the severing of ties. Of particular relevance for long-term U.S.
policy are Section 2 (b) and Section 3 of the TRA, dealing with U.S. strategic interests in¹⁰
and arms sales commitments to Taiwan.

⁵ (...continued)
forces from Taiwan; severing of diplomatic relations with Taiwan; and termination of the U.S.-
Taiwan defense treaty.
⁶ Widely and over-simply referred to as the “one China policy,” this and other “one-China”-like
statements for decades have been parsed and dissected by each involved government for every
conceivable nuance. The various iterations of “one-China” policy formulations can be found in
CRS Report RL30341, China/Taiwan: Evolution of the ‘One China’ policy — Key statements
from Washington, Beijing, and Taipei, by Shirley Kan.
⁷ Jones, DuPre, ed., p. 342.
⁸ For more detailed discussions of congressional actions at the time, see “Congress and U.S.
policy in Asia: New relationships with China and Taiwan,” in Congress and Foreign Policy —

1979, House Committee on Foreign Affairs, U.S. Government Printing Office, Washington D.C.

1980, pp. 54-71; Wolff, Lester L. And Simon, David L., eds., Legislative History of the Taiwan
Relations Act, American Association for Chinese Studies, Jamaica, New York, 1982; Jones,
DuPre, ed., China: U.S. Policy Since 1945, Congressional Quarterly Inc., 1980.
⁹ See the American Institute in Taiwan (AIT) website at [http://www.ait.org.tw/en/].
¹⁰ See CRS Report 96-246, Taiwan: Texts of the Taiwan Relations Act, the U.S.-China
(continued...)

U.S. Arms Sales Commitments to Taiwan. Although it is a common
American mis-perception that the TRA mandates the United States to defend Taiwan in
case of attack, nothing in the TRA specifically obligates the United States to come to the
defense of Taiwan or to resort to military conflict on Taiwan’s behalf. Section 2 of the
TRA speaks in broad terms about U.S. interests for peaceful resolution to the Taiwan
question, saying that any forceful resolution would be of “grave concern to the United
States,” and further states that U.S. policy is to “maintain the capacity of the United States
to resist...coercion” in addressing the Taiwan issue. Section 3 provides for the sale of
U.S. defense articles and services to Taiwan, but it is non-specific about the nature of
these articles. It merely calls for “such defense articles and services...as may be necessary
to enable Taiwan to maintain a sufficient self-defense capability” and gives Congress a
role in determining what needs Taiwan may have. Much of the U.S. debate on Taiwan
arms sales since the TRA was enacted has involved differing judgments — often between
Congress and the White House — about what should be the capabilities and quantities of¹¹
the “necessary” articles and services provided for in Section 3 of the TRA.
Strategic Ambiguity.After normalization of Sino-U.S. relations and the severing
of the U.S.-ROC military alliance, the PRC was largely satisfied with U.S. “one-China”
formulations alluding to Taiwan’s political status. But upon Congress’ passage of the
TRA, PRC leaders objected strenuously to the act’s provision for continued U.S. arms
sales to Taiwan. After two years of bilateral tensions, a U.S.-PRC joint communique —
the third and final Sino-U.S. communique since Nixon’s opening to China in 1972 —
addressed this point on August 17, 1982. In that communique, the PRC cited it had a
“fundamental policy” of striving for a peaceful solution to the Taiwan question, while
Washington stated that the U.S. did not
seek to carry out a long-term policy of arms sales to Taiwan, that its arms sales to
Taiwan will not exceed, either in qualitative or quantitative terms, the level of those
supplied in recent years since the establishment of diplomatic relations between the
United States and China, and that it intends to reduce gradually its sales of arms to¹²
Taiwan.
The three U.S.-PRC communiques and the 1979 Taiwan Relations Act for decades
served as the framework by which U.S. officials balanced two competing policy
objectives — widely referred to as U.S. “strategic ambiguity” about Taiwan. On the one
hand were three communiques in which U.S. policymakers recognized the legitimacy of
the PRC government, appeared to acknowledge there was only “one China,” and
suggested an eventual ending point to U.S. weapons sales to Taiwan. On the other was

¹⁰ (...continued)
Communiques, and the “Six Assurances,” by Kerry Dumbaugh.
¹¹ CRS Report RL30957, Taiwan: Major U.S. arms sales since 1990, by Shirley Kan.
¹² While the 1982 communique was being negotiated, the Taiwan government presented the
United States with six points it proposed be used as guidelines in conducting U.S.-Taiwan
relations. According to former Ambassador John Holdridge, the United States agreed to these
points — the so-called “six assurances.” The six points included assurances that the United
States would not set a date for termination of arms sales to Taiwan, would not alter the terms of
the Taiwan Relations Act, and would not pressure Taiwan to negotiate with China or act as
mediator between Taiwan and China. See CRS Report 96-246 for text of the “six assurances.”

