Beijing : China and Costa Rica announced Thursday that they had agreed to establish diplomatic ties after the Latin American country agreed to break official relations with Taiwan.
Chinese experts believe the move may start a "domino effect" of Latin American countries officially recognizing over Taiwan as Chinese territory.
A joint communiquÃ©, signed on June 1 by Chinese Foreign Minister Yang Jiechi and his Costa Rican counterpart Bruno Stagno Ugarte, says the two governments, "in accordance with the interests and aspirations of the peoples of the two countries, agree to establish diplomatic ties at ambassadorial level beginning June 1, 2007."
"The Costa Rican government recognizes that there is only one China and the government of the People's Republic of China is the sole legitimate government representing the whole China. Taiwan is an inalienable part of the Chinese territory," it says.
Costa Rica established diplomatic relations with the then Chinese government ruled by the Kuomintang party in 1941. In 1949 the Kuomintang authorities moved to Taiwan and the People's Republic of China was founded.
"For Costa Rica this is an act of foreign policy realism that promotes links to Asia," said Costa Rican President Oscar Arias. "It is my responsibility to recognize a global player as important as the People's Republic of China."
Arias, who received the Nobel Peace Prize in 1987 for his efforts to end civil wars then in Central American countries, said his decision was based on the deep trade relationship between the two nations.
The Costa Rican government considers it essential to form a link with China, the world's largest emerging economy, Arias said.
Taiwan is now recognised by only 24 states, mostly small nations in Latin America and Central America.
The Costa Rican move could influence other nations in Central America and the rest of Latin America that maintain relations with Taiwan, said Xu Shicheng, a Latin America expert with the Chinese Academy of Social Sciences.
"The establishment of formal diplomatic ties between China and Costa Rica will probably bring about a domino effect," said Xu.
"More Latin American countries such as Nicaragua and Panama will reconsider their relationships with China," Xu said.
Official figures show soaring trade between the China and Costa Rica.
According to the communique, the Chinese and Costa Rican governments agree to "develop friendly cooperation".
The two countries have agreed to exchange ambassadors and assist in the establishment and operation of each other's embassies on an equal footing, it says.
Costa Rica is the 169th country to establish diplomatic relations with China.