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Panama has broken off diplomatic ties with Taiwan and established them instead with China in a major victory for Beijing.
Taiwan, the self-ruled island that China considers its own, is recognised by a dwindling number of countries, dropping from 30 to 20 in the past two decades.
The President of Panama, Juan Carlos Varela, said in a TV address: “Panama and China are nations that are developing and we share visions such as the importance of globalisation.
“Taiwan has been a great friend to Panama and we are very grateful to their friendship and cooperation to develop our country.”
Taiwan expressed anger, saying China had enticed Panama with money, “offending” the people of Taiwan.
Beijing has become the second largest customer of the strategic Panama Canal.
China added to the row by saying that Taiwan should make what it calls a “wise choice” and recognise the “One China” principle.