Identifier
Created
Classification
Origin
04SANTODOMINGO6472
2004-12-02 18:27:00
CONFIDENTIAL
Embassy Santo Domingo
Cable title:  

DOMINICAN POLITICS #10: SANTO DOMINGO, BETWEEN

Tags:  PREL ETRD EINV EPET CH TW DR XE 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 05 SANTO DOMINGO 006472 

SIPDIS

STATE FOR WHA/CAR, WHA/EPSC, WHA/USOAS, EB/TPP/BTA,
EB/IFD/OMA, EAP/CM, EAP/TC; STATE PASS AIT/W; NSC FOR
SHANNON, MADISON; LABOR FOR ILAB;
USCINCSO ALSO FOR POLAD; TREASURY FOR OASIA-LCARTER
STATE PASS USTR FOR VARGO, RYCKMAN, MALITO, CRONIN
USDOC FOR 4322/ITA/MAC/WH/CARIBBEAN BASIN DIVISION
USDOC FOR 3134/ITA/USFCS/RD/WH; DHS FOR CIS-CARLOS ITURREGUI

E.O. 12958: DECL: 12/02/2009
TAGS: PREL ETRD EINV EPET CH TW DR XE
SUBJECT: DOMINICAN POLITICS #10: SANTO DOMINGO, BETWEEN
TAIPEI AND BEIJING

REF: A. TAIPEI 3667 (NOTAL)


B. TAIPEI 3666 (NOTAL)

C. SANTO DOMINGO 6298

D. USDAO SANTO DOMINGO IIR 6 827 9970 05 231631Z
NOV 04 (NOTAL)

E. BRIDGETOWN 2684 (NOTAL)

Classified By: DCM Lisa Kubiske for reason 1.4 (b) and (d).

C O N F I D E N T I A L SECTION 01 OF 05 SANTO DOMINGO 006472

SIPDIS

STATE FOR WHA/CAR, WHA/EPSC, WHA/USOAS, EB/TPP/BTA,
EB/IFD/OMA, EAP/CM, EAP/TC; STATE PASS AIT/W; NSC FOR
SHANNON, MADISON; LABOR FOR ILAB;
USCINCSO ALSO FOR POLAD; TREASURY FOR OASIA-LCARTER
STATE PASS USTR FOR VARGO, RYCKMAN, MALITO, CRONIN
USDOC FOR 4322/ITA/MAC/WH/CARIBBEAN BASIN DIVISION
USDOC FOR 3134/ITA/USFCS/RD/WH; DHS FOR CIS-CARLOS ITURREGUI

E.O. 12958: DECL: 12/02/2009
TAGS: PREL ETRD EINV EPET CH TW DR XE
SUBJECT: DOMINICAN POLITICS #10: SANTO DOMINGO, BETWEEN
TAIPEI AND BEIJING

REF: A. TAIPEI 3667 (NOTAL)


B. TAIPEI 3666 (NOTAL)

C. SANTO DOMINGO 6298

D. USDAO SANTO DOMINGO IIR 6 827 9970 05 231631Z
NOV 04 (NOTAL)

E. BRIDGETOWN 2684 (NOTAL)

Classified By: DCM Lisa Kubiske for reason 1.4 (b) and (d).


1. (U) This is #10 in our current series on politics in the
Dominican Republic:

Santo Domingo, Between Taipei and Beijing

(C) Summary and comment: Beijing's global campaign to
isolate Taiwan has reached the Dominican Republic, the
largest Caribbean island nation that maintains diplomatic
relations with Taipei. The Fernandez administration is
clearly interested in the People's Republic of China as a way
to expand his nation's economic opportunities and broaden its
international relationships. Fernandez has said he wants to
"strengthen ties" with the PRC and talks of making a swing
through ethnically Chinese Asia and South Korea next spring,
and he has named a deputy director for a planned Dominican
trade office in Beijing (in addition to the existing office
in Hong Kong). Privately, the Foreign Minister commented to
the Ambassador November 18 that Dominican recognition of
Beijing might be inevitable over the long term, but not right
now. Comment: All of this activity comes in the context of
a Dominican Republic in dire need of economic support, headed
by a president who, in his first term, opened Dominican
relations with Cuba. We don't foresee Dominican recognition
of Beijing in the near future, but cannot rule out the
possibility sometime in the next few years. End summary and
comment.

Renewed Expressions of Interest

--------------

(SBU) Beijing's global campaign to gain international ground
over Taiwan has reached the Dominican Republic, the largest
Caribbean island nation that maintains diplomatic relations
with Taipei. Two commercial/investment technical delegations
from the People,s Republic of China (PRC) visited in early
November, a PRC music and dance troupe performed here
November 27-30, and a Chinese athletic group is expected in
December.

