According to the One China policy, Taiwan is a part of the People’s Republic of China and should not be acknowledged as a separate entity. Any country that wants to have diplomatic relations with China has to follow this policy. Recently President-elect Donald Trump broke with years of diplomatic history by saying that the US was ‘not necessarily’ bound by the One China policy. He went on to say that if China was open to negotiating other issues then the US would consider recognizing the One China policy.
The One China policy goes back to 1949 when the Kuomintang were defeated by the Communists, in China’s civil war, and fled to Taiwan. The Communists established the People’s Republic of China in present China. However, initially it was the Kuomintang that were diplomatically acknowledged as the Chinese government around the world. During the time of President Nixon after much negotiation, in 1971 Taiwan lost its UN seat to China. However, even at this stage the US did not ascribe completely to the One China policy. It was President Carter who officially cut diplomatic ties with Taiwan and recognized the One China policy. But at the same time he established the Taiwan Relations Act which allowed the US to arm Taiwan.
Since then the One China policy has been strictly adhered to by the US and pretty much every single country that wants to have diplomatic relations with China.