A security studies professor says China has been applying pressure to countries to switch diplomatic ties over from Taiwan, but Beijing says its "ready to work" with the Pacific island nation "to open new chapters" in the relations between the two countries.
The Nauru government said that "in the best interests" of the country and its people, it was seeking full resumption of diplomatic relations with China.
China claims Taiwan as its own territory with no right to state-to-state ties, a position Taiwan strongly disputes.
Anna Powles, an associate professor at the Massey University Centre for defence and security studies, told RNZ this is not Nauru's first rodeo - this is the third time they have jumped ship.
"China, certainly, has been on the offensive to effectively dismantle Taiwan's diplomatic allies across the Pacific," Powles said.
"There has been increased Chinese pressure - that was certainly one of the reasons why Australia pursued their Falepili union agreement with Tuvalu last year with great speed," she said.
Nauru severs diplomatic ties with Taiwan
Taiwan now has three Pacific allies left: Palau, Tuvalu and the Marshall Islands.
Powles said that was a significant drop from 2019 when Solomon Islands and Kiribati switched allegiance.
But she said the switch should not come as a major surprise, most countries including New Zealand, Australia, and the United States, recognise China and adhere to the One-China policy.
"Nauru is like most other Pacific Island countries, recognising China over Taiwan.
"The challenge here though for Taiwan is for very long period of time, the Pacific was the bulkhead of its allies, and as I mentioned, China has effectively and very successfully managed to whittle that down and dismantle that network.
"For many of those countries in the Pacific which have switched back and forth between the two, this actually hasn't contributed in positive ways to sustainable, consistent growth and development."
Powles said there were still questions to be answered.
Nauru set up its intergenerational fund in 2015, with Australia, New Zealand and Taiwan as contributors.
"So the question here is, will China now be a contributor to the trust fund?"
Lai Ching-te from Taiwan's ruling Democratic Progressive Party, or DPP, won the presidential election on Saturday as expected and will take office on 20 May.
"With deep regret we announce the termination of diplomatic relations with Nauru," Taiwan's Foreign Affairs Ministry said on social media platform X (formely Twitter).
"This timing is not only China's retaliation against our democratic elections but also a direct challenge to the international order. Taiwan stands unbowed & will continue as a force for good," it added.
China 'ready to work'
China's Foreign Ministry spokesperson Hua Chunying said that Beijing "China appreciates and welcomes the decision of the government of the Nauru".
"There is but one China in the world, Taiwan is an inalienable part of China's territory, and the government of the People's Republic of China is the sole legal government representing the whole of China.
She said this was affirmed in the United Nations General Assembly Resolution 2758 "and is the prevailing consensus among the international community".
"China has established diplomatic relations with 182 countries on the basis of the one-China principle. The Nauru government's decision of re-establishing diplomatic ties with China once again shows that the One-China principle is where global opinion trends and where the arc of history bends.
"China stands ready to work with Nauru to open new chapters of our bilateral relations on the basis of the one-China principle."