TAIPEI (REUTERS) - Taiwan said on Friday (July 3) it will reopen its de facto consulate in Guam, a strategically-located US island with a large US military base in the Pacific, a part of the world where China is stepping up its diplomatic reach.

Taiwan's Foreign Ministry said the reopening of its Taipei Economic and Cultural Office (Teco) in Guam, after its closure in 2017 for budget reasons, was a response to closer Taiwan-US relations and the strategic importance of the Pacific region.

"Re-establishing Teco in Guam will facilitate economic and trade cooperation and exchanges between Taiwan and the greater western Pacific region, deepen Taiwan's relations with its Pacific allies, and increase multilateral exchanges," the ministry said.

China is challenging US influence in the Pacific, a region that the United States has considered its back yard since World War II.

Last year, China whittled away at Taiwan's allies in the Pacific by winning over Kiribati and the Solomon Islands.

China considers Taiwan its own territory with no right to state-to-state ties. Four of Taiwan's remaining 15 diplomatic allies are in the Pacific - Palau, Nauru, Tuvalu and the Marshall Islands.

The small developing nations lie in highly strategic waters, and the United States and its friends like Australia have become increasingly concerned by China's moves to expand its footprint there.

Taipei and Washington have no formal diplomatic relations, but the United States is Taiwan's strongest supporter on the international stage, which is another source of tension between Washington and Beijing.

Taiwan President Tsai Ing-wen went to Guam in 2017 on her way back from visiting the island's Pacific allies.