The "One China" policy means there is only one Chinese nation and that it is governed from Beijing.

Right? Wrong.

In fact, the policy allows for the existence of two separate Chinese entities, not one.

They are People's Republic of China (PRC), governed by the Communist Party from Beijing, and the Republic of China (ROC), based on the island of Taiwan and governed by the Democratic Progressive Party.

If that sounds confusing, it's because it is. The policy was designed to be deliberately ambiguous.

To further complicate matters, the One China policy isn't actually one policy at all, but several — the most famous and influential being the American version.

Various US allies, including Australia, Canada and Japan, have their own policies, all in line with America's.

How does it work?

The US policy was developed as a piece of Cold War realpolitik.

Taiwan and mainland China split in 1949 at the end of a brutal civil war.

In the 1950s and '60s, Washington saw the PRC as a Communist menace and refused to officially accept its legitimacy.

But by the 1970s, in the wake of the Sino-Soviet split, the US wanted to improve relations with Beijing for both political and economic reasons.

The American One China policy became a way of ending the animosity.

It didn't resolve the thorny issue of Taiwanese sovereignty, it simply provided a diplomatic breathing space.

Taiwanese protesters demonstrating against a visit from Chinese vice-president Teng Hsiao-ping in 1979 ( Getty: Bettmann )

"The position statement is that the United States 'recognises' the People's Republic of China as the sole legal government of China," explains China expert Mark Harrison, from the University of Tasmania.

"However, it does not state that it accepts that the PRC has sovereignty over Taiwan.

"The word that it uses is that it 'acknowledges' Beijing's position that it is the sovereign government of the island of Taiwan."

Australia's One China policy contains similar wording.

"There's a very particular ambiguous use of language in the way these statements are framed," Dr Harrison says.

"Washington and other countries show that they understand Beijing's position but also indicate that they will not take action that validates Beijing's position."

That diplomatic fuzziness, says Dr Harrison, was all about saving face.

It allowed Washington and the post-Mao government in mainland China to interpret the policy in divergent ways, thus making it palatable to their respective domestic audiences.

What did both sides gain?

To win over the Communist government in Beijing, Washington made a crucial compromise.

It agreed to drop its long-standing recognition of Taiwan as the sole legitimate government of all of China.

At the time, Taiwan was an authoritarian dictatorship.

But the US did not abandon the island.

Instead, Taipei was given additional military and economic support through the passage of the Taiwan Relations Act of 1979 and remains a key US ally in the Indo-Pacific.

While Taiwan lost its official status with America and other Western countries, it subsequently maintained its relevance by opening a network of quasi-embassies across the world, such as the Taiwan Economic and Cultural Exchange Office in Canberra.

Beijing accepted the new diplomatic arrangement because it gained increased international status and new trading partners.

Taiwan was forced to go along with the change, because America had already made up its mind and because Taiwan was reliant on US military support for its existence.

For several decades the implicit ambiguity of One China, in its various manifestations, helped keep the peace between Taipei and Beijing.

But then two significant changes occurred: Taiwan transformed itself from a dictatorship into a democracy, and Xi Jinping became President of the People's Republic of China and began a more aggressive foreign policy.

China's foreign policy became more aggressive under President Xi Jinping. ( Getty )

One China as a weapon

Despite the benefits offered by the One China policies of the West, Beijing has long proclaimed its own One China "principle".

It states that there is only one China, that Taiwan is a renegade province of China, and that the Chinese Communist Party is the rightful government of both the mainland and Taiwan.

Previous Chinese leaders such as Deng Xiaoping and Jiang Zemin saw unification with Taiwan as a secondary issue.

But under Mr Xi, unification has been emphasised as part of a nationalistic strategy known as the Chinese Dream.

Jessica Drun, from the Washington-based Centre for Advanced China Research, says the Chinese Communist Party has begun using Western confusion over what One China means as part of their propaganda.

She says government officials and Chinese media often deliberately conflate the One China policies of the West with the PRC's own uncompromising One China principle.

"These statements often do not distinguish between the two and use them interchangeably, but always under the framing of the One China principle," she says.

"A recent example was when the Taiwanese President had an extended layover in the United States.

When Taiwanese President Tsai Ing-wen visited the US recently, the Ministry accused Washington of violating its One China policy. ( Getty: The Asahi Shimbun )

"When she visited NASA, the Chinese Foreign Ministry stated: 'We urge the US to stick to the One China principle'. However, the US does not adhere, and has never adhered, to the One China principle."

The Ministry also accused Washington of violating its own One China policy by allowing President Tsai Ing-wen to enter the US in the first place.

It was another spurious claim, Ms Drun says.

"The US One China policy, within its scope and limit, allows such actions by the Taiwan President," she says.

"By painting the One China policies as the One China principle, this gives Beijing more legitimacy on the ground, while at the same time limiting Taiwan's international space."

Independence vs unification

Mr Xi has also stepped up the rhetoric on future unification, telling the Communist Party's 19th National Congress in late 2017 that the time is coming when Taiwan will finally be brought under Beijing's control — by force, if necessary.

"All activities of splitting territory from the motherland will be opposed firmly by all Chinese people," Mr Xi told delegates.

"We have firm will, sufficient confidence and sufficient ability to defeat any form of Taiwan separatist plans."

Taiwanese-Australian researcher Mei-fen Kuo says such rhetoric has only increased Taiwanese public support for a permanent separation from China.

Before Taiwan democratised in the 1990s, the then Nationalist government in Taipei also held to their own version of the One China principle, arguing that they, the Nationalists, were the legitimate government of China in exile.

But public opinion in Taiwan has shifted considerably since then.

As recently as October this year there were demonstrations on the streets of Taipei calling for Taiwanese "independence".

Activists held placards proclaiming: "Taiwan — Not A Part of China" and "Say No to China. Say Yes to Taiwan".

Protesters in Taipei recently demonstrated against the leadership in Beijing. ( Getty: Picture Alliance )

Dr Kuo says many Taiwanese no longer believe in the One China ideal.

"The new generation begins to have a different view about themselves, about their identity," she says.

"In the last decade, pressure from China also pushed the new generation to identify itself as Taiwanese rather than Chinese."

She believes Western democracies need to show greater support for democratic Taiwan.

And she argues the US and Australia should re-examine the relevance of their intentionally ambiguous One China policies.

Michael Mazza from the American Enterprise Institute agrees. The US One China policy, he says, may now be more of a hinderance than a help.

"We don't recognise or afford formal diplomatic recognition to the government in Taiwan, and we are also very unclear about just how we would respond to China's use of force," he says.

"I think there's an argument to be made that this sort of ambiguity is actually destabilising."

Dangerous times ahead

Mr Mazza argues Taiwanese democracy has gained symbolic importance as China has become increasingly authoritarian and moved closer to "one-man rule" under Mr Xi.

"We have this really thriving democracy on Taiwan. It acts as a potential shining light on the hill for people in China who are interested in a freer future," he says.

"It puts the lie to the Chinese Communist Party notion that Chinese culture, Chinese civilisation does not accord with democracy."

But Melbourne University's Sow Keat Tok worries that a change in Washington's position might embolden pro-independence activists in Taipei.

Any attempt to gain complete freedom from China, he says, could spell disaster for Taiwan.

There could be war.

"It's not just the Communist Party, any regime in China cannot stand by to allow Taiwan to break away," he says.

"China will use extreme measures in order to reunify.

"For the time being, China has avoided using extreme measures, simply because there is no need to. The status quo is fine. But should that status quo be challenged, it is really difficult to anticipate what kind of measures China will take."