Taiwan has welcomed a proposal by a United States Senate panel to allow American warships to call at Taiwan's ports.

If approved by US lawmakers, the decision could backtrack on Washington's commitment to the "one China" policy and most likely anger China, which sees self-ruling Taiwan as a breakaway province.

Observers say the move is a "morale booster" for Taiwan after it suffered a diplomatic setback when Panama cut official ties with the island and switched its allegiance to China two weeks ago.

The Senate Armed Services Committee on Wednesday voted to allow regular stops by US naval vessels as part of an annual defence-policy measure, signalling a major change in US policy towards Taiwan, according to a report by The Wall Street Journal (WSJ).

In a bipartisan 21-6 vote, the panel approved re-establishing "regular ports of call by the US Navy at Kaohsiung or any other suitable ports in Taiwan and permits US Pacific Command to receive ports of call by Taiwan", said WSJ.

The new policy also directs the Defence Department to help Taiwan develop its "indigenous undersea-warfare capabilities, including vehicles and sea mines" and calls for strengthening strategic cooperation. It is, however, not clear how the White House views the Senate committee's decision, which will have to be ratified by US lawmakers in Congress first.

WSJ said the proposed policy change towards Taiwan is being driven by senators from the Republican and Democratic parties.

When contacted, Taiwan's Ministry of Defence spokesman said it is optimistic and welcomes the "emphasis on the importance of military exchanges between Taiwan and the US which will favour the peace and national security of Taiwan".

If given the green light, the new policy breaks with a nearly 40-year-long diplomatic practice when US cut formal diplomatic relations with Taiwan in 1979 and recognised Beijing as the government of "one China", while keeping friendly non-official ties with Taipei.

China's foreign and defence ministries yesterday criticised the US proposal, saying it "concerns China's sovereignty and territorial integrity".

China has more than 1,500 missiles aimed at Taiwan, according to Taiwan's Defence Ministry.

Taiwan wants to build eight submarines to bolster its current fleet of four ageing vessels, in response to China's increased military threat around its waters. In January, a group of Chinese warships led by the Liaoning aircraft carrier entered the Taiwan Strait.

Given the pressure from Beijing, Taiwan has been unable to buy submarines and aircraft from US and European suppliers.

The US is Taiwan's only major political ally and its sole arms supplier, and weapons sales to Taiwan have repeatedly upset Beijing.

Taiwan is seeking a new arms package from the Trump administration, which Taipei hopes will include technology transfer.

Tamkang University national security expert Alexander Huang told The Straits Times that the US Senate committee's vote shows that Taiwan "still has many friends in the US and on Capitol Hill".

"This will provide some diplomatic space for Taiwan to manoeuvre and boost Taiwan-US military ties," said Dr Huang, who also chairs the Taipei-based Council on Strategic and Wargaming Studies.

Chinese Culture University political expert Edward Chen I-hsin said that while China can protest, there is "little or anything that it can do".

"Taiwan cannot be accused of being antagonistic towards Beijing because this is ultimately a move by US politicians."