What does China want and what is convenient for the Dominican Republic? Economist Arturo Martínez Moya writes in an op-ed piece in Hoy that the government should gather business people and academics to local at strategies to harmonize the interests of both countries. He made the observation just before Foreign Minister Wang Yi is to visit the country later this week.
He highlights that for Beijing what goes is the Silk Road Economic Belt and 21st Century Maritime Silk Road, and the country needs to fully comprehend how it can best fit into this agenda. The Silk Road has China turbo-charging its infrastructure connectivity across the region and the Caribbean.
Martínez says that China is focused on increasing trade and forging deals that accumulate international reserves, a policy that has already allowed them to gain space internationally. He highlights that trade with China has been one sided. We imported US$2.458 billion and only exported US$145 million. He says DR agriculture and manufactured products are not competitive in the Chinese market which impedes exports. The DR cannot compete with Philippines, South Korea, Malaysia, Indonesia, Cambodia, Laos or Vietnam.
Our trade agenda with the Chinese Foreign Minister needs to include ways the Chinese can reduce these competitive disadvantages, so the Dominican Republic can take part in the Asian intra-continental trade that represents 53% of total Chinese trade, he writes.
He suggests reviewing ways to attract money and technology, to get the Chinese to invest in local productive activities that add value to our raw materials, encouraging that the Chinese partner with Dominican entrepreneurs to prevent repatriation of all benefits.
Furthermore, Martinez Moya believes that it is important to institute measures that ensure the use Dominican labor and not Chinese workers.
Martinez Moya notes that for “turnkey” projects, the Foreign Minister is likely to receive loan offers from Chinese export and import and development banks to finance and build major projects such as power plants and railroads. He says that while these projects and investments may be sound business for the Chinese, it can become a headache for the country and the loans will inevitably involve agreements between governments, the creation of public debt and various “political commitments”.
Martinez Moya explained that his remarks could be interpreted as his taking the Trump side in the US-China tariff war between the two countries that control 40% of the world GDP, but it’s best for country to limit the relationship with the Asian giant to business deals between entrepreneurs and direct investment. “Putting it bluntly, it is in our best interest to exercise an economic diplomacy that does not generate annoying distractions to our historical and neighboring trade partner to the north, assuring that the government, businessmen and academics carry out the cost-benefit analysis from time to time,” he recommends.
He reminds the government that the country still has comparatively good conditions with the IDB and the World Bank to finance infrastructure projects.
The Medina Presidency has opened an office at the Presidential Palace to concentrate negotiations of the country with the Chinese government.
Follow the story in Spanish:
Hoy
China Dialogue
A Times
18 September 2018
