It is not confusing at all. Taiwan is a commonly used name for the ROC, and (mainland) China is generally understood as a reference to the PRC.

Since the de facto territories of the two states are common knowledge, you can unambiguously refer to them just by mentioning their rough position on the map. Similarly, East/West Germany were not officially called East/West Germany, and it was not the official name of either country, but people still understood what the words meant.