Firm friends, excellent business partners
Havana, February 22:
Trade between Cuba and China is growing at a breathtaking rate, and is the most visible expression of the close ties between the two countries, which appear to have overcome past differences and reached a high point in their relations.
The rise in commerce was further accelerated by the visit of Chinese president Hu Jintao in 2004. He was accompanied by a team of 200 entrepreneurs and investors, avid for business to further augment the fast-growing Chinese economy. In the space of just one year, from October 2004-2005, bilateral trade increased from $551 million to $775.3 million, moving the Asian giant up from fourth to second place among Cuba’s trading partners.
Venezuela continues to be Cuba’s chief trading partner, selling this Caribbean island nation 90,000 barrels of oil a day. Trade with China is likely to climb quickly to the one billion dollar level, and Cuban foreign trade experts call Beijing ‘the mo-st dynamic agent’ in the ec-onomy. Cuba sees China as ‘a reliable, stable partner that does not impose political conditions’.
Elsewhere, the international context is unfavo-urable to Cuba: relations with the EU are tense, and the US has tightened trade embargo it put in place more than four decades ago. China’s support “is a big help in overcoming the economic crisis that began in the 1990s, after the dem-ise of the socialist bloc in eastern Europe and the disintegration of the Soviet Un-ion, but it is a decisive factor in propelling a return to ce-ntrally planned economy.”
“Our relations are based on mutual interest and devotion to peace, in the context of cooperation and integration,” Castro said. He announced that the purchase of 8,000 additional buses is being negotiated with mayor of Zhengzhou.
Chinese exports to Cuba include domestic appliances, the machinery for manufacturing bicycles, and equipment to modernise the country’s tele-communications, for a total cost of $200 million. Havana in turn exports sugar, nickel, tobacco, Biorat rat poison, the medical drug interferon, high-technology me-dical equipment, vaccines and shellfish. So far, the two nations have entered into ten joint ventures.
China has extended credit of $400 million to pay for infrastructure and development exports. Negotiations between the two countries are based on mutual advantage. Beijing keeps politics out of business, in accordance with its market economy, but insists on guarantees and strict fulfilment of contractual obligations. In this regard, Castro has ruled out any possible default on Cuba’s debts, not only with China but with other countries as well. According to Castro’s forecasts, Cuba will be able to pay off its debts thanks to its ‘growing development,’ and to energy savings he expects from a massive plan to regulate domestic and industrial consumption, which could amount to one billion dollars. China’s most important strategic investments are in nickel and oil, natural resources that are essential for its fast-growing economy.
Investments of more than $500 million are planned in Cuban nickel, which is very important for growth of Ch-inese steel production. China views its ties with Cuba as part of its growing relati-onship with Latin America.