Uncovering China-Dominican Republic Economic Relations

By GRT Guest Blogger Yuan Li, 2013 GFDD Fellow and Author of Dominican Republic and P.R. China: Exchange, Trade and Investment

IMG_1224The growing linkages between China and countries in Latin America and the Caribbean (LAC) have been calling for a deeper understanding of the relations at both the macro and micro level. While there is significant amount of quality analysis delving into China’s exchanges and relation with countries in South America, not much has been done when it comes to China-Caribbean relation. Moreover, there is a gap in field work-oriented analysis on the dynamics of the relation between China and LAC countries that do not have diplomatic relations with China.

The GFDD Fellows publication “Dominican Republic and P.R. China: Exchange, Trade and Investment” intends to address these understudied yet important questions, building primarily on field research conducted in the Dominican Republic (DR).

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The research has 4 components: trade, tourism, investment, and Chinese diaspora. In general, the key findings are:

  • Overall influence: Chinese influence in the Dominican society is significant. Presence of Chinese products and businesses are seen in the every-day life of Dominican people. Overall, Dominican people are aware of this Chinese presence, and acknowledge the value of the activities of Chinese people in Dominican society. However, this opinion is changing with the recent flow of new immigrants.
  • Trade: DR-China economic relations in some ways resemble the commodity-centered relationship model between China and resource-rich South American countries, which is often explained by complementarity in economic structures. Although the DR is not a resource-rich country, the current main Dominican exports to China are mineral products (ferronickel, raw copper, waste from iron and steel). On the other hand, the DR imports manufactured products from China. However, diversity is growing with increasing mutual awareness and understanding, led by Chinese and/or Chinese descendants that have lived or worked in the Dominican Republic.
  • Tourism: It is encouraging to see substantial growth each year in the number of Chinese visitors to the DR. However, the gross volume of Chinese tourists is still very limited. The challenge lies in the development of a targeted tourism promotion strategy that identifies the key clients and the effective channels to reach these clients.
  • Investment: Large-scale Chinese investment is hard to materialize, due to a lack of diplomatic recognition and official financing mechanism. Market size, information asymmetry, basic infrastructure and business service constraints are also deciding obstacles. That being said, it is worth pointing out that satisfactory labor market supply was actually well acknowledged by many Chinese enterprises.
  • Chinese diaspora: There are two categories of Chinese immigrants: the old ones (since 1860s) and the new ones (during the past 10 years or so). The old ones are well integrated into the Dominican society, often holding upper-middle or even higher social status. The new ones remain relatively closed to themselves, which has caused misunderstanding and mistrust with the locals. Nevertheless, all immigrants are strongly tied to their Chinese origin. They all compose an entrepreneurial group of minorities in the Dominican Republic. There is great potential to enhance the China-Dominican Republic linkage through the Chinese diaspora.

Publication samples

http://www.drfellowsprogram.org/reports/pub_china_eng.pdf

Related links

http://www.drfellowsprogram.org/

If you wish to purchase the book, place your order by phone to 212-751-5000 or send an email to: Kenia Hernandez [kenia@globalfoudationdd.org]

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