Traditionally, research that examines foreign policy in sport often revolves around the prestige, status, welfare and protection of ethnic or human kin. However, this article argues that from the outset, China's foreign policy on sport vis-à-vis Taiwan has placed national security and territorial integrity as its number one priority. Chinese leaders have developed a carrot-and-stick policy. On the one hand, an “Olympic formula” has been devised enabling Taiwan to participate in non-governmental international organizations such as the Olympics. On the other hand, a “one China principle” has been imposed, to treat Taiwan as a local province that ceases to be a sovereign state. The 2008 Beijing Olympics is a perfect arena for China to use the two doctrines interchangeably.