President Oscar Arias announced June 6 that Costa Rica has broken diplomatic ties with Taiwan and established relations with China.Arias said Costa Rica needed to strengthen ties with China to attract foreign investment. Foreign Minister James Huang in Taiwan quickly offered to resign to take responsibility for Costa Rica's switch, which left the Taiwan with relations with just two dozen nations.
Central America has been a bulwark 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.
"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. (Source: Marianela. Jimenez and Peter Enav, AP,unJune 7, 2007).