China, during the Qing Dynasty, ceded the island of Taiwan, including Penghu, to Japan "in perpetuity" at the end of the First Sino-Japanese War by signing the Treaty of Shimonoseki. In the Cairo Conference of 1943, the allied powers agreed to have Japan restore "all the territories Japan has stolen from the Chinese", specifically listing "Formosa" and Penghu, to the Republic of China after the defeat of Japan. According to both the People's Republic of China and the Republic of China, this agreement was given legal force by the Instrument of Surrender of Japan in 1945. The PRC's UN Ambassador, Wang Yingfan , has stated multiple times in the UN general committee: "Taiwan is an inseparable part of China's territory since antiquity" and "both the 1943 Cairo Declaration and the 1945 Potsdam Declaration have reaffirmed in unequivocal terms China's sovereignty over Taiwan as a matter of international law." The PRC rejects arguments involving the lack of a specific treaty  transferring Taiwan's sovereignty to China by noting that neither PRC nor ROC was a signatory to any such treaty, making the treaties irrelevant with regard to Chinese claims. The ROC argues that the Treaty of Taipei implicitly transferred sovereignty of Taiwan to it, however the US State Dept. disagreed with such an interpretation in its 1971 Starr Memorandum
Which Declaration came first, the Cairo Declaration or the Potsdam Delaration?
Cairo Declaration