The Central American nation of Nicaragua broke official ties with Taiwan and switched allegiance to China.
Nicaraguan officials signed a communique in the Chinese city of Tianjin to reestablish relations with Beijing, according to Chinese state broadcaster CCTV.
Nicaragua's foreign ministry released a statement and said that "the government of the Republic of Nicaragua today breaks diplomatic relations with Taiwan and ceases to have any contact or official relationship."
Nicaragua acknowledges 'One China' policy
"The People's Republic of China is the only legitimate government that represents all of China and Taiwan is an inalienable part of the Chinese territory," the foreign ministry added in the statement.
In doing so, the Nicaraguan government diplomatically acknowledged the "One China" policy.
This policy asserts there is just one Chinese government. Under the principle, China views Taiwan as a Chinese province that broke away amid the civil war in 1949.
China seeks to reunify Taiwan with the mainland and has lately stepped up pressure to wean away Taipei's allies. The US officially recognizes one Chinese government.
The US and Taiwan have developed greater ties recently, as both countries held formal dialogues for greater economic relations in November.
China welcomes decision, Taiwan feels 'pain'
China's ambassador at the United Nations, Zhang Jun, commended Nicaragua's "right decision" in a tweet.
"The One-China principle is a consensus widely accepted by the international community," Jun added in the tweet.
Taiwan expressed "pain and regret" at the decision. Taiwan's government said Nicaragua disregarded the friendship between the peoples of Taiwan and Nicaragua.
But Taiwan's government also expressed confidence in its own sovereignty. Its foreign ministry said that "as a member of the international community, Taiwan has the right to exchange and develop diplomatic relations with other countries."
"The more successful Taiwan's democracy is the stronger the international support," Taiwanese President Tsai Ing-wen said.
The US State Department criticized the decision, saying Nicaragua's decision did not "reflect the will of the Nicaraguan people" because the government was not freely elected.
Taiwan's president also told reporters that it would continue to uphold democracy and "march towards the world," in spite of pressure.
Severed relations serves blow to the US
Nicaragua's break with Taiwan follows months of worsening ties between the Nicaraguan government and Washington.
The US expressed dismay at Nicaragua's decision.
"We encourage all countries that value democratic institutions, transparency, the rule of law, and promoting economic prosperity for their citizens to expand engagement with Taiwan," State Department spokesperson Ned Price said.
He added the decision deprived Nicaraguans of a "steadfast partner in its democratic and economic growth."
Nicaragua's President Daniel Ortega announced the decision the same day the US State Department slapped sanctions on a national security adviser to Ortega.
The US alleged that Nestor Moncada Lau ran a customs fraud scheme to enrich members of Ortega's government.
One Taiwan-based diplomatic source, speaking on condition of anonymity, told Reuters news agency it was natural for Nicaragua to look to other powers for aid and support.
Nicaragua's decision leaves Taiwan with just 14 formal diplomatic allies, most of them in Latin America and the Caribbean.
