The "One-China policy" is a policy asserting that there is only one sovereign state under the name China, as opposed to the idea that there are two states, the People's Republic of China (PRC) and the Republic of China (ROC), whose official names incorporate "China". Many states follow a one China policy, but the meanings are not the same. The PRC exclusively uses the term "One China Principle" in its official communications.
The One China concept is different from the "One China principle", which is the principle that insists both Taiwan and mainland China are inalienable parts of a single "China". A modified form of the "One China" principle known as the "1992 Consensus" is the current policy of the PRC government. Under this "consensus", both governments "agree" that there is only one sovereign state encompassing both mainland China and Taiwan, but disagree about which of the two governments is the legitimate government of this state. An analogous situation existed with West and East Germany in 1950–1970, North and South Korea, and more recently, the Syrian government and Syrian opposition.
The One-China Principle is also a requirement for any political entity to establish diplomatic relations with the People's Republic of China. The PRC has traditionally attempted to get nations to recognize that "the Government of the People's Republic of China is the sole legal government of China ... and Taiwan is an inalienable part of the territory of the People's Republic of China." However, many nations are unwilling to make this particular statement and there was often a protracted effort to find language regarding one China that is acceptable to both sides. Some countries use terms such as "respects", "acknowledge", "understand", "take note of", while others explicitly use the term "support" or "recognize" for Beijing's position on the status of Taiwan. This strategic ambiguity in the language used provides the basis for countries to have formal ties with People's Republic China and maintain unofficial ties to the Republic of China.
PRC government policy mandates that any country that wishes to establish diplomatic relationship with the PRC must first discontinue any formal relationship with the ROC. According to The Fletcher Forum of World Affairs, "non-recognition of the Taiwanese government is a prerequisite for conducting formal diplomatic relations with the PRC —in effect forcing other governments to choose between Beijing and Taipei." In order to compete for other countries' recognition, each Chinese government has given money to a certain few small countries. Both the PRC and ROC governments have accused each other of monetary diplomacy. Several small African and Caribbean countries have established and discontinued diplomatic relationships with both sides several times in exchange for huge financial support from each side.
The name "Chinese Taipei" is used in some international arenas since "Taiwan" suggests that Taiwan is a separate country and "Republic of China" suggests that there are two Chinas, and thus both violate the One-China Principle. Taiwan could also be used as shorthand for the Customs Union between Taiwan, Penghu, Kinmen and Matsu. For example, in Common Foreign and Security Policy (CFSP) Declaration on the March 2007 elections, issued on behalf of the European Union and with support of 37 countries, express mention is made of "Taiwan."
Most countries that recognize Beijing circumvent the diplomatic language by establishing "Trade Offices" that represent their interests on Taiwanese soil, while the ROC government represents its interests abroad with TECRO, Taipei Economic and Cultural Representative Office. The United States (and any other nation having diplomatic relations with the People's Republic of China) does not have formal diplomatic relations with the ROC. Instead, external relations are handled via nominally private organizations such as the American Institute in Taiwan or the Canadian Trade Office in Taipei.
As for the Philippines, the unofficial Embassy is called the Manila Economic and Cultural Office. Though it is a cultural and economic office, the website explicitly says that it is the Philippine Representative Office in Taiwan. It also offers various consular services, such as granting visa and processing passport.