El Salvador on Tuesday established diplomatic ties with China while severing its relations with Taiwan, the Chinese and Taiwanese governments said, the latest blow to the self-governed island's quest for international recognition.

Chinese Foreign Minister Wang Yi and his Salvadoran counterpart Carlos Castaneda signed a document in Beijing on Tuesday to build diplomatic ties between the two nations.

"El Salvador has acknowledged that there is one China in the world and that Taiwan is China's territory," Wang told reporters.

(Salvadoran Foreign Minister Carlos Castaneda, left, and his Chinese counterpart Wang Yi)

Castaneda, meanwhile, said the purpose of establishing diplomatic relations with China is "to upgrade the living standard of the people," expressing hopes for cooperation with the Asian superpower in trade, investment and infrastructure fields.

The move reduces the number of countries maintaining full diplomatic ties with Taipei to just 17.

El Salvador is the third country to break off diplomatic ties with Taiwan this year in favor of China, following the Dominican Republic in the Caribbean and Burkina Faso, a West African country, in May. It is also the fifth country to do so since President Tsai Ing-wen came to power in Taiwan in May 2016.

Taiwan Foreign Minister Joseph Wu revealed in the morning that El Salvador had sought "huge funding" for a port development project, but that Taiwan was reluctant to respond to the request.

"Our government is unwilling to use dollar diplomacy to compete with China," Wu said, indicating that Beijing's ample financial resources played a role in luring away El Salvador. "It is irresponsible and impossible."

He added that El Salvador's ruling party, which is trailing the opposition in opinion polls, desperately needs funding for its campaign for February's presidential election.

(Joseph Wu)

Tsai, who just returned from a state visit to Paraguay and Belize Monday night, told an emergency press conference Tuesday that the more China suppresses Taiwan, the more unified the island will become and the more determined it will be to play a role in the international arena.

Saying the incident was not an isolated case, Tsai called on all parties to work together to safeguard Taiwan's sovereignty and dignity.

To the international community, Tsai said the problems Taiwan has with China are similar to those faced by the Asian region and the world as China is attempting to challenge and even reconstruct the current international order.

"The situation is so bad that we cannot appease China any further," Tsai said.

Taiwan and mainland China have been governed separately since they split amid a civil war in 1949. Beijing has since then endeavored to diplomatically isolate Taiwan, which it regards as a renegade province awaiting reunification.

China has stepped up such efforts, particularly since Tsai, who belongs to the independence-leaning Democratic Progressive Party, assumed office.

Taiwan and El Salvador established diplomatic ties in 1941. Tsai visited the Central American country in January 2017.