Posts Tagged ‘China’

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

August 21, 2014


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

August 10, 2014

_1-yutong_0 (Yutong)

By José Luis Rodríguez

As it has been reported, during the recent visit of the Chinese President, Xi Jinping, to Cuba, signed 29 agreements covering a set of areas of significant importance for our country. It is not the first occasion that highlights the significance of our economic relations with the Asian country. However, there are few jobs that allow to have a more complete idea of these relationships. Hence the desirability of making a brief recount to assess their current prospects.

From the establishment of diplomatic relations, Cuba China trade developed rapidly and in favorable conditions between 1960 and 1965. However, the errors associated with the Cultural Revolution in the Asian nation led to a reduction in the profile of relations with the island, a phenomenon that would extend until the beginning of the year 80.Ya since 1988, with the creation of the ® Intergovernmental Commission for trade and economic relations, would begin a new stage for the development of these ties.

Thereby, during the 1990s the trade with China took second and third places in Cuban imports and weight in the total trade of the country rose from 4.7% in 1990 to 8.2 per cent in 1995, and remained at 7.6% in the year 2000.

Additionally, in this difficult period the Asian nation agreed to postpone payment debt in 1995, and continued offering commercial loans for the imbalance of Exchange throughout the Decade, which happened to be held in a currency freely convertible into 1999.

From the year 2000 the commerce continued being developed, staying China in the second place, when growing its participation to 10.2% of the Cuban foreign trade in 2005. As it leaves from the impulse for this relation, in 2004 the Joint Work group Cuba-China for the Cooperation in the Biotechnology was created.

During the second half of the year 2000, the trade with China reached a peak in 2007, when it came to represent 17.8% of the total and 25.2 per cent of Cuban exports – basically composed of sugar, nickel, and medications, including products of biotechnology, while imports reached 1 518 million dollars, 15.1% of the total.

From 2004 were important commercial loans that promptly allowed to fast forward in economic and social activities of importance to Cuba.

In this sense, the island has benefited from a credit of $ 200 million to expand telecommunications, which would have bearing on the possibility of extending telecast by a greater number of channels, and the other for $ 150 million to produce the ATEC-HAIER televisions in the country.

Within the framework of this expansion – and particularly in referred to the purchase of effects the electric home appliances like part of the process known like Revolution Energetics, designed for the saving of electricity in those years a Memorandum of Understanding subscribed in 2006 by means of which a ceiling of funding with a view to covering commercial operations was created with short, medium and long term by 1 800 million dollars.

As it leaves from these resources were possible to begin the process of recapitalization of the transport of passengers, first with thousands Yutong omnibus for long distances and later for the urban transport, until reaching 5 348 vehicles for 370 million dollars. To it one would add to the initial purchase of 12 locomotives, as well as transport specialized and of overhead.

Also it is possible to aim that in 2004 a postponement by ten years for the payment without interests remembered the pending debt of liquidation of years 1990 to 1994.

A similar proportion in the commerce of Cuba with China and its growth stayed until 2010. However, between 2011 and 2013 a tendency to the reduction in the weight of Cuban exports to China is appraised, those that diminished 32.6% until 2012, whereas the imports increased 1.1%, which took to an increase in 236 million in the Cuban trade deficit.

An analysis of the most recent stage would not be complete if not also discussed the peculiarities of foreign investment in relations with China and its impact for both countries.

(To be continued)

* The author is an advisor of the center of research of the global economy (Havana). In the analysis of relations between Cuba and China in the economic field, relies on several works produced by Dr. Julio Díaz Vázquez on the subject, published inter alia in the Observatory of china policy. Casa Asia and
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Enterprise mission of China in search of business with Cuba.

July 22, 2014

Special Development Zone Mariel (Photo:

By Venus Carrillo Ortega

Interested in incentives offered by the new legal framework for foreign investment in Cuba, and above all in the special zone development Mariel, a major business mission from China will visit the Antillean Island in the coming days.

The visit, sponsored by the Trade Development Bureau and the investment promotion agency – both from the giant Asian-takes place coinciding with the tour, which takes place from Monday the President of the People’s Republic of China, Xi Jinping, for countries in Latin America, which will include Cuba, according to the Xinhua Agency. The travel of the President was initiated by Brazil, where he attended the sixth Summit of leaders of the BRICS (Brazil, Russia, India, China and South Africa).

According to the program released by the Chamber of Commerce of the Republic of Cuba, Monday 21 shall be carried out at the National Hotel two meetings with representatives of the business community of the Caribbean nation, notably in the sectors of renewable energy, biopharmaceutical and tourism industry.

In the morning session will be held a business forum organized by the Bureau of trade development, which will be new business opportunities provided by the law 118 foreign investment, approved by the Cuban Parliament and put into force last June.

Customs, labor and tax regulations which provides special development Mariel zone to attract foreign capital will occupy the attention of participants to the Forum, as well as also presentations on the portfolio available today in the biopharmaceutical industry, renewable energy and tourism for the establishment of business with Cuba.

The program also includes a seminar organized by the China investment promotion agency where they will take part representatives of the companies Chinalight National Light Industrial Products IMP. & Exp. Corporation, and CITIC International Co.

The important Chinese delegation will hold tours of sites of economic interest with Cuban authorities, opportunity to learn first-hand the opportunities that are opening the largest of the Antilles for foreign investors.

After more of half a century of diplomatic relations, China and Cuba look for to invigorate their economic ties, whose commercial interchange grew a 25% in 2013 with respect to the previous period. An interest endorsed by the policy that drives the Asian giant towards integration with Latin America, especially its support to the Member States of the Community of Latin American and Caribbean States.

In interview of Chinese agency Xinhua to the Cuban ambassador in the Asian country, Alberto J. Blanco Silva, the diplomat stressed that the upcoming State visit of Chinese President Xi Jinping to Cuba will open a new stage of comprehensive development of bilateral relations.

“It is an occasion so conducive for bilateral relations in the medium term with all its potential, as well as share common objectives and goals”, said the official, recalling that China is the second largest partner of Cuba since 2005, while the island is the largest partner of the Asian country in the Caribbean region, which coincides with the impetuous advance who have experienced linkages”.

It is the second Latin American tour of Chinese President after the one held in May last year, which led to Xi’an to Trinidad and Tobago, Costa Rica and Mexico.

According to Blanco, quoted by Xinhua, the Chinese investment projects on the Caribbean island are slowly advancing by several factors, but a large number of Chinese companies have expressed their interest in promoting investment in Cuba which largely coincides with the point of view of Chinese scholars.

Biotechnology and the pharmaceutical industry, renewable energy, agricultural-food industry, that of packaging and telecommunications and information technology are the sectors of greatest interest and with greater opportunities to develop joint ventures between the two sides.

In just a couple of weeks will be the visit of Chinese dignitary to Cuba of the journey undertaken by Vladimir Putin, President of Russia, who also expressed interest in re launching relations with Cuba to a new stage.

From The Red square to the wall of China… no doubt, Cuba writes a new chapter in its ties with the world, marked today by the thrust of the emerging economies.
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