Caribbean shift: Dominican Republic ditches Taiwan for China

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With the formal commencement of official bilateral diplomatic relations, the Dominican Republic is the latest island nation to ditch Taiwan for China in exchange for rich economic benefits and assistance.

World renowned for its luxurious beach resorts, the Dominican Republic is the Caribbean’s second largest nation. By adopting the so-called “One China” doctrine, it has become the world’s 175th country to join the consensus supporting the United Nations General Assembly’s Resolution 2758, which recognizes Taiwan as “an inalienable part of the Chinese territory.”

China considers Taiwan as a “renegade province”, but the two self-touted China’s have for years competed for the diplomatic recognition of various small island nations in an often heated diplomatic legitimacy contest. However, Beijing has recently taken a lead over Taiwan with the promise of rich aid and investment offers in exchange for diplomatic recognition.

A communique was signed between the two sides’ foreign ministers in Beijing on May 1 recognizing the government of the People’s Republic of China as the sole legal government of China. By severing its diplomatic relations with Taiwan, the Dominican Republic became the latest nation after Panama, Sao Tome and Principe to opt for mainland China over its island version.

Dominican Foreign Minister Miguel Vargas hailed the diplomatic shift as a “new strategic phase” for his island nation. In the run-up to the agreement, Dominican President Danilo Medina had visited China twice for talks since 2016. According to a statement on the Dominican Presidential Office’s website, the country’s local industries had “requested greater diplomatic, commercial and economic growth with the People’s Republic of China.”

With China’s support, the strategically located Dominican Republic promises to become an important economic center of activity, especially as Beijing expands its ties with other Latin American states. According to China’s Foreign Minister Wang Yi , Santo Domingo stands to gain big benefits, as “establishing diplomatic ties with China means unprecedented huge potential opportunities for the Dominican Republic’s development.”

Considering the rich aid and assistance on offer, it’s not surprising Santo Domingo shifted its stance. The nation has witnessed up close the economic booms, infrastructure upgrades and effective poverty alleviation China’s investment has helped to accomplish across Latin America.

Chinese President Xi Jinping’s US$1 trillion Belt and Road Initiative plans to extend to 33 states of the Community of Latin American and Caribbean States (CELAC). Even without formal diplomatic ties, China was the Dominican Republic’s second biggest supplier of imported goods; bilateral trade was valued at US$1.9 billion dollars in 2017, according to official Chinese trade data.

That marked an 10.3% increase from the previous year, underscoring the still untapped trade potential between the two sides. Optimistic about the diplomatic shift from Taiwan to China, presidential legal adviser Flavio Dario Espinal said, “Of course, we know that now we’re establishing diplomatic relations the growth potential of our trade links is immense.”

Stronger economic ties to China will also help to elevate the Dominican Republic’s standing in the Caribbean and wider region. The island nation already exports raw copper, ferro-nickel and waste derived from iron and steel production to China.

Chinese companies are also moving fast into the Dominican Republic’s finance sector. Many hope that China’s presence will help to modernize its banking facilities and finance the development of local industries and services.

China’s presence, to be sure, is not new in the Dominican Republic: A first wave Chinese diaspora arrived as early as the 1860s. Now well-integrated in Dominican society, there are already strong cultural links between the two sides Beijing’s diplomats will no doubt aim to leverage.

As new China-fueled opportunities emerge in trade, infrastructure, mining, energy and technology, other regional nations, including the United States, will no doubt take notice of China’s influence on the country.

Last week, meetings were held to discuss bilateral agreements on tourism, agriculture and infrastructure development. In an initial first move to promote more Chinese tourism, it was announced that visa restrictions between Beijing and Santo Domingo will be mutually eased.

Santo Domingo, a world-renowned popular cruise destination, is now undertaking an expensive makeover worth tens of millions of dollars to attract even more sea-faring tourists. That investment aims, in part, to promote the fact the capital is Latin America’s oldest colonial city; Christopher Columbus’ brother, Bartolome, founded Santo Domingo in 1496.

As Silvanh Riedel, manager of the Billini boutique hotel in Santo Domingo said, the city center is “a diamond that needs polishing.” Tourists are already attracted to Dominican Republic’s tropical shine: it received 6.2 million tourists in 2017, bringing a 37% rise in income from the cruise ship sector.

Those numbers could jump again with Beijing-promoted tours for Chinese tourists as a first economic overture and reward for Santo Domingo’s new diplomatic recognition.

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