TEGUCIGALPA, March 15 (AFP) - Economic necessity and Taiwan's refusal to increase financial aid were behind Honduras' decision to establish diplomatic ties with China, Foreign Minister Eduardo Reina said on Wednesday (Mar 15).

Honduras President Xiomara Castro announced on Tuesday that she had instructed Reina to "undertake the official opening of relations" with China, thus severing the Central American country's long-standing diplomatic relationship with Taiwan.

Speaking to the Canal 5 television channel, Reina said that Honduras had proposed "more important relations given the great needs of the Honduran people", but Taiwan had refused.

Honduras is one of the poorest countries in the region with almost 74 per cent of its near 10 million population living in poverty.

Reina said Honduras had asked Taiwan to double its US$50 million a year of aid and also explore "realigning" its US$600 million debt to the island, but did not receive positive responses.

Honduras and Taiwan had maintained diplomatic ties for more than 80 years.

Under Beijing's "One China" principle, no country may maintain official diplomatic relations with both China and Taiwan.

Honduras is one of only 14 countries that officially recognise Taiwan, a self-ruled island that China considers part of its territory to be retaken one day, by force if necessary.

The switch - which Castro pledged to make before she was elected in 2021 - comes weeks after her government announced it was negotiating with China to build a hydroelectric dam.

Reina said that Honduras has needs in energy, social policies and servicing its debt, which is "drowning the country".

He said that Honduras paid US$2.2 billion last year and must pay another US$2.3 billion this year for its external and internal debt, which amounts to US$20 billion.

Reina added that "171 countries in the world have relations with continental China" and the economic reality was that Honduras "had to take that decision".

"The idea is to look for mechanisms for greater investment (and) commerce," he added.

It continues a recent trend in the region, with Nicaragua, El Salvador, Panama, the Dominican Republic and Costa Rica all switching diplomatic recognition to Beijing.