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LatinNews Regional Monitor: Caribbean & Central America - 17 May 2018

Economic Highlights

DOMINICAN REPUBLIC | Switching to Beijing. On 30 April, the Dominican Republic’s (DR) government led by President Danilo Medina announced that it had established diplomatic relations with mainland China and severed ties with Taiwan after 77 years. By far the biggest economy in the Caribbean, and on a par with Central America’s largest economy, Guatemala, the DR has become the third country in Central America to sever ties with Taipei in favour of Beijing in recent years, after Costa Rica (2007) and Panama (June 2017). This leaves Tapei with diplomatic relations with just 19 countries globally. Last month the DR announced the inauguration of an aluminium manufacturing plant by Chinese firm Kingtom Aluminio SR with an RD$530m (US$10.8m) investment – the first Chinese manufacturing firm to set up in the Caribbean country. A presidential press release notes that bilateral trade was worth about US$2bn, making the DR mainland China’s second-largest trading partner in Central America and the Caribbean while China is already the DR’s second-largest source of imports. As well as trade, the DR presidential press release highlights that over the next few months other forms of bilateral cooperation will be explored such as in the financial sector, technology, tourism (noting that already over 135m Chinese tourists visit the DR annually), education, and energy. The DR’s decision to accept Beijing’s ‘One China’ policy – that there is only one China and Taiwan is part of it – leaves just El Salvador, Guatemala, Nicaragua, Honduras, Belize, St Kitts & Nevis, St Vincent & the Grenadines, and St Lucia as allies of Taiwan in Central America and the Caribbean.

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