China and the Dominican Republic establish formal diplomatic relations

DOMINICAN REPUBLIC - In Brief 02 May 2018 by Pavel Isa

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Last Sunday, the Dominican Republic and the People's Republic of China announced the establishment of formal diplomatic relations. This implies the recognition of the Dominican Republic that there is only one China and that Taiwan is an inalienable part of its territory. For this reason, the rupture of diplomatic relations with Taiwan, which existed for 77 years, has also been formalized. The establishment of formal relations with China opens a huge range of possibilities in terms of trade, investment, tourism, financial relations and cooperation, which, until now, had been restricted by the absence of diplomatic relations, especially with regard to cooperation, investments and credits. Although the country exports to China only slightly more than USD 100 million, imports from that country are above USD 2 billion per year, being the second largest supplier of imports. China is also an important source of financial resources, and Chinese tourist flows are growing significantly towards numerous destinations in the world. The economic implications of this will depend on the specific forms that economic relations adopt under the new framework, such as a commercial agreement between both countries, credit programs and specific investment projects. From now on, we are obliged to closely monitor economic relations with China.