June 13 (UPI) -- The government of Panama announced Tuesday that it had severed diplomatic ties with Taiwan in favor of recognizing mainland China.
The Central American nation's decision further isolates Taiwan, as it reduces the number of countries that recognize it as the official government of China to just 19.
Most governments officially recognize only one of the two -- which both claim to be the ruling authority of China. Taiwan is formally called the Republic of China, while the vast nation that includes Beijing is known as the People's Republic of China. Each does not acknowledge the other's sovereignty.
"The Government of the Republic of Panama recognizes that there is only one China in the world," Panama and Beijing said in a joint statement. "The government of the People's Republic of China is the only legitimate government representing all China, and Taiwan is an inalienable part of the Chinese territory."
The two said they would begin ambassador-level relations immediately.
Panama's diplomatic shift to Beijing is in-line with what's known as the One China policy, which mandates only one to be recognized -- and necessitates a ceasing of relations with the other.
Taiwan responded to Tuesday's decision by saying it would pull its diplomatic staff in Panama City. It also accused Panama of caving in to economic pressure from Beijing.
"The ROC government strongly condemns Panama's act, and reiterates that it will not engage in checkbook diplomacy with the Beijing authorities," Taiwan's statement said.
Panama is a key partner to China, as the Panama Canal serves as a critical waterway for trade between the Pacific and Atlantic Oceans. The nations that recognize Taiwan are located in Latin America, Africa and Oceania.
The United States recognized Taiwan as the formal government before 1979, but switched to Beijing following a series of diplomatic improvements between the two countries in the 1970s. However, the U.S. government does recognize Taiwan as a Chinese state.
President Donald Trump indicated after he took office in January that his administration might not abide by the One China policy, but has since backed off that possibility following meetings with Chinese President Xi Jinping.