Kiribati has joined other Pacific Island countries in signing up to China's global development strategy, the 'Belt and Road Initiative' (BRI).
Kiribati's President Taneti Maamau signed a Memorandum of Understanding to work on BRI during a week-long visit to Beijing.
Mr Maamau was received by Chinese President Xi Jinping - four months after Kiribati broke off diplomatic ties with Taiwan.
According to the Xinhua news agency, Mr Xi told Mr Maamau that Kiribati's government stood on the right side of history.
Kiribati restored links ties with Beijing after severing them in 2003 in favour of Taiwan.
Until then China maintained a satellite tracking station on Tarawa, which was subsequently dismantled.
Taiwan has diplomatic ties with three of Kiribati's neighbours, but last year cut links with Solomon Islands which now also recognises China.