Formosa became the seat of the National Government of the Republic of China in December 1949. By the peace treaty of September 8, 1951, signed with the United States and other powers, Japan renounced "all right, title, and claim to Formosa and the Pescadores." The treaty did not specify the nation to which such right, title, and claim passed. Although the Republic of China was not a signatory to the treaty it and the parties at the conference expressly recognized that it did not dispose finally of Formosa and the Pescadores. The Republic of China concluded a separate peace treaty with Japan on April 27, 1952, "on the same or substantially the same terms" as specified in article 26 of the Japanese treaty.

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It is the view of the Committee that the coming into force of the present treaty will not modify or affect the existing legal status of Formosa and the Pescadores."

To avoid any possibility of misunderstanding on this aspect of the treaty, the committee decided it would be useful to include in this report the following statement:

It is the understanding of the Senate that nothing in the treaty shall be construed as affecting or modifying the legal status or sovereignty of the territories to which it applies.