American Institute in Taiwan. AFP

The US unveiled a new $256m office in Taiwan’s capital on Tuesday, a de facto embassy that underscores Washington’s strategic ties with the democratic, self-ruled island as it faces escalating tensions with China.

Washington cut diplomatic ties with Taipei in 1979 but remains the island’s strongest ally and sole foreign arms supplier.

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It opened the American Institute of Taiwan (AIT) to conduct relations between the two sides after severing ties.

In comments certain to rile Beijing, Taiwan President Tsai Ing-wen said the new complex was a reaffirmation of both sides commitment to a “vital relationship.”

“The friendship between Taiwan and the U.S. has never been more promising. The great story of Taiwan-U.S. relations remains to be filled with the efforts of those that will one day occupy this building,” Tsai said.

She said so long as both sides stood together, nothing could come between them, adding that the new complex  will serve as the representative office later this summer.

Marie Royce, U.S. Assistant Secretary of State for Educational and Cultural Affairs, said at the ceremony to mark the unveiling that the complex was a symbol of the strength and vibrancy of the U.S.-Taiwan partnership.

“We have faced many trials along this journey, but we have risen to the challenge at every turn, knowing that our shared commitment to democracy would see us through,” said Royce.