Costa Rican President Oscar Arias announced Wednesday that his country was establishing diplomatic relations with China, and the two countries announced on Thursday that they signed a joint communiqué on establishing diplomatic ties at ambassadorial level as of June 1st.

"It was the moment to take this decision," said Arias, speaking at the Presidential House with top members of his cabinet. "China is a reality that we can no longer ignore"/p>

"For Costa Rica this is an act of foreign policy realism which promotes our links to Asia. It is my responsibility to recognize a global player as important as the People's Republic of China. With this decision we join 178 nations in the United Nations that have recognized the People's Republic of China," Arias said. He said his decision was based on the deep trade relationship between the two nations. Costa Rica exports more than US$1 billion of goods to China each year. The joint communiqué was signed by Chinese Foreign Minister Yang Jiechi and Costa Rican Minister of Foreign Affairs Bruno Stagno Ugarte in Beijing on June 1.

The governments of the People's Republic of China and the Republic of Costa Rica, in accordance with the interests and aspiration of the peoples of the two countries, agree to establish diplomatic ties at ambassadorial level beginning June 1, 2007, the communiqué says.

"The Costa Rican government recognizes that there is only one China in the world 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.

This leaves Taiwan with 24 allies, mostly small and poor nations, compared with more than 170 countries that recognize Beijing.

"The establishment of diplomatic ties is in the interest of the two countries and people. It has paved the way for friendly and beneficial cooperation between the two sides," Chinese Foreign Ministry spokeswoman Jiang Yu said at a regular news conference in Beijing Thursday. Jiang said Taiwan was the "sole obstacle" confronting those countries. "We hope the relevant countries can follow the trend of the times and make the right choice."According to the communiqué, Chinese and Costa Rican governments agree to develop friendly cooperation based on the principles of mutual respect for sovereignty and territorial integrity, mutual nonaggression, non-interference in each other's internal affairs, equality and mutual benefits, and peaceful coexistence.

Costa Rica is the 169th country that has diplomatic relations with China. It established "diplomatic ties" with Taiwan in 1941.

Latin America, the South Pacific and Africa are the main diplomatic battlegrounds for Beijing and Taipei.

But China's expanding political and economic strength has meant a steady increase in Taiwan's diplomatic isolation around the world.

In Taipei, officials earlier Wednesday said they were doing "everything within our power" to maintain diplomatic relations with Costa Rica.

At the World Health Organization's assembly in May, Costa Rica voted "no" on Taiwan's membership bid.

Some 148 WHO member states rejected Taiwan's bid to join the body, while 17 others - mainly Taiwan's allies - supported it. Two countries abstained.