China, which claims Taiwan as its own territory, has downgraded diplomatic ties with Lithuania and pressured multinationals to sever links with the nation of 2.8 million people after it allowed Taiwan to open a de facto embassy in Vilnius.

The corresponding office in Taipei will begin operations "in the nearest future", Lithuania's Ministry of Economy and Innovation said on Friday, though Taiwan's Foreign Ministry says it is already effectively in operation.

Speaking to reporters in Taipei, Lithuanian Vice Minister of Economy and Innovation Karolis Zemaitis said "very intense preparations" are taking place to open the office.

"Of course this is a very important step for us, for both democracies," he said.

Formally called the Lithuanian Trade Office in Taipei, it comes under Zemaitis' ministry and is headed by Paulius Lukauskas, previously an adviser to prime minister Ingrida Simonyte.

China has repeatedly denounced Lithuania's engagement with Taiwan, which it views as Chinese territory over the strong objections of the government in Taipei.

Last month, China imposed sanctions on Lithuanian Deputy Transport and Communications Minister Agne Vaiciukeviciute for visiting Taiwan.

Asked whether China has warned him not to go come, Zemaitis, who has been leading a 28-person business delegation to Taiwan this week, said he had not had contact with "any of the Chinese representatives".

Taiwan has sought to encourage Taiwanese investment in Lithuania and to import more goods from the country.

"I think we are right now very intensively working on the best possible economic outcome together with our Taiwanese colleagues and I think we're on a very, very good track," Zemaitis said.

"Of course when it comes to the overall market diversification which is important globally for many countries including European (ones), I think this is always a process that might take some time."