China is, without a doubt, a remarkable example of national success. Under an autocratic system, it has achieved what many once deemed impossible: a model in which the State maintains comprehensive control while simultaneously driving development through financing and direct subsidies to what it defines as private enterprise. To sustain social cohesion, it effectively leverages its ancestral culture, respect for family, and a structure in which the individual is subordinated to the collective.
There are no pension systems comparable to those found in other regions of the world. The few that exist provide minimal benefits, placing the responsibility of caring for the elderly primarily on children or family members. As a result, household savings account for approximately 40% of income.
What inspired me to write this article was a U.S. television program aired last Sunday: 60 Minutes, on the CBS network, arguably the most influential investigative program in the country. The report examined the reasons behind the United States’ growing dependence on China, both in the acquisition of rare earth elements and in the construction of vessels—tankers and cargo ships—used to transport oil and its derivatives.
In both cases, the conclusion was clear: Chinese prices are significantly lower. This has led the United States to scale back or abandon rare earth mining and reduce its shipbuilding capacity to nearly negligible levels.
I had a similar experience during my tenure as Ambassador to the United Nations Security Council. During an official visit to China, one of the sites we toured was Huawei, a global leader in telecommunications. There, their dominant position in the sector was presented without reservation, and I must say the impression was striking. When I asked about their main competitor in the United States, one of our hosts indicated that it should have been Cisco; however, due to state financing and subsidies from the Chinese government, the American company chose to withdraw rather than continue incurring losses in such a competitive environment.
As can be observed, this phenomenon is already replicating itself in Latin America, particularly in our country. Chinese businesses of all types, backed by their home government, are entering commercial and industrial sectors with prices that are virtually impossible to match. Their objective is not necessarily short-term profitability, but rather strategic positioning to eventually control key economic activities, thereby discouraging local investment. This is precisely what occurred in the United States, leading to its current dependence on Chinese products.
It is concerning to observe the complacency of certain Dominican officials who believe that these low prices—driven by Chinese state subsidies—benefit consumers. What is often overlooked is that such prices will only persist while competition exists; once it disappears, the landscape inevitably changes.
This raises a critical question: which sectors will remain in Dominican hands? It is particularly troubling that local industries capable of competing internationally—and that pay income taxes—are now facing competition from Chinese companies operating under free trade zone regimes, which are exempt from taxation yet capture the same market.
This is not an argument against foreign investment; on the contrary, it is necessary. What is questionable is the permissiveness toward unfair competitive practices that the State itself tolerates, fully aware of their implications. Investments of uncertain origin are approved, while companies in free trade zones are authorized in ways that erode the fiscal base by displacing businesses that do comply with their tax obligations.
There is no denying that the Chinese model has proven effective. A recent example illustrates this: despite tariffs imposed by the United States—which reduced its exports to that country by approximately 10% during January–February of this year—China has managed to increase its global exports by nearly 22%, supported by the same framework of state financing and subsidies.
What is happening in the Dominican Republic is not an isolated event; it is being replicated across Latin America. The dilemma is clear: our authorities and business leaders must act in a timely manner or face the consequences in the medium term.
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