China on Thursday welcomed the re-establishment of formal ties between the US and Cuba, despite the move representing a reconciliation between Beijing's longstanding Communist ally and its greatest diplomatic rival, Xinhua News Agency reported.

Washington and Havana on Wednesday agreed a historic deal to re-establish full diplomatic relations, severed 54 years ago in the heat of the Cold War.

Presidents Barack Obama and Raul Castro exchanged letters agreeing to unfreeze ties on July 20, when embassies can be reopened.