Recent years have witnessed China’s growing economic and political influence in South America and the Caribbean. During a visit to Cuba in November 2004, Chinese President Hu Jintao pledged US$100 billion worth of investment for the region over the next decade.
Investment and Growth
Cuba’s relationship with People’s Republic of China is based predominately on trade, financial credits, and investments, which have increased significantly since the 1990s. China is Cuba’s second largest trading partner after Venezuela, demonstrating China’s rising profile in the region formerly deemed a United States preserve. The trade volume between Cuba and China in 2006 saw a twofold increase from the previous year and reached US$ 1.8 billion dollars.
Major Cuban infrastructure developments in recent years were accomplished through China’s pledge to invest in the island. In 2006, Cuba began contracting Chinese companies to modernize its crippled transportation system at a cost of more than US $1 billion. Buses plying Cuba’s highways increasingly came from the Yutong Bus Company and railway locomotives from China began to travel Cuba’s outskirts. Cuba’s ports were revamped with Chinese equipment to better handle Chinese cargo ships that began arriving in 2005 and China has provided Cuba with about US $500 million in trade cover to develop communications and electronics. In return, China imported nickel, sugar, and biotechnology products from Cuba. Due in large part to Chinese consumers, Cuba’s economy grew 12.5 percent in 2006, the fastest in the Latin America.
The 19th annual China-Cuba Inter-Governmental Commission Session was held on March 26-27, 2007, at the office of the Ministry for Foreign Investment and Economic Collaboration in Havana. The delegations analyzed the behavior of the economic and trade relations during 2006, and approved strategic projects for 2007, including a contract between CUPET (Cuba Petroleum) and SINOPEC (China’s state oil company) signed in late 2005 that calls for joint production in Cuba’s offshore areas of high potential yield, off the coast of Pinar del Río. Cuba is planning more deep-water drilling to search for deposits of crude oil and intends to increase oil production by 100,000 tons this year. The site is less then 100 miles from Florida’s coast.
Political/Economic Advances
Historically, China’s pursuit of free-enterprise policies is in stark contrast to Cuba’s centralized economy. However, due to health issues Cuban leader Fidel Castro has temporarily handed the presidency and the post as the first CCP secretary to his younger brother Raul Castro in July 2006. Since July, speculation about the future direction of Cuba’s economy has risen. Raul is known to admire the Chinese model of economic development, which is designed to keep the Communist Party in power but scraps economic socialism for a highly regulated version of state capitalism. Though Fidel has begun to slowly return to the political arena, Fidel’s advanced age and health problems will reduce his functionality, allowing Raul to pursue economic policies in line with the Chinese model – export oriented, market-style economy (Previous Report).
On February 28, 2007, a senior official of the Communist Party of China (CPC) met with a Cuban Communist Party (CCP) delegation in Beijing, and pledged further exchanges between the two parties. This was the first CCP delegation to visit China since Castro’s health began to deteriorate in July 2006. The CCP delegation visited China to learn the socialist construction with Chinese characteristics and enhance the cooperation between the two parties. Wu Guanzheng, a member of the Standing Committee of the Political Bureau of the CPC Central Committee stated, “Sino-Cuban relations have entered a new era of all-around development”.
Additionally, officials stated that political and cultural exchanges were also recently addressed at the 19th annual China-Cuba Inter-Governmental Commission Session.
Increased Military Presence
On March 7, 2007, a top-level delegation of China’s Popular Liberation Army visited Cuba to discuss increasing bilateral relations. The delegation visited military units and places of historic and cultural interest. Other recent delegations have included Chinese Second Artillery officers who command China’s strategic and tactical missile forces. Increased Chinese military activity in Cuba could suggest the near-term development of Chinese military bases in Cuba. Current Chinese military interests in Cuba are centered on surveillance. China has operated a signal intelligence station in Bejucal, south of Havana since 1999. The Chinese also have military personnel stationed at a surveillance post in Santiago de Cuba. Additionally, China continues to provide the Cuban military with equipment.
Future Expansion
China’s interest in the Western hemisphere is not limited to Cuba. However, China’s strategic relationship with the only communist regime in the hemisphere is an increasing priority. The growing economic relationship has allowed Cuba to explore the possibility of an economic overhaul that will allow for a potential political shift without disrupting the status quo. In return, China gets to explore oil opportunities and maintain a military presence just miles from the US. Sino-Cuban relations will continue to grow as China continues its strategic expansion into Caribbean and South American nations.
