In order to boost the Chinese economy, when Deng Xiaoping launched his transformative economic reforms known literally as ‘reform and opening up’ in 1978, it was important that the United States were positive about such a plan. For at the time, the United States were the dominant global commercial power and as such, guarded the gates to finance, innovative technology and international trade. U.S.-China relations had soured from Nixon’s Watergate scandal when Jimmy Carter became the 39th U.S. President in 1976. Carter had pledged to improve U.S.-China relations while trying to respect Taiwanese independence. Deng Xiaoping declined this offer in 1977. However, with Deng Xiaoping’s reforms receiving commitment by the Communist Party of China in favour over Chairman Hua Guofeng’s ideas, American goodwill was more important than ever. Likewise, Chinese neighbours Russia, Vietnam and others were militarily threatening. Lastly, the United States themselves thought it prudent to align with China in opposition to the Soviet Union. China broadly agreed with this alignment against the Soviet Union, and negotiations started with haste. Vietnam had increased hostility against China and recently signed a treaty of friendship with the Soviet Union, exemplifying the necessity for China to acquire a powerful ally in the United States. As such, China accepted almost all the terms they had rejected in 1977, and by the beginning of 1979, the United States ended diplomatic relations with Taiwan, recognising only the PRC as the governing power in the region. Nevertheless, the United States still sold arms to Taiwan. Deng Xiaoping was frustrated by this but acquiesced as he couldn’t allow the deal to breakdown with all that was at stake.