What to expect from the signing of diplomatic relations with the People’s Republic of China
Former Central Bank governor and Dominican ambassador to the USA, economist and historian Bernardo Vega shared in a feature in Acento on 7 August 2018, his opinions on what to expect from the signing of diplomatic relations with the People’s Republic of China.
Vega speculates that it is possible that before the end of the year, President Danilo Medina would accept an invitation to travel to Beijing and then will be when the country will learn of the bilateral plans.
He says to get an idea of what to expect, one should study what Costa Rica and Panama have gained from signing with China.
Vega explains that Costa Rica received a US$100 million football stadium, and aircraft to fight drug trafficking. It also benefited from China buying Costa Rica bonds at below market rates. The Chinese have provided financing to build a Police Academy and provide vehicles for that institution. The Chinese also contributed to the extending of a highway and improvements to their Chinatown. He says the most important benefit of the relationship, nevertheless, has been the construction of industrial parks where Chinese companies can skirt trade barriers now imposed by US President Trump. Vega points out that China has gained much more from the 2011 establishing of diplomatic ties than Costa Rica, where he says the impact has been relatively low.
As for Panama, that established diplomatic relations with China in 2017, he writes that China is the main client of the Colon Free Zone, where China warehouses its goods and re-exports to the rest of the Western Hemisphere. He observes China is also the second largest client of the Panama Canal after the USA. He observes that Panama is a service economy (the canal, banks, warehousing) with little farming and industry. Some 23 agreements that have been signed along these lines and Panama, as well as Costa Rica, are working on the signing of a free trade agreement.
Air China has initiated flights to Panama via Houston, Texas. An estimated 130 million Chinese travelers, that spend on average 25% of their travel budget on shopping, more than other travelers. But he observes earlier experiences of travel to Costa Rica and Cuba has been disappointing, and the Chinese prefer to vacation in nearby Asia beach destinations such as those in Indonesia and Australia. Likewise, he says the Chinese tourists have their peculiarities and require special details.
Vega focuses on two points that could be convenient to the Dominican Republic in regards to China. This is that the country attract Chinese export companies that generate jobs and that China buy our sovereign bonds at subsidized rates. Vega highlights that a free trade agreement definitely is not of interest to the Dominican Republic.
He writes that it is tempting to replace Odebrecht with mega Chinese infrastructure projects, but he urged the government to avoid this temptation. “The Chinese are as corrupt as Odebrecht. I doubt that they are interested in buying Catalina because they prefer to build the projects themselves. Developing the port of Manzanillo and adding natural gas plants make sense. The United States already exports that gas to our country and Panama. Our generation is concentrated between Macoris and Haina and a natural disaster would affect us a lot.” [China has already signed a memorandum of understanding in this direction.]
Source: DR1, Acento
Aug 9, 2018
Category: DR News |