China and Honduras established diplomatic relations on Sunday, Chinese media reported.

The move comes a day after Honduras cut decades-long diplomatic relations with Taiwanese authorities on Saturday, local British newspaper South China Morning Post reported.

Chinese Foreign Minister Qin Gang and his Honduran counterpart Eduardo Enrique Reina signed an agreement on diplomatic recognition in Beijing, ending relations with Taiwan dating back to the 1940s.

The highly anticipated move comes days after the foreign minister of Honduras visited China to open ties with the world's most populous country.

The Honduran Ministry of Foreign Affairs said in a brief statement on Saturday that it recognizes the People's Republic of China as "the only legitimate government representing all of China" and that Taiwan is an "integral" part of Chinese territory.

China claims Taiwan is its territory without interstate ties, a position that Taipei rejects.

In a backlash, Taiwan accused Honduras of demanding exorbitant sums before being lured by Beijing.

Speaking in Taipei, Taiwanese Foreign Minister Joseph Wu claimed that hundreds of people had requested aid totaling $2.45 billion, including hospital and dam construction and debt write-off.

Taiwanese President Tsai Ing-wen said in a video statement that Taipei "will not compete with China on a pointless dollar diplomacy".

Both China and Honduras did not comment on the accusation in their respective statements.

Describing the Honduran offensive as a "sovereign decision", the US State Department said, "It was important to note that China often makes promises that cannot be kept in exchange for diplomatic recognition."

Currently, Taiwan has official diplomatic relations with only 13 countries, mostly from Central America, the Caribbean, and the Pacific.