the TRA in which the United States established a statutory framework for maintaining
extensive unofficial contacts with Taiwan and which committed the United States to
providing weapons for Taiwan’s defense against what most saw as Taiwan’s only
potential enemy — the PRC. “Strategic ambiguity” remained the basis of U.S. Taiwan
policy throughout the 1980s and well into the 1990s, and many observers give it much of
the credit for helping to facilitate U.S.-China relations, preserve U.S.-Taiwan contacts,
and protect Taiwan’s own political and economic interests.
Policy Implications and Issues for Congress
Despite the policy framework of the TRA and the three communiques, Taiwan
continues to be a particularly complex issue for U.S. policy and a recurring issue for
Congress. Some of these complicating factors are old problems arising from the political
compromises that the 1979 normalization process demanded — notably, the “one-China”
formulation, U.S. security interests in and arms sales to Taiwan, and the U.S. position on
Taiwan’s status in key international organizations. Other complications are the result of
changing political trends, particularly in Taiwan, that have placed increasing strains on
the policy framework. These issues crop up periodically in congressional debate today
in ways that send policymakers back to the basic tenets of U.S.-Taiwan-China relations.
One such recurring issue concerns the U.S. position on Taiwan’s membership in
international organizations, such as the World Health Organization and the United
Nations; many claim that the William Clinton Administration’s statement on this issue
in 1998 is a significant misinterpretation of the relevant provision in the TRA.¹³
Another such issue concerns the U.S. “one China” policy formulation. Although the
United States has never repudiated and in fact has continued to restate that commitment,
purists can argue that the U.S. iterations of the “one China” policy over the years have
departed from the original formulation in subtle but significant ways. Despite the 1982
communique in which the United States expressed intent to reduce and eventually end
annual arms sales to Taiwan, such sales not only have continued but in some years have
increased substantially — notably, with the George W. Bush Administration’s April 2001
weapons sale package to Taiwan that included, among other systems, four
decommissioned Kidd-class destroyers, 12 anti-submarine warfare P-3 aircraft, and eight
diesel submarines. This sale was surpassed in size and value only by the 1992 sale of 150
F-16 aircraft to Taiwan by the George H. W. Bush Administration.
Debate also regularly recurs over what the United States should do if the PRC uses
force against Taiwan. Some focus on the lack of any mandate in the TRA for U.S.
military intervention while others state that the TRA bases the entire foundation of U.S.-
PRC official relations on the premise that Taiwan’s future will be resolved peacefully.¹⁴

¹³ In his “three noes” statement of June 30, 1998, President Clinton said “... we don’t believe that
Taiwan should be a member of any organization for which statehood is a requirement.” Others
have challenged this as a misinterpretation of Section 4(d) of the TRA: “Nothing in this Act may
be construed as a basis for supporting the exclusion or expulsion of Taiwan from continued
membership in any international financial institution or any other international organization.”
¹⁴ Section 2(b)(3) of the TRA states that it is U.S. policy “to make clear that the United States
decision to establish diplomatic relations with the [PRC] rests upon the expectation that the
(continued...)

Many believe that the potential for U.S. military conflict with China over Taiwan has
grown in recent years given the PRC’s military build-up opposite Taiwan, Beijing’s
refusal to renounce using force against the island, and U.S. defense commitments.
But the biggest complicating factor for U.S. policymakers today may come from
Taiwan’s own political circumstances, which have changed dramatically since Congress
passed the 1979 TRA.¹⁵ Under the authoritarian rule of Chiang Kai-shek’s Nationalist
Party (also known as the KMT), Taiwan’s political decisions were predictable, closely
aligned with U.S. interests, and dependent largely on U.S. support. But several decades
of political reforms have made Taiwan politics today both more democratic and more
nationalistic. Taiwan’s current elected president, Chen Shui-bian, is a member of the
Democratic Progressive Party (DPP), a pro-Taiwan independence opposition party that
did not legally exist until 1986. Political differences between President Chen and the
legislature in Taiwan, still under the control of a KMT-dominated coalition, have resulted
in political polarization that among other things has blocked funds for the purchase of the
U.S. military weapons package approved for sale under the TRA in 2001. Administration
officials have expressed growing concerns over Taiwan’s political polarization, the effects
of President Chen’s more assertive policies, and the complications these present for U.S.
policy.¹⁶
Faced with the historical record and with continuing transformations in both the PRC
and Taiwan political systems, U.S. officials may be facing new and more difficult policy
choices concerning Taiwan in the coming years. In addition to raising the risks of
political and economic instability, some suggest that political polarization in Taiwan
could erode the quality of U.S.-Taiwan contacts and create fractures within the sizeable
U.S. Chinese-American community. Pressure from multiple sources could continue to
build for U.S. officials to take any number of actions: to reassess all the fundamentals of
U.S. China/Taiwan policy in light of changing circumstances; to reinforce American
democratic values by providing greater support for Taiwan and possibly support for
Taiwan independence; to significantly reduce U.S. defense ties to Taiwan in response to
Taipei’s continued rejection of the 2001 arms package; or to abandon Taiwan in favor of
the geopolitical demands and benefits of close U.S.-China relations. U.S. officials could
face increasing pressure to abandon the traditional “noninvolvement” U.S. approach and
instead adopt a mediating role in the cross-strait relationship. Finally, any policy
developments that affect Taiwan have direct consequences for U.S.-China relations and
could involve crucial decisions among U.S. officials about the extent of U.S. support for
Taiwan’s security.

¹⁴ (...continued)
future of Taiwan will be determined by peaceful means.”
¹⁵ See CRS Issue Brief IB98034, Taiwan: Recent Developments and U.S. Policy Choices, by
Kerry Dumbaugh.
¹⁶ In September 2005, for example, at the U.S.-Taiwan Business Council-Defense Industry
Conference 2005, Edward Ross, Director of the U.S. Defense Department’s Defense Security
Cooperation Agency, strongly criticized the politicization of security issues in Taiwan, saying
it was reasonable to question why the United States should invest in Taiwan’s self-defense if
Taiwan itself were not willing to invest in it.