Taipei: The Pacific island nation of Kiribati has become the second country this week to sever ties with Taiwan and switch diplomatic recognition to China.
According to the media report, the move comes four days after the Solomon Islands cut ties, leaving Taiwan with fewer allies in the region.
Beijing considers Taiwan to be a part of China and says it should unite with the Chinese mainland.
Only 15 countries now recognise the self-governing territory of Taiwan as a sovereign nation.
Taiwanese Foreign Minister Joseph Wu said that Beijing had used "dollar diplomacy" to poach one of Taiwan's last remaining allies by providing funds to procure several aeroplanes and ferries.
China is trying to "suppress and reduce Taiwan's international presence" and "ultimately destroy Taiwan's sovereignty", Wu said.
Since Tsai Ing-wen was elected the Taiwanese president in 2016, Taiwan has lost seven diplomatic allies. She is seeking re-election in January.
China has proposed that Taiwan be governed under a "one country, two systems" structure similar to Hong Kong.
Wu said that Kiribati's President had asked Taiwan to donate money to purchase commercial aeroplanes.