Far reaching co-operation agreements signed between China and the Dominican Republic

China has signed eighteen agreements with the Dominican Republic. They aim to significantly deepen economic relations through Chinese financial and other support and follow a decision by the Dominican Government taken in May this year to end its relations with Taiwan.

The accords which were signed in Beijing in the presence of the Dominican President Danilo Medina included Chinese support for infrastructure construction, finance, trade and investment, agriculture, education, tourism, aviation and sports. Also agreed was a Memorandum of Cooperation within China’s Economic Belt, Silk Road and Maritime Road Initiative.

It was also revealed that the Chinese President Xi Jinping plans to visit the Dominican Republic.

During the state visit it was announced that a US$600m loan to upgrade power distribution would be made to the Dominican energy sector by the China Export-Import Bank. Although no overall value has been placed on the level of Chinese support for the Dominican Republic, Reuters reported earlier this year that this could reach US$3.1bn though a package of investments and low interest loans (Caribbean Insight 4 May 2018).

Speaking specifically about China’s ‘belt and road’ initiative, President Medina said that the country was a “natural ally …. as a regional centre for trade between China and the rest of the Americas.” The Dominican Republic, he said, “situated in the heart of Central America and the Caribbean, (it) boasts one of the region’s most well-connected port networks, as well as a highly trained work force in production, transport and logistics.”

In a related indication of China’s interest in this aspect of the future relationship, a Memorandum of Understanding was signed relating to the construction of a mega-port and power installations in Manzanillo, on the north coast of the country.

Other agreements cover or include:

  • The creation of a mechanism for co-operation between the Export-Import Bank of China and the Ministry of Finance of the Dominican Republic which is expected to result in Chinese credits to support trade, investment and economic cooperation.
  • Strategic Cooperation between the Ministry of Finance of the Dominican Republic and the China Development Bank. The Bank, the world’s largest development finance institution, provides support for foreign investment, financing cooperation, and long-term lending.
  • An agreement on the development of human resources with China’s International Development Cooperation Agency. This is expected to provide technical assistance, training and other forms of support in order to advance strategic initiatives such as the Belt and Road programme.
  • Support for trade facilitation, economic development and increased cooperation for infrastructure development.
  • The establishment of sanitary and phytosanitary measures relating to trade in agricultural products particularly in relation to exports of tobacco leaf and tobacco products as well as rum and cacao.
  • Agricultural cooperation expected to lead to Chinese involvement in agriculture and fisheries in the Dominican Republic.
  • The establishment of the Joint Commission on Economic, Trade and Investment Cooperation.
  • The development of a plan to support education in the years 2018-2023 as well as others on cooperation in sports and baseball.
  • An agreement that will see the creation of training programmes and university level exchanges on diplomatic and consular training.
  • The facilitation of group travel by Chinese tourists to the Dominican Republic which, according to Frank Rainieri of Grupo Puntacana who travelled to China as a part of a large business delegation accompanying the President, will result in the country receiving Chinese middle-class travellers.
  • An agreement on civilian aviation covering flights between the two countries.

During the visit, President Medina said that the two countries had signed a Political Consultation Agreement “focused on working together at multilateral forums”. Dominican reports suggest that the signing had taken place before the visit.

Speaking before the President arrived in China, the country’s Ambassador to the Dominican Republic, Zhang Run, said that to facilitate the development of relations, the Dominican government had established a special office to co-ordinate the development of relations. He said that in preparation for the presidential visit there had been vigorous exchanges between governments, legislative bodies, political parties, enterprises, think tanks and the media.

On trade, he told the state-run Chinese News Agency, Xinhua, that  China and the Dominican Republic were “complementary partners”. He suggested that in China, Dominican enterprises could find a large consumer market for their tobacco, rum, pineapple, banana, cacao, blue amber and other high-quality Dominican products.

He also noted that several Chinese companies had either launched factories or set up offices in Santo Domingo in related to energy, telecommunications, mining and light industry. Zhang also suggested that the Dominican Republic might become a promising destination for Chinese tourists.

According to the Dominican Republic’s National Statistics Office (ONE) in 2017 China exported US$2.5bn there but imported just US$145m of goods of which a significant part was scrap metal.

During the visit to China a Dominican Embassy in Beijing was formally opened. It was also announced that three consulates would open in Shanghai, Beijing and Guangzhou.

China and the Dominican Republic officially established diplomatic relations on 1 May this year.

 

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.

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