On December 2, 1954, the United States and Republic of China, commonly referred to as Taiwan, signed the Sino-American Mutual Defense Treaty.

After the Xinhai Revolution in 1912, the Republic of China (ROC) replaced the imperial Qing Dynasty that had ruled China for over two-thousand years. The ROC was based on mainland China and remained there for over 30 years.

After WW II, Japan surrendered control of Taiwan and its neighboring islands to the Allied Forces and the ROC took control of Taiwan and its neighboring islands. So, as of late 1945, the ROC controlled both mainland China and Taiwan.

However, in 1949, the Communist Party of China, called the People’s Republic of China (PRC), took over control of mainland China from the ROC. This created two rival governments within China – the PRC (Communists) and ROC (free republic) – where both claimed each other’s territory and to be the sole legitimate government of "China.” This led to the Chinese Civil War and millions of ROC followers fled to Taiwan and its neighboring islands to escape the PRC/Communists.

On this day December 2, 1954, the United States and the ROC/Taiwan signed the Sino-American Mutual Defense Treaty to strengthen ties between the U.S. and Taiwan. The U.S. supported the free republic of Taiwan over the Communist-led PRC on mainland China. However, the treaty was somewhat limiting as it mainly applied to the defense of Taiwan and only included Taiwan and the island of Pescadores but not any of the other islands.

Well into the 1970s, many countries continued to recognize Taiwan as the official government of “China.” In fact, the ROC was one of the founding members of United Nations and one of the five permanent members on the UN Security Council up until 1971. However, over time the international community eventually recognized the PRC/Communists as the legitimate government of “China.”

In January 1980, the Sino-American Mutual Defense Treaty was terminated after President Jimmy Carter unilaterally annulled the treaty by establishing relations with the People’s Republic of China the previous year. Carter’s act was brought before the U.S. Supreme Court to determine whether he could even do that. However, the court refused to rule on the issue given the political nature of his act. Then, shortly after the United States' recognized the People's Republic of China U.S. Congress passed the Taiwan Relations Act to again show support for Taiwan.

Today, the tension between the two “Chinas” is still present. Some advocate for a “One-Nation Two-Party” system with China and Taiwan, while others advocate for Taiwan’s independence from mainland China.

Taiwan is currently a member of the WTO and is a leader in the free market system where it has grown into one the largest economies in the world. In fact, Taiwan, along with Hong Kong, Singapore, and South Korea are regarded as one of the “Four Asian Tigers” because of their robust Asian economies.