A report from the Association of Dominican Free Zones establishes that internal costs as well as the competition from China are behind the decline of the free zone manufacturing sector in 2004. Last year China apparel exports to the US were up 44.9%, according to a report in El Caribe. According to statistics reported in the Report on the Dominican Economy 2005 of the Central Bank, exports of free zones declined 9.1%. Exports in 2005 were US$4.591 million, compared to US$4.497 million in 2004. The manufacturing zones were known to cut jobs.
Dominican free zones have reacted to the competition with a diversifying of production. According to the National Council of Export Free Zones, in 2005 93 new companies were approved with a RD$4.2 investment and 10,467 jobs to be created. Of these 26% were in services, and 23% apparrel. Other areas were jewelry, medical products, footwear, cardboard boxes, marketing, agroindustry, metalworking, chemical products, among others.