China and Costa Rica were to launch free trade talks here Monday in a historic visit by Chinese President Hu Jintao at the start of a Latin America tour including Cuba and Peru.

China has increased diplomacy and investment in the region in recent years, with an eye on natural resources and developing markets for manufactured goods and even arms.

The Costa Rican capital, normally heaving with traffic, was partially closed for the highest-level visit by a Chinese official to the country, just over a year after it gave up six decades of ties with Taiwan.

Hu, who arrived with scores of businessmen and Communist Party officials on Sunday, was due to announce the start of talks for a joint, free trade accord with Costa Rican President Oscar Arias Monday morning.

They were also due to sign 11 cooperation deals, from building a joint oil refinery to setting up a Chinese language institute.

`The free trade agreement is very important for China, considering the strategic importance of Costa Rica for both the Caribbean and Central America,` said Wang Xiaoyuan, the Chinese ambassador here.

Costa Rica, a major exporter of computer components, has dismissed fears of an invasion of Chinese products into the country of some four million under the free trade deal, which could be signed in 2010, diplomats said.

The trade balance has favored Costa Rica up until now, with 803 million dollars of exports up to September this year, compared with 671 million dollars of Chinese imports. China, however, deals in a much more diverse range of products.

Costa Rica would be the third Latin American country to negotiate a free trade deal with China, after Chile and Peru, which has not yet concluded its accord.

Costa Rica broke off more than 60 years of relations with Taiwan when it became the first Central American country to begin 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 seen its allies fall over the 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.

Hu was to travel to Cuba late Monday, before attending an Asia-Pacific summit in Peru on November 22.

The Chinese leader was to promote Communist and economic ties on his second visit to the communist island, days 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 breakup of the former Soviet Union, forging a divide with Russia.

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

Current deals include Chinese oil prospection and extraction on and off Cuba and two Cuban eye hospitals in China and a third under construction.