SAN JOSE: Chinese President Hu Jintao began a Latin America tour with the launch of free trade talks with Costa Rica on Monday, just over a year after the country gave up six decades of ties with Taiwan.

Hu's stopover was the highest-level visit by a Chinese official to Costa Rica and came as China expands its missions to the whole continent, with an eye on natural resources and developing markets for manufactured goods and even weapons.

Hu arrived in San Jose Sunday, from a G20 summit in Washington, and was to leave on Monday for his second visit to communist ally Cuba, before attending an Asia-Pacific summit in Peru on November 22.

Costa Rican "President Oscar Arias and I agreed to start bilateral negotiations for a free trade deal," Hu told reporters at a joint news conference. Talks were due to start January 19, 2009, in San Jose and end in 2010.

Hu and Arias, who visited China last year, also oversaw the signing of 11 cooperation deals, from building a joint oil refinery to setting up a Chinese language institute and opening a line of 40 million dollars in credit from China.

Hu's symbolic visit made the point that Central America was no longer a Taiwanese stronghold, after Costa Rica became the first country in the region to establish diplomatic ties with China on June 1, 2007.

Both Taiwan - a democratic self-ruled island that Beijing considers part of its territory awaiting reunification - and China have been accused of using so-called "dollar diplomacy" to get nations to ally with them.

But Taiwan has lost allies in recent years.

Part of China's incentives for Costa Rica's recognition came from its enormous foreign exchange reserves with an offer to buy 300 million dollars in bonds. It also donated 73 million dollars to build a new national stadium.

Costa Rica is only the third Latin American country to negotiate a free trade deal with China, after Chile and Peru, which may conclude its accord during Hu's visit later this month.

A major exporter of computer components, Costa Rica has dismissed fears of an invasion of Chinese products into the country as it seeks to diversify ties amid worldwide financial woes.

Its main trade partner, as for many Latin American countries, is the United States.

Arias, a Nobel Peace Prize winner, said the two leaders had not touched on China's widely criticised human rights record.

"I used the opportunity to speak of things that are important and urgent for Costa Rica," Arias said.

Hu was to travel to Cuba on Monday, less than two weeks before the arrival of Russian President Dmitry Medvedev.

China offered key support to former Cuban leader Fidel Castro when Cuba fell into dire economic straits after the 1991 break-up of the former Soviet Union, forging a divide with Russia.

China was Cuba's second business partner, after Venezuela, in 2007.

"This visit is an expression of the excellent existing links between both parties and governments," said an official statement published in Granma daily on Monday.

Current deals include Chinese oil prospecting and extraction in Cuba - onshore and offshore - and two Cuban eye hospitals in China and a third under construction. - AFP/de