BEIJING, Dec 14 (Reuters) - The prime minister of Grenada, which has diplomatic relations with Taiwan, has met Chinese leaders in Beijing, the foreign ministry said on Tuesday, fuelling speculation it might switch allegiance. China considers Taiwan a breakaway province that must be reunified with the mainland, by force if necessary. The two sides have been diplomatic and ideological foes since their split at the end of the Chinese civil war in 1949. The United States switched diplomatic recognition from Taiwan to China in 1979. Only 27 states now recognise Taiwan, most of them small, less developed countries. Keith Mitchell, prime minister of the nutmeg-producing Caribbean island, met Chinese Deputy Foreign Minister Zhou Wenzhou and Foreign Minister Li Zhaoxing, a sign China was trying to woo Taiwan's diplomatic allies. "We hope that China can resume diplomatic relations with Grenada," Foreign Ministry spokesman Liu Jianchao told a news briefing. "I believe that if the relationship could be resumed, the normal economic and trade exchange between China and Grenada can be developed more efficiently." Liu said the only precondition was Grenada's cutting ties with Taiwan, which China seeks to isolate internationally with its one-China policy. China and Taiwan accuse each other using promises of cash to court allies and although Liu would not give details of any aid, Grenada has been looking to fill financial gaps since its tourism and agriculture industries were devastated in September by Hurricane Ivan. "CAN'T PAY, WON'T PLAY" Taiwan's foreign ministry said it was aware of Mitchell's visit but would not engage in dollar diplomacy. "We know Grenada is trying to use its engagement with mainland China to force Taiwan to pay more money," foreign ministry spokesman Michel Lu said. "But if they ask us to offer economic aid we couldn't afford, then sorry, we will not play the money game with mainland China," he said. "We are prepared for the worst." Mitchell's visit comes on the heels of the defeat of Taiwan President Chen Shui-bian's party in legislative elections, an outcome which is likely to cool his moves towards asserting Taiwan's sovereignty. It also follows months of confusion over whether the tiny Pacific island of Vanuatu was dropping its relationship with China in favour of Taiwan. Former Vanuatu Prime Minister Serge Vohor advocated giving diplomatic recognition to Taiwan, but fell out of favour with his ministers over the deal, prompting them to oust him in favour of Ham Lini this week, Australian radio reported. "The (new) prime minister reiterated his commitment to the one-China policy and the stance of not developing relations with Taiwan authorities and revoking all agreements signed with Taiwan on November 3," Liu said. He also issued a reminder that China viewed the one-China policy as key to its diplomatic relations. "In reality there is only one China. Taiwan is an inalienable part of China. The one-China policy is the foundation of friendly relations between China and the rest of the world," Liu said. (Additional reporting by Alice Hung in Taipei) Reprinted from Alertnet.org/Reuters