The Chinese Ministry of Commerce confirmed in a statement on Thursday that China and Nicaragua have officially signed a free trade agreement on August 31. 

The deal was penned by Chinese Commerce Minister Wang Wentao and Nicaraguan presidential advisor on investment, trade, and international cooperation, Laureano Ortega Murillo.  

Talks on a free trade agreement between both nations launched in July 2022 as China's Ministry of Commerce described the possibility of the deal to have "a high level of mutual openness in such areas as trade in goods, services and access to investment markets."  

That followed after Nicaragua recognized China as a "single territory" back in December 2021, on the basis of "only one China" in the world, and continued to sever all ties with Taiwan.

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"The People's Republic of China is the only legitimate government representing all of China, and Taiwan is an inalienable part of Chinese territory," Foreign Minister Denis Moncada said at the time. 

Afterward, a communiqué between China and Nicaragua was signed to restore diplomatic relations.

In January 2022, China reopened its embassy in Nicaragua just weeks after the latter switched diplomatic recognition from Taiwan to Beijing.

Speaking at a ceremony marking the reopening of the embassy, Moncada said: "You are welcome in our Nicaragua... with the certainty that both countries have ahead of us a future of successes and victories in our brotherly relations."