Taiwan accused China of using Sao Tome and Principe's financial woes to push its "one China" policy after the small West African state ended ties with the self-ruled island, with Taipei saying the move would not help relations across the Taiwan Strait.
China's claims to Taiwan have shot back into the spotlight since U.S. President-elect Donald Trump broke diplomatic protocol and spoke with Taiwan President Tsai Ing-wen earlier this month, angering Beijing.
Trump has also questioned the "one China" policy which the United States has followed since assuming relations with Beijing in 1979, under which Washington acknowledges China's position that Taiwan is part of China.
The election of Tsai from the pro-independence Democratic Progressive Party earlier this year infuriated Beijing, which suspects she wants to push for the island's formal independence, though she says she wants to maintain peace with China.
Taiwan Foreign Minister David Lee said Taipei would not engage in "dollar diplomacy" after Sao Tome's decision.
"We think the Beijing government should not use Sao Tome's financing black hole ... as an opportunity to push its 'one China' principle," Lee told a news conference in Taipei on Wednesday. "This behavior is not helpful to a smooth cross-Strait relationship."