Is China a Good Trade Partner?

The trade relationship between the Dominican Republic and China, formally established in May 2018, has generated high expectations but also serious concerns.

According to political analyst Juan González, in 2024 the Caribbean country recorded a trade deficit with the Asian giant of approximately US $5.2 billion, the highest with any trade partner, representing an imbalance of 94%.

This figure, backed by ProDominicana, highlights a deeply unequal economic relationship: while imports from China reached US $5.2 billion, Dominican exports barely amounted to US $326 million.

Since the establishment of diplomatic relations, trade with China has grown significantly. Between 2020 and 2024, bilateral trade exceeded US $22.4 billion, but 88.7% corresponded to Chinese imports.

Products such as electronic machinery, mobile phones, laptops, solar panels, and plastics dominate imports, while Dominican exports are limited to raw materials such as ferroalloys, raw tobacco, and agricultural products like bananas.

This pattern reinforces the Dominican Republic’s dependence on low value-added goods, which limits its competitiveness in the Chinese market.

In the first six months of 2024, the trade deficit with China reached US $2.0 billion, an 8% increase compared to the same period in 2023. Imports grew by 7.42%, while exports fell by 7.31%, dropping from US $83.4 million to US $77.3 million.

This imbalance reflects a structural asymmetry: China, with its advanced industrial capacity, floods the Dominican market with low-cost products, while the Dominican Republic struggles to diversify and upgrade its exports.

The trade deficit with China has serious consequences. According to González, maintaining this imbalance could weaken domestic productive sectors, especially free zones, and limit the creation of quality jobs. Chinese imports, which range from textiles to electronic equipment, directly compete with local production, affecting small and medium-sized enterprises. In addition, dependence on imported goods exacerbates economic vulnerability to global fluctuations.

In 2023, the Dominican Republic’s overall trade deficit was US $15.9 billion, a 6.5% decrease compared to 2022, but still significant. China, as the country’s second-largest trade partner after the United States, contributes substantially to this imbalance.

When the Dominican Republic severed ties with Taiwan to ally with China, an investment boom and significant access to the Chinese market for products such as cocoa, tobacco, and rum were expected.

Exports, however, have not taken off, and large investment projects, such as those proposed in Manzanillo, have not materialized, having been displaced by U.S. interests.

Despite initiatives such as the First Meeting of the Joint Commission for Economic, Trade, and Investment Cooperation in 2023, led by Foreign Minister Roberto Álvarez and Economy Minister Pável Isa, progress has been slow.

China has shown interest in sectors such as energy, infrastructure, and tourism, but Dominican exports have failed to gain significant traction in the Asian market.

The relationship with China represents a historic opportunity, but also a risk if not approached with strategic vision. The trade deficit is not just a number; it reflects the vulnerability of the Dominican economy in the face of an industrial colossus.

While China consolidates its presence with cheap products and modest donations, the Dominican Republic struggles to find its place in a competitive global market. Without a clear strategy to foster local production, diversify exports, and negotiate fair agreements, the country could become trapped in a relationship of economic dependence.