(SBU) In addition, nine of the 32 Dominican senators were in
China November 22-29 as guests of the PRC; the group included
Senate President Andres Bautista (opposition PRD) and the
only senator of the ruling PLD, Jose Tomas Perez. Their
itinerary included meetings and/or dinners with the PRC vice
ministers of foreign affairs and trade, leaders of the
National People's Assembly (NPA),subdirector Wang Yulin of
the international department of the Central Committee of the
Chinese Communist Party, and local officials in Beijing,
Guaylin, Shenzhen, and Shanghai. We understand that the
group received VIP treatment with motorcade escorts and was
accompanied throughout the 10-day visit by Vice Foreign
Minister Ji Peiding. Many PRC officials, including the NPA
president, reportedly expressed their government's desire for
diplomatic relations with Santo Domingo.

(SBU) This visit follows a recent trip to the PRC by
Dominican Ambassador to the United States Hugo Guilliani
Cury, seeking Chinese investment in export-oriented factories
in the Dominican Republic. Dominican senators had also been
guests of Taipei authorities in mid-2004 and caused a brief
stir when a Taipei legislator reported speculation by PRD
Senator Ramon Albuquerque that the incoming administration
might want to recognize the PRC.

Pressure for Recognition
--------------

(C) During a call by the Ambassador on President Fernandez
November 9, one of the PRC delegations was waiting in the
anteroom to meet with Fernandez. The group was led by Huai
Zhongmin, president of the Association of Foreign Exchanges
of Dalian municipality, and accompanied by PRC commercial
representative in Santo Domingo Cai Weiquan. Long-time
Dominican leftist Miguel Mejia, recently named as a minister
without portfolio, arranged the meeting and accompanied the
visitors. A former MFA official in charge of Caribbean
affairs, Mejia has regularly served as a behind-the-scenes
facilitator for Dominican contacts with the PRC, Cuba, and
Venezuela. He is said to have contacts with North Korea and
to have traveled there as well.

(C) Taipei's ambassador to the Dominican Republic Feng
Chi-tai (John) told poloff that Huai in his meeting with
Fernandez had "crudely" and explicitly conditioned the
proposed investments on the Dominican Government's
recognizing the PRC. Fernandez, resenting the pressure,
abruptly terminated the meeting, according to Feng.

(C) The MFA official in charge of Asian affairs told us that
the Chinese delegation, in a separate meeting with Foreign
Minister Carlos Morales Troncoso, had proposed establishment
of diplomatic relations. Foreign Minister Carlos Morales
Troncoso subsequently commented to the Ambassador that
recognition of China might be inevitable over the long term,
but not now. China is a reality, Morales said, and the
Dominicans have probably benefited Taipei more than Taipei
has benefited them.

Proposed Investment in Technology and Tourism
--------------

(C) Morales told the Ambassador that the PRC provincial
officials were interested in investment in technology. A
Chinese firm was bidding on a "turnkey investment" in Higuey
in the eastern Dominican Republic that would involve bringing
in almost 300 Chinese laborers and technicians. An under
secretary of tourism informed us that PRC investors were

SIPDIS
looking at tourism investments in the country, reportedly "if
the Dominican Republic recognizes Beijing." As we have
already reported (Ref C),the three most likely bidders for a
50 percent interest in the new Caucedo container port are two
mainland Chinese companies and one Hong Kong firm.

(U) Chinese commercial representative Cai Weiquan has been
busy and visible. He told the media that the recent
delegation offered technical assistance on "ocean areas,"
environment and natural resources, education, health, and
other matters, and he suggested creating a mixed commission
to oversee these efforts. The technical delegation is
reported to have met with the Dominican ministers of
environment, industry and commerce, and sports. According to
some reports, the group also mentioned a possible Chinese
purchase of Dominican bonds or Paris Club debt. Taipei's
Ambassador Feng told poloff that a second PRC technical
delegation, from Chongqing city (Szechuan province),had been
in Santo Domingo shortly before the group from Dalian.

Presidential Trip to Asia
--------------

(C) President Fernandez, in a lunch with media executives
November 25, said he planned to travel to Asia next spring:
PRC, Hong Kong, Taiwan, Singapore, Malaysia, and South Korea.
He wanted to strengthen ties, he said. He understood that
Taiwan would be unhappy about this, but that the PRC was
offering Taiwan a "one country, two systems" model in which
Taiwan could keep its own systems. He thought many in Taiwan
could accept such an arrangement.

