{"id":50031432,"date":"2019-11-05T20:11:47","date_gmt":"2019-11-05T20:11:47","guid":{"rendered":"https:\/\/stage.dialogochino.net\/?p=31432"},"modified":"2023-03-12T15:29:56","modified_gmt":"2023-03-12T15:29:56","slug":"31432-china-cubas-latest-benefactor","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/business\/31432-china-cubas-latest-benefactor\/","title":{"rendered":"China: Cuba’s latest benefactor"},"content":{"rendered":"

Ever since its founding as a communist nation in 1959, Cuba has been economically dependent on allied nations. First came the Soviet Union (USSR), then Venezuela<\/a>, and now it has a new benefactor \u2013 China.<\/p>\n

\n

70%<\/p>\n

\n
\nthe drop in Venezuela-Cuba trade since 2017
\n\n <\/div>\n <\/div>\n

The main driver of this new alliance is the crisis<\/a> in Venezuela that has left the island drastically short of crude oil. Trade between the two countries is down 70% since Venezuela\u2019s crisis began, according to the Cuban National Statistics Office<\/a> (ONEI).<\/p>\n

In 2017, the last year for which official statistics are available, Venezuela-Cuba trade was worth more than US$2.2 billion<\/a>, equivalent to 12% of GDP that year. In the past two years, Havana has received less than half the 100,000 barrels of oil per day that Caracas exported from 2002 onwards.<\/p>\n

With the dip in crude imports, the Cuban economy went into shock. Now, one of the Cuban government\u2019s main priorities is to strengthen bilateral ties with China, a task for president-elect Miguel D\u00edaz-Canel.<\/p>\n

D\u00edaz-Canel: a symbolic Cuban president<\/h2>\n

Cuba\u2019s unicameral national assembly elected D\u00edaz-Canel as president in early October, enabled by February’s constitutional reform<\/a>. The new president visited Beijing November of last year to follow up on economic accords signed in recent years.<\/p>\n

China’s Xi Jinping recently wrote<\/a> to counterpart Ra\u00fal Castro, who is still the first secretary of the Communist Party, the highest public office in Cuba: “I have the willingness to maintain close communications with you as together we write a new chapter of Chinese-Cuban friendship in the new era.”<\/p>\n

Castro also presides over the council of ministers, meaning the election of D\u00edaz-Canel is more symbolic and does not imply a change to one-party rule.<\/p>\n

\u201cI sincerely vote for the ceaseless progress of the Cuban Communist Party, the prosperity of the Republic of Cuba and the eternal friendship between both countries and parties,\u201d Xi added.<\/p>\n

China and Cuba: a historic relationship<\/h2>\n

In 1960, 11 years after the birth of the People’s Republic of China, Cuba became the first nation in Latin America and the Caribbean with which it established diplomatic ties.<\/p>\n

In recent years, the relationship has strengthened through China’s Belt and Road Initiative<\/a> (BRI), a network of Chinese-financed maritime and land infrastructure and communications projects aimed at facilitating trade between China and the world.<\/p>\n

<\/p>\n

\"Cuba
Sugar cane is Cuba's main export to China (image: Alamy<\/a>)<\/figcaption><\/figure><\/p>\n

<\/div>\n

Cuba opted to join the BRI in 2019, hoping it would be a boon to its troubled economy.<\/p>\n

China already became Cuba\u2019s main trading partner in 2017. That year, the two countries exchanged around US$1.8 billion<\/a> worth of goods. Cuba imported US$1.35 billion, mostly electrical products, and exported $379 million, with raw sugar and nickel accounting for the majority.<\/p>\n

“We hope to get involved in this project in the most committed way possible, and that this means the Chinese business sector participates more actively in the process of updating our economic model,” Orlando Hern\u00e1ndez, president of Cuba’s Chamber of Commerce, said of the BRI.<\/p>\n

Cuba provides its archipelago to be [China’s] command post in the Americas<\/p><\/blockquote>\n

