This chapter examines a unique feature and important factor that helps shape the changing dynamics of the relations among China, Taiwan, and the United States - the Taiwan Relations Act (TRA). More than thirty years ago, on 15 December 1978, United States President Jimmy Carter announced that the U.S. government would terminate diplomatic relations with the Republic of China (ROC) on Taiwan and recognize the People's Republic of China (PRC) on the mainland. The news unsettled my carefree days as a freshman at National Taiwan University. The mood on campus was gloomy and pessimism permeated the society. Many people felt betrayed, and the future looked uncertain. While its "economic miracle" had taken off by then, Taiwan's democratic transition was just in its infancy. Per capita GNP was US$1,958 (in current prices).

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