A spokesman for Vanuatu's prime minister, Serge Vohor, says he believes granting diplomatic status to Taiwan will not undermine the relationship with China.
Mr Vohor secretly negotiated an arrangement with Taiwan two weeks ago, without the prior approval of the Council of Ministers.
The Council rejected the plan but Mr Vohor's spokesman Kal Moli, says the Ministers now back it.
Taiwan says it is to set up an embassy office in Port Vila within weeks and Mr Moli says Vanuatu wants both Taiwan and China to maintain embassies there.
"We want to be the first in the world to host first Taiwan and then host China. But if then China are placed in a situation where they will not agree, then they will have...or want to withdraw on their own will, but the Vanuatu government will not one day push them out of Vanuatu."
Kal Moli, a spokesman for the Vanuatu Prime Minister.