Cuba, China and the significance of their economic ties (III)

_china-cuba-petroleo

By José Luis Rodríguez

The economic relations between Cuba and China were restarted with the visit of President Xi Jinping in July 2014. The 29 approved agreements between the two countries on the occasion of this visit – that was part of the last stage of the Latin American tour of the Chinese leader showed new qualitative aspects and the greater reach of the economic ties that unite to both nations.

Without attempting to exhaust in detail the analysis of all agreements, among the most important aspects highlight the granting of a credit for the construction of a multipurpose terminal in the port of Santiago de Cuba for an estimated $ 100 million amount. This new facility will be 200 meters long, will feature three cranes gantry and two stores, which enables to serve ships of up to 40,000 tons of displacement, far above the 25 thousand that currently supports this moment.

Highlights also the creation of a new joint venture for the construction and operation of a real estate complex associated with golf courses in the area of Bellomonte, East of Havana. Although it has not reported more on the current draft, one designed earlier in that location contemplated 160 housing capabilities and two golf courses of 18 holes each. It is estimated that a similar investment would be about $ 350 million in financing.

In terms of the facilities of funding for investments diverse credits were granted among others, destined to the purchase of equipment and consumptions for three producing plants of pest-control substance and to a laboratory of high security. Also one for the construction of lines of aseptic packaging and Give-Pack for the factory of fruits and canned in Ciego de Avila.

Of great importance is the granted for the acquisition of equipment of telecommunications, which is united to the provision of equipment for the second phase of the project of unfolding of the digital television with Chinese norm in Cuba, as well as the collaboration and interchange in the field of the telecommunications and computer science.

It is noteworthy that – on the one hand – this development has allowed since the middle of the last decade qualitatively improve TV broadcasts in the country, at the time that increased production of televisions in colors in Cuba. On the other hand, china injection technology in the field of information technology and computing has enabled a gradual recapitalization of these teams, which are vital for almost all aspects of the development of the country.

Previous appropriations joined the one intended for the execution of projects or supplies of materials and equipment, and in the area of donations it was agreed also directed at the same objectives, another of transport and office equipment, and equipment for environmental monitoring.

The energy sector will continue to benefit from Chinese collaboration for oil recovery field Seboruco, as well as the service of drilling of oil wells up to nine thousand meters of depth. Add to that collaboration in programs of energy saving and development of renewable energy, which is expected to reach around 24% of presence in the power generation within 15 years period.

Taking into account the advances in biotechnology, also has importance the extension of the current agreement for collaboration in this field, as well as what has been agreed in the industrial sector, health, education and culture. Also achieved promising agreements on livestock and agricultural production.

In terms of foreign trade, ensured the supply of nickel by five years to the Chinese market, element significant if one takes into account that 83% of revenues from export from Cuba to China are associated with ore.

The financial flexibility for the liquidation of the Cuban debts from previous years was again evident, as a sample of a few relations based on collaboration for the development of our country, it contrasts very clearly what happens in today’s world.

Indeed, to the main processes of renegotiation agreed in 1995, 2004 and 2010, that have enabled Cuba to honor its obligations gradually, joined currently postponement for ten years from the start of the payment of the loan interest-free Government signed in December of 2003.

Additionally it must be indicated that interests for several of the credits agreed will not be loaded recently.

Thus, agreements with the Asian giant, which is in second place in our commercial operations steadily over the past 25 years, allow to expect a gradual move towards new developments in the field of biotechnology industry, tourism and investment associated to it, the use of renewable energy, industrial and agricultural development information technology and telecommunications, as well as the rehabilitation of transport and infrastructure of the country.

All this allows us to consider the favorable prospects for these relations for the future of our economy.

* The author is an advisor of the center of research of the global economy (Havana)
– See more at: http://www.cubacontemporanea.com/en/news/cuba-china-and-significance-their-economic-ties-iii#sthash.O3XAWV7U.dpuf,

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