Costa Rica Breaks Relations with Taiwan
President Oscar Arias announced Wednesday that Costa Rica has broken diplomatic ties with Taiwan and established relations with China, delivering a blow to Asian island's fragile international standing.

Arias said Costa Rica needed to strengthen ties with China to attract foreign investment.

Taiwanese Foreign Minister James Huang quickly offered to resign to take responsibility for Costa Rica's switch, which has left Taiwan with relations with just two dozen nations.

"We are looking to strengthen the commercial ties and attract investment," Arias said. "China is the most successful emerging economy in the world and soon it will be the second strongest economy in the world after the United States."

Central America and Costa Rica in particular has been a mainstay of support for Taiwan, and Taiwan had expressed fears that if Costa Rica were to shift its recognition to Beijing, other nations such as Nicaragua and Panama could soon follow suit.

China spends heavily to induce nations to change diplomatic allegiances, offering investment, loans and other incentives.

Arias said China is the Central American nation's No. 1 trading partner, buying more than us$1 billion worth of Costa Rican exports last year.

"Taiwan has been very generous and I thank it for the solidarity and co-operation it has shown for nearly 60 years, but I have taken this decision thinking of all the Costa Ricans," Arias said.

The change is just one more strike against Taiwan in its campaign for international legitimacy. Its high water mark came in the late 1960s when it had full relations with 67 countries, including the United States and much of western Europe. But within a decade, the U.S. pulled it embassy out of the Taiwanese capital. And today, just 24 states recognize Taiwan.

The United States, Japan, Great Britain and dozens of others maintain quasi-official ties with Taiwan — part of a diplomatic sleight of hand to honor Beijing's condition that full diplomatic recognition be accorded to only one of the rivals.

However, Beijing resents even the quasi-official ties. Its main concern is the United States, which remains Taiwan's most important foreign connection, providing it weapons to defend itself against a possible Chinese attack.

At a press briefing shortly after Costa Rica's announcement, Huang, Taiwan's foreign minister, offered to resign.

"I went to President Chen (Shui-bian) ... and asked to resign to take political responsibility," Huang told reporters.

Huang did not say if his offer was accepted.

Taiwan has been concerned about a deterioration of its relations with Costa Rica since May 14, when the Costa Rica voted at an international health conference against holding a discussion on proposed Taiwanese membership in the World Health Organization.

On May 25, Huang met with officials from Costa Rica and four other Latin American countries in Belize City in an effort to shore up Taiwan's diplomatic standing in the region.

Arias declined to comment on whether his decision could encourage other Central American nations to transfer their allegiance from Taipei to Beijing.

"I won't speculate on the consequences of this decision in the rest of Central American because I made it thinking about Costa Rica," he said.

Salvadoran President Tony Saca said Wednesday that his nation was interested in establishing relations with China but did not want to sever ties with Taiwan.

"Taiwan is an independent country that has won its space and we will going maintaining relations with Taiwan. If China accepts this we will open relations with pleasure," Saca said.