"Taiwan, which officially calls itself the Republic of China (ROC), is an island democracy of 23 million people located across the Taiwan Strait from mainland China. It is the United States' tenth-largest trading partner. Since January 1, 1979, the U.S. relationship with Taiwan has been unofficial, a consequence of the Carter Administration's decision to establish diplomatic relations with the People's Republic of China (PRC) and break formal diplomatic ties with self-ruled Taiwan, over which the PRC claims sovereignty. The Taiwan Relations Act (TRA, P.L. 96-8; 22 U.S.C. 3301 et seq.), enacted on April 10, 1979, provides a legal basis for the unofficial U.S.- Taiwan relationship. It also includes commitments related to Taiwan's security. The PRC considers unofficiality in the U.S.-Taiwan relationship to be the basis for the U.S.-PRC relationship. Some Members of Congress have urged the executive branch to re-visit rules intended to distinguish the unofficial U.S.-Taiwan relationship from official U.S. relationships with diplomatic partners, in order to accord Taiwan greater dignity and respect."
CRS Report for Congress, R44996
Federation of American Scientists: http://www.fas.org/sgp/crs/index.html