On the first day of January 1979, the United States de-recognized the Republic of China (also known as Taiwan or the ROC) as the official government of China, recognizing the Peopleâ??s Republic of China (the PRC) instead. While this declaration helped to strengthen the U.S. relationship with the PRC against the Soviet Union, it created chaos in Taiwan. With the closure of the U.S. embassy in Taipei came a widespread financial crisis, the result of a mass exodus of investors from the country.
What may not have been clear was that the U.S. government, under the Carter administration, was not seeking to sever ties with the island. Although the U.S. had officially revoked its recognition of Taiwan as a legitimate political entity, significant U.S. financial and military interests remained on the island. The closing of the U.S. embassy in Taipei presented an obstacle to protecting those interests. Thus began the search for a solution that would allow the U.S. to conduct diplomatic relations with Taiwan in an unofficial capacity.
Read Full Article »