Taiwan's leader Tsai Ing-wen addresses during an inauguration ceremony in Taipei, Taiwan on May 20, 2016. Photo: Reuters

China's Foreign Ministry said on Wednesday it welcomed an announcement from the small west African country of Sao Tome to end diplomatic relations with self-ruled Taiwan.

"We have noted the statement from the government of Sao Tome and Principe on the 20th to break so-called 'diplomat' ties with Taiwan. China expresses appreciation of this, and welcomes Sao Tome back onto the correct path of the 'one China' principle," the ministry said in a statement.

However, the ministry did not say explicitly that China had now established relations with the former Portuguese colony.

China says Taiwan has no right to diplomatic recognition as it is part of China, and the issue is an extremely sensitive one for Beijing.

Defeated Nationalist forces fled to Taiwan at the end of a civil war in 1949 and Beijing has never renounced the use of force to bring Taiwan under its control.

In Africa, only Burkina Faso and Swaziland now maintain formal ties with Taiwan.

China resumed relations with another former Taiwan ally in Africa, The Gambia, in March, though The Gambia had severed its relations with Taipei back in 2013.

China and Taiwan had for years tried to poach each other's allies, often dangling generous aid packages in front of leaders of developing nations.

But they began an unofficial diplomatic truce after signing a series of landmark trade and economic agreements in 2008 following the election of the China-friendly Ma Ying-jeou as Taiwan's leader.

The election in Taiwan of Tsai Ing-wen 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.

Sao Tome and Principe's tiny island economy is heavily dependent on cocoa exports but its position in the middle of the oil-rich Gulf of Guinea has raised interest in its potential as a possible future oil and gas producer.

Diplomatic sources in Beijing have previously said Sao Tome was likely high on China's list of countries to lure away from Taiwan.

In 2013, Sao Tome said China planned to open a trade mission to promote projects there, 16 years after it broke off relations over Sao Tome's diplomatic recognition of Taiwan.