The tiny South Pacific nation of Tuvalu has rejected offers from Chinese firms to build artificial islands that would help it deal with rising sea levels, officials said on Thursday.
The offers were viewed as an attempt to undermine Taiwan’s influence in the region.
Instead, Tuvalu has chosen to retain ties with Taiwan.
Beijing considers Taiwan to be a part of China, while Taiwan maintains its sovereignty.
Tuvalu Foreign Minister Simon Kofe expressed support for Taiwan and said his nation was setting up a group to unite Taiwan’s four remaining Pacific allies – the Marshall Islands, Palau, Nauru and Tuvalu.
“We believe in the power of grouping together and collaborating,” he told Reuters news agency.
“Together with our partners, we will be able to counter the influence from mainland China.”
Mr Kofe said Chinese companies had approached local communities offering to help with a $400m (£310m) government plan to build artificial islands. He believes the companies were backed by the Chinese government.
“We are hearing a lot of information about debt,” he said. “China buying our islands and looking at setting up military bases in our part of the world. Those are things that are concerning to us.”
China has recently increased efforts to expand its influence in the Pacific, alarming the United States and its allies.
The support from Tuvalu comes just months after Taiwan lost two allies in the region, when Kiribati and the Solomon Islands switched diplomatic recognition to China.
Only 15 countries now recognize Taiwan as a sovereign nation.
Beijing has proposed the self-governing territory operate under a “one country, two systems” structure, similar to Hong Kong .
Since Taiwan President Tsai Ing-wen took office in 2016, seven countries have dropped Taiwan as a diplomatic ally. The support from Tuvalu could help her as she seeks re-election in January.