On May 1, 2018, the Dominican Republic established diplomatic tieswith the People’s Republic of China (PRC), obligating the Republic of China (ROC) to cut its own 77-year long political relationship with the country. The change by the Dominican government left just 19 countries globally that officially recognize the ROC as the legitimate government of all of China.
Of these, 10 of the remaining (more than half) are in Latin America and the Caribbean.
The official acceptance of the Dominican government’s action by the PRC provided further indication that the informal “diplomatic truce” that prevailed with the PRC during the KMT government of Ma Jing-yeou in Taiwan from 2008 until 2016 has come to an end. Following elections in Taiwan in January 2016 that brought to power Tsai Ing-wen and her Democratic Progressive Party to power led the PRC to again accept the offers of (and even to court), countries wishing to change their diplomatic relations from Taiwan to the PRC.
The initial PRC steps in this direction began in Africa with the PRC establishing diplomatic relations with Gambia in March 2016, followed by Sao Tome and Principe in December. That renewed competition extended to Latin America in June of 2017 with Panama’s recognition of the PRC.
The recent similar act by the Dominican Republic indicates that the PRC will continue its diplomatic struggle with Taiwan in the Western Hemisphere, with further recognizing the PRC even prior to the end of 2018 not unthinkable. Yet whichever country is next to change its diplomatic posture on China, the concentration of the countries still recognizing the ROC in Central America (Belize, El Salvador Guatemala, Honduras and Nicaragua) and the Caribbean (Haiti, St. Kitts and Nevis, the Grenadines and St. Lucia) suggests that the struggle, and the gestures that accompany it on China’s part, will bring about a significant increase in Chinese commerce, loans, investment activities, and even military engagement in the near term, in uncomfortably close proximity to US shores.
In the days since the Dominican Republic’s change, the associated activity and discourse has followed a familiar pattern. The Dominican government gave Taiwan 30 days to retire its diplomatic personnel, and Taiwan announced the immediate suspension of its aid programs.
Although the Taiwanese government accused the PRC of bribing the Dominican Republic with $3 billion in loans to change their position (a criticism echoed by U.S. Sen. Marco Rubio, R-Fla.), the Dominican government denied that it had received any quid pro quo from the PRC for its action, other than assurances that Dominicans studying in Taiwan on scholarships would have the opportunity to continue their studies in the PRC (presumably via funds from the PRC organization Hanban).
As in other cases, the change in diplomatic recognition by the Dominican Republic has raised hope within its business community for an expansion in the nation’s exports to the PRC. The country’s lopsided trade balance with mainland China is not atypical, particularly for states lacking relations with mainland China. During the period 2012 to 2016, the Dominican Republic’s total exports to the PRC, $1.3 billion, were eclipsed by imports from China of $6.54 billion.
Indeed, prior to the change, Dominican exports to the PRC had been steadily declining, from $273.8 million in 2015 to $85 million in 2017. Also paralleling the experience of many other Latin American and Caribbean countries, Dominican exports to the PRC are mostly comprised of low value added commodities, including copper, nickel, and zinc,while its imports from the PRC include a broad range of higher value added manufactured goods.
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