Taiwan Not Idle, but Pessimistic
--------------

(U) Not coincidentially, investors from Taiwan led by
Minister without Portfolio Lin Yi-fu (economic adviser to the
prime minister) arrived November 21 for a one-day visit to
inaugurate a technology-related project and explore others.
Taipei's Ambassador Feng said that the visit was organized
hastily in response to the PRC initiatives, came
"unprepared," and would be unlikely to generate much
investment. Feng's view: Taipei can only encourage
investors to engage; Beijing can order them to do so.

(SBU) Feng said the PRC has "targeted" the Dominican Republic
to increase trade, investment, and assistance, part of an
effort to obtain recognition. He said that Dominicans are
exploiting the opportunity to extract maximum benefit from
both China and Taipei. He shared his views on the margins of
the dedication of a computer and English language training
center in Santiago set up by PLD Senator Perez, entirely
equipped with machines donated by Taiwan.

(C) Taipei's ambassador sketched his beleaguered situation.
Despite substantial Taiwan assistance here (approximately USD
70-80 million over the past 5-6 years),Feng sees his
influence gradually slipping. But he seemed certain that
diplomatic relations would survive for the time being. Prior
to the August 16 inauguration of President Fernandez, he had
told Feng that the Dominican Republic would continue to
recognize Taiwan while expanding economic relations with the
PRC.
(C) Feng has had other frustrations as well. In July
President Mejia inaugurated a new regional hospital in the
southwestern city of Azua; Taiwan financed USD 15 million of
the USD 19 million cost. But lacking essential equipment and
staff to be provided by the government, the facility stands
empty.

(C) Feng's doubts about his position here are compounded by
what he sees as Taiwan's deteriorating relations with the
United States and divisive domestic politics. (Note: A
member of the Nationalist Party, Feng spent seven years in
Washington early in his career. End note.) He was critical
of his government's acquisitions of expensive military
equipment from the United States for defense against China at
a time of escalating economic exchange and migration across
the Taiwan Strait.

Big-Ticket Investments
--------------

(C) The assistance, investment, and trade offered by the PRC
to the Dominican Republic far outstrip Taiwan's resources,
Feng acknowledged. He said Caracas and Beijing have proposed
exploration for offshore oil in Dominican waters, using
Venezuelan capital and Chinese technical know-how.

(C) China Minmetal's proposed USD 5 billion purchase of the
Canadian Falconbridge mining enterprise could affect the
situation here, according to Feng. Our mining sector
contacts say that Falconbridge operations in the Dominican
Republic have not been visited by any Chinese. Feng asserts
that once the Canadian corporation is sold, the Dominicans
will supply the PRC with iron and nickel, since the Chinese
firm will have 87% of the shares of the Dominican affiliate.
This "brilliant move" will also enable Beijing to leverage
its investment clout into political and diplomatic influence
in Santo Domingo, he fears.

Trade with the PRC
--------------

(U) PRC exports to the Dominican Republic amount to some USD
150 million annually and are more likely to grow than
Dominican exports to China. The efforts of the PRC
commercial office here since its establishment in 1994 have
paid off in a trade surplus of more than USD 100 million.

(C) The memorandum that established commercial relations
provided for Dominican trade offices in Beijing and Hong
Kong. The Dominicans converted their consulate in Hong Kong
to a commercial office after the former crown colony's
integration into the PRC, postponing plans for Beijing.
According to MFA Under Secretary for Consular Affairs Rosario
Graciano, President Fernandez has just named Roger Casado
Alcantara as deputy director of an office in Beijing -- but
has not yet named a director, provided a budget, or trained a
staff.
Investment and Aid from Taiwan
--------------

(SBU) According to the press, current Taiwan investment here
exceeds USD 100 million in more than 70 firms, which directly
provide 3500 jobs. The Taiwan firms are active in free-zone
administration and industries including paper, textiles,
acrylics, plastics, aluminum products, printing,
horticulture, photography, computing, and food processing.
Taipei is also reportedly assisting small business
development. In August, the Dominican Confederation of Small
and Medium Enterprise (CODOPYME) signed a cooperation
agreement with the Association of Small and Medium Enterprise
of the Republic of China, the Textile Federation of Taiwan,
and the Federation of Industries of Taiwan.


2. (U) Drafted by Bainbridge Cowell.


3. (U) This piece and others in our series can be consulted
on our classified SIPRNET site
http://www.state.sgov.gov/p/wha/santodomingo/ along with
extensive other material.
HERTELL