As you yourself note in the thread title, this is a Chinese item. As this forum pertains to Japan, your item is not really relevant here. However, I can offer a little bit of help.
I will offer a piece-by-piece
rough translation of the text, but it includes some inferences on my part, and I certainly cannot vouch for the accuracy. There are certainly at least some minor errors, and there may even be multiple, larger errors. What I provide should give you a general idea of what is written, though, which is what you requested...
First of all, as I'm sure you know, the two flags in the center represent the R.O.C. flag, on the left, and the American flag, on the right. The banner was given by the Chinese to the Americans, and the text on each side describe the specific giver and recipient.
Here is my attempt at translating the various text.
Center: 友誼永誌 record of perpetual friendship
Left side: 中華民國陸軍飛彈第二營營長砲兵上校 張德溥率全營留美官士敬贈
中華民國 Republic of China
陸軍 Army
飛彈 Missile
第二營 2nd Battalion
營長 Battalion Commander
砲兵 Artilleryman
上校 Colonel (or other similar high rank)
張德溥 Zhang De-Pu (proper name) (I believe he is pictured, in B&W, on this page:
國軍歷年演習與作戰紀錄片 - 演訓回憶 - 後備軍友俱樂部 - Powered by Discuz!
率全營 leader of all battalions
留美 stationed in the U.S.
官士 officers
敬贈 presented respectfully
Right side: 美國陸軍飛彈第一旅第一羣第二營惠存
美國陸軍 U.S. Army
飛彈 Missile
第一旅 1st Brigade
第一羣 1st Regiment?? (羣 is a variation of 群)
第二營 2nd Battalion
惠存 a polite term of respect which is used to request a gift recipient to keep/preserve the gift