The establishment of diplomatic relations between Costa Rica and the People's Republic of China offers opportunities to boost trade and for Chinese companies to use Costa Rica as their base of operations, former Central Bank president Eduardo Lizano said on Tuesday.

Lizano was attending a conference on the impact of the development of China's economy on Costa Rica.

Lizano said China's economic growth had been very high for the past 20 years and the country had transformed itself into a "world economic power, whose economy could be larger than Germany's this year to reach third place world wide, behind only the US and Japan."

"Costa Rica's participation in international economy production chains and in the growth of China represents a major opportunity," he added.

"The flow of trade would increase from China to Costa Rica and from Costa Rica to other nations, especially the US, above all if we can pass a free trade agreement," Lizano said.

China is Costa Rica's second largest trade partner. Costa Rica sales to China were US$1.08 billion in 2006 and reached US$628 million in the first half of 2007.

"China's expansion will allow Costa Rica to have better supplies of overseas goods and services, obliging local producers to compete in some important fields," he said.

Costa Rica's Foreign Minister Bruno Stagno, told the same forum that establishing relations with China, on June 1, is part of a process of seeking competition, creating larger markets and stronger relationships with the world, especially Asian nations.

He said that he was sure that normalizing relations with China was the right decision. "Most likely the 21st century will be Asia's century," Stagno said, "it would be sad if Costa Rica were not present... an active participant."

(Xinhua News Agency July 26, 2007)