Taiwan has said it is terminating diplomatic relations with the Solomon Islands "with immediate effect" after the Government there voted to change its allegiances and recognise China.

Key points: Beijing is promising Solomon Islands millions of dollars in development funds

Beijing is promising Solomon Islands millions of dollars in development funds Taiwan condemned the decision, which it blames on "dollar diplomacy"

Taiwan condemned the decision, which it blames on "dollar diplomacy" Solomon Islands is the sixth country to cut ties with Taiwan since 2016

The move is a new blow to Taiwan's President Tsai Ing-wen, who is seeking re-election in January amid rising tension with China.

Taiwan now has formal relations with only 16 countries worldwide, but China claims Taiwan as its territory and says it has no right to formal ties with any nation.

The move came after a months-long review in Solomon Islands looking at the pros and cons of switching its diplomatic ties to Beijing, which was offering millions of dollars in development funds to replace support from Taiwan.

Announcing the decision to terminate relations with Solomon Islands, Ms Tsai hit out at the financial offers made by Beijing.

"We sincerely regret and strongly condemn [the Solomon Islands] Government's decision to establish diplomatic relations with China," she told reporters.

"Taiwan will not engage in dollar diplomacy with China in order to satisfy unreasonable demands."

"This is not how Taiwan approaches its diplomacy, not to mention the fact that China's promises of financial assistance often come up empty."

Ms Tsai said unfinished cooperation projects in Solomon Islands would also end. ( Office of the Taiwanese President )

Taiwan's foreign minister Joseph Wu said it would immediately close down its embassy in the Solomon Islands and recall all of its diplomats.

Mr Wu said China was aiming to meddle with Taiwan's presidential and legislative elections in January, and urged allies in the region to defend Taiwan's much-valued freedom and democracy.

"Taiwan has never bowed to pressure from one single setback, and it won't be defeated by this blow," he said.

The move also had ramifications in Washington, as Republican senator Marco Rubio tweeted that he wanted to explore ways for the US to cut off ties with the Solomons.

"Now I will begin exploring ways to cut off ties with #SolomonIslands including potentially ending financial assistance & restricting access to US dollars and banking," he wrote.

The office of Solomon Islands Prime Minister Manasseh Sogavare did not immediately respond to questions.

Ms Tsai recently visited the Pacific region to shore up relations with Taiwan's allies there. ( Supplied: Office of the President of Taiwan )

Solomon Islands is the sixth country Taiwan will lose as a diplomatic ally since Ms Tsai came to office in 2016 — following Burkina Faso, the Dominican Republic, Sao Tome and Principe, Panama and El Salvador.

Ms Tsai, who's facing an uphill battle in January's vote, has been criticised over her handling of Beijing, which suspects her of pushing for Taiwan's formal independence

Taiwan 'strongly condemns' switch

In a strongly-worded statement, Taiwan's Ministry of Foreign Affairs said Mr Sogavare and his cabinet made the decision based on a "highly biased" report from a government taskforce which had been charged with assessing the diplomatic relationship.

"The Government of the Republic of China [Taiwan] finds this decision extremely regrettable and strongly condemns it," the statement said.

"Prime Minister Sogavare has not only broken his own public promise, but also disregarded the fruits of the 36 years of cooperation between Taiwan and Solomon Islands."

The statement went on to allege China attempted to "buy off" officials in Solomon Islands.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 5 minutes 13 seconds 5 m James Batley, a former Australian High Commissioner to Solomon Islands, said the decision would surprise few.

"[China] has once again resorted to dollar diplomacy and false promises of large amounts of foreign assistance to buy off a small number of politicians, so as to ensure that the Government of Solomon Islands adopted a resolution to terminate relations with Taiwan."

James Batley, a former Australian high commissioner to Solomon Islands, told the ABC's The World program the decision was widely expected.

"I don't think any of Solomon Islands' neighbours, and that includes Australia, will really be surprised by this decision," he said.

"Politics in Solomon Islands is essentially about access to resources, and the control of resources, and I think that's ultimately what has motivated this decision."

Solomons MP Peter Shanel Agovaka told a parliamentary committee earlier this month that after four decades of independence and a long-term alliance with Taiwan, it was time to make a change.

"We cannot sit for the next 40 years with our friends Taiwan. It is time that we make new friends — it's time that we should move on with our life," Mr Agovaka said, according to a recording obtained by Reuters.

"Our new relationship will deal with a One China policy; a One China policy that recognises only Beijing as the official government administration," he said.

'Completely useless to us'

Mr Sogavare recently said his country's ties with Taiwan did not provide economic or political benefits. ( AAP: Darren England )

News of the end of diplomatic ties between Solomon Islands and Taiwan comes after a series of blunt assessments of the relationship from Mr Sogavare in recent months.

"To be honest, when it comes to economics and politics, Taiwan is completely useless to us," Mr Sogavare said in an interview with the Australian National University's Little Red Podcast in July.

Beijing could assist the Solomon Islands to "establish a military force", he said, something that Taipei was incapable of doing.

"In terms of economics and geopolitics, we cannot flex our muscles. So they [Taiwan's Government] are completely useless to us in that sense."

The Pacific remains one of Taiwan's last bastions of diplomatic support, with five nations in the region — Kiribati, Marshall Islands, Nauru, Tuvalu and Palau — recognising Taipei rather than Beijing.

Taiwan donates large amounts of aid to these countries, and works hard to cultivate relationships with their political leaders. But China has been intent on prising off Taiwan's remaining allies, offering loans and other development funds.

In addition to perceived financial benefits, many Pacific Island countries feel a relationship with China gives them diplomatic leverage with traditional partners like Australia, given the current geopolitical climate.

Chinese officials had been actively courting Solomon Islands' politicians to get rid of Taiwan and sign up to Beijing's Belt and Road Initiative, just like its Pacific Island neighbours Fiji, Papua New Guinea and Vanuatu.

Mr Batley said he did not think other countries in the Pacific would necessarily follow suit, however winning over Solomon Islands was a "big prize" for China.

ABC/Reuters