China and the Dominican Republic

photo credit: Dominican Today

In May 2018, Dominican President Danilo Medina announced the Dominican Republic government would recognize the People’s Republic of China and end its diplomatic ties with Taiwan, threatening, by that gesture, to endanger its long-lasting relationship with the United States.  

What motivated this decision?  Is China a better ally for the Dominican Republic than the United States? Why is China suddenly interested in the Dominican Republic?

In 2013, China adopted the “One Belt Belt and One Road Initiative.”  As described by China’s leader Xi Jinping, “The Belt and Road Initiative China launched is designed to mobilize more resources, strengthen connectivity, leverage potential growth drivers and connect markets.  It is designed to integrate more countries and regions into economic globalization and achieve shared prosperity through mutually beneficial cooperation.”

The initiative is, on the surface, a “Modern-day Silk Road.”  Fieldston history teacher Dr. Blaney, in a recent interview, said “They are trying to in a sense do what the European powers had already done, which is set up these international communications and trade through their own, not through the World Trade Organization and stuff like that.”  Under the Belt and Road Initiative, Blaney suggests, China has created trade routes through Asia and into the outskirts of Europe, which has been beneficial for businesses.  Yet China also has other intentions for the Belt and Road Initiative.

Through the Belt and Road Initiative, China has partnered with many poorer countries, mostly in Asia, Africa and Latin America.  Often, China lends these countries money for large infrastructure projects and other projects beneficial to their economies.  China, as part of the deal, also floods the zone with Chinese workers, businesses and services.

By doing this, China can achieve many of its goals.  China’s influence over these countries translates to the United Nations, where China can form a large bloc and have more power over global decisions.  China can also use these partnerships to isolate Taiwan’s global relations, because countries end formal diplomatic ties with Taiwan when they partner with China.  The isolation of Taiwan is an important achievement for China, which counts the recovery of Taiwan as a major foreign policy goal.  As explained by Dr. Blaney, “Going after diplomatic allies of Taiwan is something that China has been consistently doing….”

Many critics believe China has also practiced “debt trapping.”  The loans China hands countries are often one-sided, require the use of Chinese state-owned enterprises and are often difficult for countries to repay.  When countries are unable to pay off the loans, they often cede control of the assets.  Through this process of debt trapping, China has gained control of many strategically important locations throughout Asia, particularly in the Middle East and South Asia.  

The clear negatives of making deals with China raise the question of why countries do it.  So why do they do it?

Firstly, the loans China offers may be ambitious for a small country to pay back, but they are necessary to improve a small country’s economy.  The large loans that the countries are offered by China cannot be obtained by these countries elsewhere, which means the loans may be the only way for struggling countries to stimulate growth.  Even if the loans are dangerous, often the short-term growth a country experiences from these loans is more appealing than the long-term hazards.
Secondly, often deals with China are the result of corrupt governments and officials.  Not only does China have a corrupt government, with a score of only 42 out of 100 on the Corruption Perceptions Index, but many of the countries China does business with have low scores as well.  Some of the Belt and Road Initiative deals are agreed to not because they benefit the other country, but because they offer elites a way to make money.

Even before President Danilo Medina and the Dominican Republic formed relations with China, corruption shadowed his administration.  Although Medina’s presidential tenure ended in 2020, the Dominican Republic still ranks 137 out of 180 on the Global Corruption Index, largely due to practices during Medina’s time in power.  An example of Medina’s corruption emerged recently when it was found his administration was involved in the Odebrecht Scandal and was paid $92 million dollars in bribes by the Brazilian construction company.  Corruption is very common for Dominican politicians and presidents.  When interviewed, Fieldston Spanish Teacher Sra. Perez described this corruption.  “Politicians go into office to get rich, not to help people,” she said,  “… It has always been about helping themselves to get leverage and helping their family to get positions in the government and that’s just like a given.”

When the Dominican Republic and China allied in November 2018, corruption appeared to be at play.  Powerful Dominican business leaders joined President Medina’s delegation to China. Most of the fourteen projects agreed upon on the trip were in the areas of the business leaders.  Many of the loans by China that followed were also related to those areas of business.

Largely resulting from the deal, trade between the two countries has risen from $136 million USD in 2002 to $4.42 billion USD in 2020.  Additionally, the number of Chinese companies operating in the Dominican Republic jumped from 6 to 25.

Perhaps the most important support to the Dominican economy from China was during COVID-19.  China supplied the Dominican Republic with medical equipment, including more than 450,000 face masks, 10,000 COVID-19 tests and personal protective equipment for medical personnel.  Subsequently, after the Dominican Republic struggled to obtain the 10 million doses of AstraZeneca vaccines it ordered, it was able to buy more than one million doses from the Chinese firm Sinovac, as well as 50,000 doses as a donation from China.

China’s impact has not just been in the Dominican Republic.  Ecuador, Chile, Uruguay, Trinidad and Tobago, Panama and El Salvador have also signed agreements with China.  These agreements show a concerted effort by China to gain influence in Latin America.

These agreements also show that the United States is losing power in Latin America.  Since the end of the Cold War, United States influence in Latin America has been nearly uncontested.

But with another player in Latin American politics, The United States has to change how it does business in Latin America.  This means that Latin American countries have more power than ever when it comes to foreign relations.  As Dominican resident Janett Liriano described to me,  “As a Dominican, I very much like the dynamic that’s emerged right now, which is that these two world powers want to ensure that the Dominican Republic wants to pick them.  It’s good for the government.  Because from our point of view, we have a lot of Dominicans in the United States, but ultimately this is the Dominican Republic, and the Dominican Republic has to make choices on what they are going to do.  So I think, so far as national relationships go, where the ultimate allegiance will be is which world power consistently demonstrates benefiting local Dominicans.”

It appears that, under new President Luís Abinader, the Dominican Republic will return to the longtime relationship it has had with the United States.  President Abinader has been vocal about his hard stance on China and his focus on strengthening relations between the Dominican Republic and the United States.  This position makes sense, as it would be an unpopular decision to further cut ties with the United States.  Along with the considerable number of American tourists that visit the Dominican Republic, the 1.3 million Dominican immigrants in the United States mean that many Dominicans depend on a good relationship with the United States to make money.  As Sra. Perez said, “I don’t even know where the Dominican Republic would be without the people that have migrated to the US and have come here to get a better life.”

Yet still, China’s newfound influence in the Dominican Republic and other Latin American countries gives these countries leverage.  Unless the United States is willing to not only lose important trade partners but allow one of their biggest international adversaries to gain power in their backyard, the United States is forced to take a more fair approach while conducting business with Latin America.  Overall, while many of China’s foreign policies are dangerous for these Latin American countries, China also has benefited these countries’ economies and allowed these countries to negotiate a fairer future with whatever foreign powers they conduct business with.