Costa Rica's President Oscar Arias said on Thursday his country established diplomatic relations with China and broke ties with Chinese province Taiwan for the "economic well-being of Costa Ricans".

    In an interview with the local Radio Monumental network, Arias expressed his confidence in the future signing of a Free Trade Agreement (FTA) between his country and China.

    Costa Rica could not ignore China's potential 1.3-billion people market, he said.

    "China sits in the United Nations Security Council and is soon expected to be the second (economic) world power," Arias said.

    "Our embassy in Beijing will be the second most important, after Washington," Arias added.

    Arias announced on Wednesday the establishment of diplomatic relations with China and breaking ties with China's Taiwan province.

    Costa Rica and China established diplomatic relations on June 1 during the visit to Beijing by Costa Rica's Foreign Minister Bruno Stagno and Treasury Minister Guillermo Zuniga, Arias said.

    A joint communique signed on June 1 by Chinese Foreign Minister Yang Jiechi and his Costa Rican counterpart Bruno Stagno says "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."

    "We need to increase our investment and trade relations with China, as of today we do not have any Chinese investment in Costa Rica because we did not have diplomatic relations (with China)," Arias said.

    Arias said the establishment of diplomatic relations with China and breaking ties with Taiwan reflected his country's "realistic" foreign policy