In 1949, Chiang Kai-shek's defeated Kuomintang and fled to Taiwan with Mao Zedong's Red Army in hot pursuit. Taiwan was regarded by the United States of America as being of no strategic significance and seemed destined to be taken over by the Chinese Communist Party. .
However, with the outbreak of the Korean War on 25 June 1950, Taiwan became an important anchor in a US defensive chain'. During that period, US Secretary of State, John Foster Dulles claimed that the collapse of Chiang Kai-shek's Government of Taiwan would jeopardize America's offshore defences.
Over the next two decades, Taiwan became an American fortress. It promoted itself as the Republic of China representing all of China, including the mainland, and was formally recognised as such by the US and its allies, such as Japan and Australia. Taiwan's post war take-off was supported by US economic aids, preferential market access, technology transfers and training in capitalist ways. On the other hand, US government guarantees to helped secure Taiwan's status as an independent island state. Since then, the People's Republic of China on the mainland and the Republic of China on Taiwan challenged each other physically and diplomatically for the title of being the only legal government representing all of China. .
By July 1971, the US quest to untangle itself from Indochina and outflank a rising Soviet Union led to a breakthrough in Sino-US (between China and US) relations. In the Shanghai Joint Communiqué of 27 February 1972, the US declared that it did not challenge the claim by all Chinese on either side of the Taiwan Strait maintain that there was one China. It also reaffirmed its interest in a peaceful settlement of the Taiwan question. US maintained diplomatic relations and has signed a treaty with People Republic of China stated that they will remove all American forces from Taiwan; abrogation of the Mutual Defense Treaty with the Republic of China (Taiwan); and the end of all official governmental ties with Taiwan, only that People Republic of China obey the terms and policy.