It is recognised that under the provisions of Article 10 of the San Francisco Treaty, Japan has renounced all special rights and its interests in China, including all benefits and privileges resulting from the provisions of the final Protocol signed at Peking on 7 September 1901, and all annexes, notes, and documents supplementary thereto, and has agreed to the abrogation in respect to Japan of the said protocol, annexes, notes, and documents.
To refer to the Japanese the treaty says "Japanese nationals", but it does not call the Taiwanese "Chinese nationals" but instead, it prefers the term "residents". This shows that the Taiwanese are not "Chinese nationals" but only "deemed" to be such.
The Treaty of Taipei is a pact between Japan and countries that are not signatories to the San Francisco Peace Treaty (SFPT). Article 26 states: “Should Japan make a peace settlement or war claims settlement with any State granting that State greater advantages than those provided by the present Treaty, those same advantages shall be extended to the parties to the present Treaty.”
Taiwanese were forced to adopt ROC citizenship in 1946, but the Fourth Geneva Convention states that occupation transfers administrative rights, but not sovereignty, “quasi-sovereignty” or national title.
In the peace treaty, Japan has merely renounced sovereignty over Taiwan, but there has been no other disposition. The United States also has an interest in Taiwan and could assert a legal claim to the island(s). Hence, the disposition of Taiwan is not merely an internal Chinese problem.
The Republic of China and Japan will endeavour to conclude, as soon as possible, a treaty or agreement to place their trading, maritime, and other commercial relations, on a stable and friendly basis.
Initially, the United States had supported the Republic of China sending delegates to attend the conference, but this was deemed unacceptable by the Soviet Union and Britain
Advocates of Taiwan independence have used this omission to call into question any legal claims on Taiwan, arguing that the future of Taiwan should be decided by self-determination.
The Chinese - Japanese Peace Treaty (aka "Treaty of Taipei") between the Republic of China and Japan came into effect on August 5, 1952, and is a subsidiary treaty as authorized by SFPT Article 26.
That treaty included an article that said “nationals of the Republic of China shall be deemed to include all the inhabitants and former inhabitants of Taiwan and Penghu and their descendants who are of Chinese nationality in accordance with the laws and regulations which have been or may hereafter be enforced by the Republic of China in Taiwan.”