The United States is ending restrictions governing official contacts with Taiwan, Secretary of State Mike Pompeo said Saturday, a move hailed by Taipei as ending "decades of discrimination".

Pompeo said the "complex internal restrictions" on contacts with Taipei by diplomats, service members and others had been imposed "in an attempt to appease the Communist regime in Beijing."

Pompeo added, "No more."

The declaration may be more symbolic than substantive in effect, but it nonetheless appears certain to anger China, which sees Taiwan as its own territory.

Taiwan's government welcomed the move.

"Decades of discrimination, removed," tweeted Hsiao Bi-khim, Taiwan's diplomatic envoy to the States. "A huge day in our bilateral relationship. I will cherish every opportunity."

Foreign minister Joseph Wu said he was grateful Pompeo had lifted "restrictions unnecessarily limiting our engagements".

"The closer partnership between Taiwan and the US is firmly based on our shared values, common interests and unshakeable belief in freedom and democracy," he added.

It comes in the final weeks of the Donald Trump administration, and at a time of already heightened tensions between Beijing and both Washington and Taipei.

It was not clear what the change means in practice, with Pompeo saying executive branch communications with Taiwan will be handled by the American Institute in Taiwan (AIT), which is owned by the US government and serves as the de facto embassy.

The shift comes after a year of mounting US-Chinese tensions.

This file photo shows US Secretary of State Mike Pompeo speaking in Atlanta, Georgia on December 9, 2020
This file photo shows US Secretary of State Mike Pompeo speaking in Atlanta, Georgia on December 9, 2020 AFP / Tami Chappell

Trump has sent multiple senior officials to Taipei over the last year as he clashed with China on a host of issues, ranging from its handling of the coronavirus pandemic to disputes over trade, security and human rights.

Pompeo's statement also came just two days after China warned the United States it would pay a "heavy price" if its United Nations ambassador, Kelly Craft, made good on plans to travel to Taiwan on Wednesday.

Beijing opposes any diplomatic recognition of Taiwan and has tried to keep the democratic island isolated on the world stage.

Craft's scheduled three-day visit will come just a week before Joe Biden's inauguration as US president, adding to a string of diplomatic headaches facing the incoming administration.

"China strongly urges the United States to stop its crazy provocation, stop creating new difficulties for China-US relations... and stop going further on the wrong path," the Chinese mission to the UN said in a statement responding to Craft's trip.

An American statement said Craft's visit, which Taiwan has officially welcomed, would "reinforce the US government's strong and ongoing support for Taiwan's international space."

The AIT was founded in 1979, when the United States extended diplomatic recognition to mainland China under a historic agreement requiring it to end formal recognition of Taiwan.

But Washington remains a staunch ally of Taipei and is bound by Congress to sell it weapons for self-defense. It opposes any move to change Taiwan's current status by force.

Military tensions between mainland China and Taiwan have grown sharper in the past year -- reaching their worst since the mid-1990s, some analysts say.

Chinese jets made a record 380 incursions into Taiwan's defense zone last year, a military official said Tuesday.

Beijing's animosity has increased dramatically since Tsai Ing-wen won election as Taiwan's president in 2016; she rejects Beijing's insistence that the island is part of "one China."