President Eisenhower held that Formosa and the Pescadores were not technically under Chinese sovereignty since Japan had made no cession in favor of China. The Nationalist Chinese are living in a "privileged sanctuary."
Conference: The President and the Secretary of State
Date: October 18, 1954
Subject: Issues regarding the security treaty with Nationalist China
. . . He [President Eisenhower] also reaffirmed the point I had mentioned, namely, that Formosa and Pescadores had a distinctive juridical status under the Japanese Peace Treaty. They were not technically under Chinese sovereignty since Japan had made no cession in favor of China. The President agreed, however, that once we made a security treaty with Nationalist China covering Formosa and the Pescadores, it would be necessary for them to refrain from offensive operations from their "privileged sanctuary."
[ source: United States Department of State / Foreign relations of the United States, 1952-1954. China and Japan Volume XIV, Part 1 (1952-1954), No. 350 ]
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