"The United States fully supports Taiwan's membership in international organizations where statehood is not a requirement for membership," Obama said in a statement yesterday.
The president added that his administration encouraged Taiwan's "meaningful participation, as appropriate, in organizations where its membership is not possible."
Obama signed the bill the day after the end of strategic economic and security dialogue talks between top US and Chinese officials in Washington.
He said that the measure was consistent with the "One China" policy which governs the US approach toward China and Taiwan.
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Taiwan, which was founded by Chinese nationalists after defeat in the mainland's civil war and has evolved into a prosperous democracy, lost its seat in the United Nations in 1971 when the General Assembly admitted Beijing.
China -- which considers Taiwan a Chinese province awaiting reunification, by force if necessary -- has adamantly opposed any international role or recognition that implies that the island is a separate country.
But it has not been vocal on Taiwan's bid for observer status at the aviation organization.