Nauru, the South Pacific state that broke diplomatic relations with Taiwan last year, has accepted a loan worth about US$2.4 million from China.
Nauru President Rene Harris said yesterday his impoverished country of 12,000 people had accepted the interest-free loan to help support unspecified economic and technical projects between the two countries.
Nauru has been caught in a long-running diplomatic tug-of-war between China and Taiwan, which previous Nauru presidents had chosen to recognize in exchange for loans worth millions of dollars.
"This agreement demonstrates the strengthening of the friendly relations as well as economic and technical cooperation between Nauru and China," Harris said in a statement released in Australia.
"The agreement has come at a crucial time for the Republic of Nauru and my government is grateful for China's recognition of development opportunities in this country," he said.
Nauru closed its embassy in Beijing in August, sparking fears it might be about to re-establish diplomatic ties with Taiwan. It later said the mission was closed for economic reasons.
Nauru switched its recognition to Beijing from Taipei in August last year.
Nauru, a tiny 21km2 island pockmarked by the ravages of phosphate mining, is reliant on foreign aid and is also renowned for its constant changes in leadership.
Harris returned to power in August, the fourth change of government this year.
Taiwan's Ministry of Foreign Affairs declined to comment on the loan.
A ministry spokesman said the ministry is still not clear about the diplomatic move between China and Nauru.
The spokesman said the ministry would not respond to the move unless its counterpart in China made comments on the monetary aid.
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