TAIPEI/BEIJING • China offered the Dominican Republic a US$3.1 billion (S$4.1 billion) package of investments and loans to get it to sever ties with Taiwan, a Taipei official said yesterday, after the Caribbean nation switched allegiance to China in a diplomatic blow to the self-ruled island.

China said there were no economic pre-conditions.

Taiwan, claimed by China as its own, has formal relations now with only 19 countries, many of them poor nations in Central America and the Pacific, such as Belize and Nauru.

China says Taiwan is a wayward province with no right to state-to-state ties.

Beijing and Taipei have tried to poach each other's allies over the years, often dangling generous aid packages in front of developing nations, though Taiwan struggles to compete with an increasingly powerful China.

Panama ended its longstanding relationship with Taiwan last year in a major diplomatic victory for China.

The Vatican is possibly next on the list, as the Holy See and China edge closer to an accord on the appointment of bishops in China.

The news on the Dominican Republic's switch, announced in both Beijing and Santo Domingo, drew strong and swift condemnation from Taiwan Foreign Minister Joseph Wu.

"President Danilo Medina of the Dominican Republic has ignored our long-term partnership, the wishes of the people of the Dominican Republic, and the years of development assistance provided by Taiwan, to accept false promises of investment and aid by China," Mr Wu told reporters.

"(Taiwan) strongly condemns China's objectionable decision to use dollar diplomacy to convert Taiwan's diplomatic allies.

"Beijing's attempts at foreign policy have only served to drive a wedge between the people on both sides of the Taiwan Strait, erode mutual trust and further harm the feelings of the people of Taiwan."

A Taiwan Foreign Ministry official told Reuters that, according to initial calculations, China dangled at least a US$3.1 billion package of investments, financial assistance and low-interest loans for the Dominican Republic, which shares an island with Haiti to the west.

That included US$400 million for a new freeway, US$1.6 billion for infrastructure projects and US$300 million for a new natural gas power plant.

"It was a cost that Taiwan could not match," the official said.

China's Foreign Ministry said the move was a political one with no economic pre-conditions, but now that they have established ties, China will "proactively promote mutually beneficial cooperation in all areas".

REUTERS