Bruno Rodr\u00edguez Parrilla, Cuba\u2019s foreign minister, has reiterated that Chinese policies on trade and investment in Latin America are “highly appreciated” because they are “respectful of international law, and the independence and sovereignty of countries\u201d.<\/p>\n

Gladys Bejerano, vice president of the State Council who represented Cuba at the Silk Road forum on transparency, part of April\u2019s second Forum on the Belt and Road Initiative, said she will help the initiative \u201cgrow robust, with efficiency, transparency and ethical honesty\u201d.<\/p>\n

While Cuba will be the one who derives the most notable benefits from this relationship, China will have access to an “open door to our economy and find additional business opportunities,” said Foreign Minister Rodr\u00edguez Parrila.<\/p>\n

Mutual benefits<\/h2>\n

China intends to take advantage of Cuba\u2019s development in biomedicines. Several Chinese companies specialising in biopharmaceutics and renewable energy have begun settling in the Mariel Special Development Zone, a budding investment hub.<\/p>\n

“Cuba has advantages over other nations in the region in that area and we want to expand ties,” said Ren Zhiwu, deputy secretary general of China\u2019s National Development and Reform Commission, its top planning body.<\/p>\n

Several joint projects are already underway. These include the transition from analogue to digital television and the expansion of mobile broadband, led by Chinese telecommunications giant Huawei, and the creation of an artificial intelligence centre<\/a>.<\/p>\n

Last summer, Beijing donated Chinese-made trains to Cuba as a means of solving the problem of interprovincial transport on the island.<\/p>\n

Oil drilling company Gran Muralla (Great Wall) also helps Cuba\u2019s national Cupet explore deposits in shallow waters, a task that, without Chinese technology and expertise, had proved impossible.<\/p>\n

China\u2019s foothold on the island<\/h2>\n

In 2011, China wrote off US$6 billion of Cuba\u2019s debt. Esteban Morales, a political scientist, said “this cancellation has more weight in the relationship of both governments than even the political ideology they enact.”<\/p>\n

\n

$6billion<\/p>\n

\n
\nthe amount of Cuba's debt China cancelled in 2011 (US$)
\n\n <\/div>\n <\/div>\n

The gesture is not insignificant. In the last 18 years, only a handful of countries outside Sub-Saharan Africa have been relieved of debt.<\/p>\n

According to the World Bank<\/a>, the cancellation of debts to developing countries brings short-term benefits, but maintaining sustainable levels requires sustained economic growth, access to markets and diversified exports, which Cuba still lacks.<\/p>\n

Raul Brito, an economist, said China\u2019s gesture to Cuba has a geopolitical benefit:<\/p>\n

“China helps Cuba out of its economic crisis with some subsidies and Cuba provides its archipelago to be its command post in the Americas.\u201d<\/p>\n

 <\/p>\n

Correction: The original version of this article wrote that D\u00edaz-Canel would visit China this week. That trip occurred last year.<\/em><\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Ever since its founding as a communist nation in 1959, Cuba has been economically dependent on allied nations. First came the Soviet Union (USSR), then Venezuela, and now it has a new benefactor \u2013 China. The main driver of this new alliance is the crisis in Venezuela that has left the island drastically short of […]<\/p>\n","protected":false},"author":50000004,"featured_media":50031465,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[758],"tags":[510,544,600],"hashtags":[],"country":[20000110,50003534],"class_list":["post-50031432","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-china-in-the-world","tag-finance","tag-trade","country-china","country-cuba"],"acf":[],"yoast_head":"\nChina-Cuba relations grow closer as island seeks new benefactor<\/title>\n<meta name=\"description\" content=\"New president Miguel D\u00edaz-Canel seeks support from China as Cuba suffers knock-on effects of Venezuela crisis\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/dialogue.earth\/en\/business\/31432-china-cubas-latest-benefactor\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"China: Cuba's latest benefactor\" \/>\n<meta property=\"og:description\" content=\"Ever since its founding as a communist nation in 1959, Cuba has been economically dependent on allied nations. 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