Tuvalu has reportedly rejected offers from Chinese firms to build artificial islands that would help it deal with rising sea levels
Tuvalu's foreign minister Simon Kofe told Reuters he saw the offers as an attempt to reduce Taiwan's influence in the region.
Tuvalu is one of four Pacific nations that recognises Taiwan as a soverign nation which China regards as a rebel province.
China refuses to have diplomatic relations with any country that recognises Taiwan.
Mr Kofe said his nation was setting up a group to unite Taiwan's four remaining Pacific allies - the Marshall Islands, Palau, Nauru and Tuvalu.
In October, Tuvalu's prime minister said his country was looking to Japan for assistance to create an artificial island.