Chinese capital is increasingly taking control of the entire supply chain for goods sold in the Dominican Republic, from factory to storefront, threatening to turn Dominican merchants into bystanders in their own market, former Dominican ambassador José Singer warned in an opinion piece published this week.
Singer said the trade relationship between China and the Dominican Republic had for years seemed straightforward: the Dominican Republic imported billions of dollars worth of Chinese merchandise, while Dominican shopkeepers, hardware store owners, distributors and industries sold the goods domestically. The product was Chinese, he said, but much of the economic activity it generated, including jobs, taxes, transport, storage and sales, stayed in Dominican hands.
Shifting trade relationship
That model is changing quickly, according to Singer. Chinese capital is no longer limited to manufacturing and exporting goods. Firms now seek to control the whole chain, manufacturing in China, importing directly, distributing within the country and selling to the final consumer through stores run by Chinese citizens. Dominican business owners, who previously took part in one or more links of that chain, risk being reduced to spectators, he said.
Singer argued this is not conventional competition between two merchants. A local business owner buys from intermediaries, pays financing at Dominican interest rates, and covers wages, labor benefits, social security contributions, taxes and other national obligations. A Chinese competitor, by contrast, may belong to an integrated structure that controls everything from the factory of origin to the shop where the product is sold, he said.
That difference, Singer wrote, allows integrated firms to operate with costs, financing, inventories and margins that a small or medium-sized Dominican company can rarely match. When a single group manufactures, exports, imports, distributes and sells a product, he said, it can even choose at which point in the chain to declare its profits, an option unavailable to the Dominican merchant, who has nowhere to hide his costs.
Tax crackdown in 2024
Singer said there are already sufficient grounds for concern. In April 2024, the Dirección General de Impuestos Internos (the Dominican tax authority) and the Dirección General de Aduanas (the customs authority) shut down establishments belonging to Asian citizens over tax irregularities. Authorities reported transactions worth around RD$4,000 million tied to the case. Singer said an entire business community should not be judged over specific cases, but a signal of that magnitude cannot be ignored either.
He is a former Dominican ambassador who served as the country's special envoy to the United Nations Security Council between 2019 and 2020.
Calls for government action
Singer said the Dominican government must act before the trend becomes irreversible. He called for authorities to audit the values declared at customs, verify that taxes are actually being paid, supervise the relationships between manufacturers, importers and affiliated retailers, enforce labor compliance, and review practices that could amount to unfair competition. The same rules, he said, must apply to everyone, without privileges, exceptions or persecution.
If the trend continues unchecked, Singer warned, Dominican companies that took decades to build will disappear, formal jobs will be lost, tax revenue will fall, and entire sectors of commerce could end up dependent on a supply chain controlled from abroad. Consumers might initially benefit from lower prices, he said, but the country would later pay the cost of a weakened commercial and industrial base.
US silence questioned
Singer also criticized what he described as the silence of the United States on the issue. He noted that Washington regularly asks for Dominican cooperation on drug trafficking, migration, Haiti, security, telecommunications and the defense of democratic institutions, yet has been largely absent from the discussion around growing Chinese commercial penetration and its impact on Dominican business owners.
Friendship between nations should involve reciprocity, Singer argued. It is not reasonable, he said, for the United States to seek Dominican solidarity on every issue it considers strategic while remaining indifferent as an economic transformation of this scale threatens jobs, businesses and social stability in one of its closest allies in the Caribbean.
Singer said the Dominican Republic should not break relations with China or close its doors to trade. Instead, he said, the country needs to defend its market, demand transparency and ensure that no one competes with advantages that Dominican companies do not have. The problem, he wrote, is not that China sells in the Dominican Republic, but when it controls the factory, the import process, the distribution and the store, while the Dominican business owner disappears from every link in the chain.
