From Heritage Foundation website:
The Reagan Administration spent the first half of 1982 in increasingly tough negotiations with the People’s Republic of China (PRC) over America’s continuing arms sales to Taiwan following the 1979 shift of U.S. diplomatic relations to Beijing. The Carter Administration had insisted that, given congressional opinion, continuing limited arms sales to Taiwan was a political necessity, but this was a bone in the throat as far as Beijing was concerned. American supporters of the new relationship with China also saw the arms sales as an obstacle to good relations with Beijing and were vocal on that point.
In the spring of 1982, the PRC began threatening to severely downgrade its relationship with the U.S. unless something was done about the arms sales, and some in Beijing were discussing “playing the Soviet card.” Then-Secretary of State Alexander Haig was convinced that, “in the last quarter of the twentieth century, China may well be the most important country in the world” in terms of American interests. He pressed hard and successfully for some form of accommodation with Beijing, although his ultimate recommendation that the U.S. agree to cease arms sales to Taiwan was not accepted. [Full Text]
Ambassador Harvey Feldman is Distinguished Fellow in China Policy in the Asian Studies Center at The Heritage Foundation.