Panama has cut long-standing diplomatic ties with Taiwan and established relations with China, in a diplomatic coup for Beijing, reports BBC.
The Panamanian government said it recognised there was “only one China” and considered Taiwan part of it.
Taiwan expressed “anger and regret”, and accused Panama of “bullying”.
China regards Taiwan as a breakaway province. A few countries maintain ties with Taipei instead of Beijing, and Panama is the latest to switch sides.
In December last year, the African island nation of Sao Tome and Principe made a similar move. Now only 20 countries have diplomatic relations with Taiwan.
In recent years China has intensified its economic investment into the Central American country - home of the economically vital Panama Canal.
Taiwan’s foreign ministry said in a statement that it expressed “anger and regret” over what it called a “very unfriendly” diplomatic turn by Panama that “yielded to economic interests by the Beijing authorities”.
It accused Panama of “bullying” Taiwan while “ignoring the many years of friendship” between the two countries, and added it would “not compete with the Beijing authorities for money diplomacy”.
It was as recently as June last year that Taiwan’s leader Tsai Ing-wen visited Panama, on her first overseas trip as president.
Following Panama’s announcement, China’s state media published photos of the two countries’ foreign ministers in Beijing signing a document establishing diplomatic relations and toasting with champagne.