TAIPEI (REUTERS) - Taiwan has opened a representative office in Guyana in South America, the island's foreign ministry said on Thursday (Feb 4).

The announcement drew praise from the United States which has worried about deepening Chinese influence in Latin America.

The former British colony is strategically located next to strife-torn Venezuela, a major Chinese ally with which Guyana has a bitter territorial dispute.

Taiwan's foreign ministry said it had signed an agreement with Guyana's government on Jan 11 to open a Taiwan Office, in effect a de facto embassy for the island that China claims as its sovereign territory with no right to diplomatic ties.

The ministry said the office had begun initial operations on Jan 15, noting that Guyana is a country with rich mining and oil resources and its capital Georgetown is the seat of the secretariat for the Caribbean Community.

Guyana has traditionally had close ties with China.

Foreign Minister Hugh Todd said what is being set up is a trade and investment office in Georgetown to "create space" for the private sector in Taiwan and Guyana to do business.

"Guyana is not recognising Taiwan as an independent state. Guyana is not establishing diplomatic relations with Taipei," he said.

The US embassy in Guyana said it applauded the agreement.

"Deepening ties between Guyana and Taiwan will advance their shared goals of prosperity and security," it said in a statement. "Closer ties with Taiwan will advance cooperation and development in Guyana on the basis of shared democratic values, transparency, and mutual respect."

Chinese Foreign Ministry spokesman Wang Wenbin said Beijing hoped Guyana would not engage in official ties with Taiwan, calling on the country to "earnestly take steps to correct their mistake".

Taiwan only has formal diplomatic relations with 14 countries, with Paraguay its sole remaining ally in South America.

The US has been angered by China slowly taking away Taiwan's support in the region.

In 2018, the US attacked El Salvador's decision to ditch diplomatic ties with Taiwan in favour of China, saying the change was of grave concern to Washington and warning that China was offering economic inducements to seek domination.