In December 1972 the Australian government recognised the government of the People's Republic of China (PRC) at the cost of breaking off all official contacts with Taiwan. Despite the initial shock to Australia-Taiwan relations of derecognition, trade contacts between Australia and Taiwan have continued to flourish, and in recent years, political relations between the two have also been improving. This thesis examines reasons behind the recent improvements in Australia-Taiwan relations and ways in which such improvements have been implemented - given the constraints that Australia has no official contacts with Taiwan. With its main focus as trade, this thesis shows that Taiwan's importance to Australia has been slowly evolving such that Taiwan is at present a more important and reliable trading partner to Australia than is the PRC. Improvements have been occurring in Australia-Taiwan political relations, therefore, primarily as a consequence of Taiwan's growing importanée in the Australian marketplace.