This paper examines the complex issue of the triangular relationship between China, Taiwan and the United States. Due to its importance to both China and the United States, Taiwan has burdened the relationship between the two powers as long and as fierce as any. China considers Taiwan an integral part of its territory and has been unwilling to reject the use of force to settle the Taiwan issue. Under these conditions, Taiwan has chosen to balance China by aligning itself with the United States in order to avoid submission or destruction. Although the U.S. supports a “one-China” policy, it is strongly opposed to any move that could change the status quo in the Taiwan Strait by force. While both Beijing and Washington often emphasize positive engagement and dialogue, divergent interests of China and the United States over Taiwan, along with their contest for domination in East Asia, have remained a focal point of contention that could send the two powers on a collision course.