"The status of Taiwan is a key issue for U.S. foreign policy and a critical point of contention in U.S. relations with China, which claims sovereignty over Taiwan. The U.S. policy framework for Taiwan was laid down in 1979 when Washington severed official relations with the Republic of China (ROC) on Taiwan and instead recognized the People's Republic of China (PRC) as the legitimate Chinese government. The basics of that policy shift -- the Taiwan Relations Act, the 3 U.S.China communiques, and the so-called "six assurances" toward Taiwan -- remain in place today. But many other factors have changed dramatically. The PRC itself is a rising global economic power scarcely resembling the country it was at the Nixon opening in the 1970's. U.S. economic and political relations with the PRC have expanded and become more diverse, playing a more complex role now than they did then in U.S. calculations of its own interests. The PRC's military has grown as well, with much of its strategic planning focusing on a Taiwan contingency. Taiwan, once an authoritarian one-party government under martial law, has become a fully functioning democracy." Source: Congressional Research Service.
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