It’s the solely communist nation within the Americas, was the primary within the western hemisphere to recognise the Folks’s Republic of China and is described by Beijing as “good brother, good comrade, good buddy”.
However regardless of their shared political legacy — and what Washington says is a historical past of Chinese language spying exercise from Cuba — the island’s financial collapse has harm business ties with China simply as Beijing’s strategic rivalry intensifies with the Caribbean island’s arch-enemy, the US.
Chinese language commerce with Latin America has grown greater than tenfold over the previous 20 years and continues to surge: China has develop into the second-largest buying and selling companion for the area, after the US. However the import of Chinese language items to Cuba fell from $1.7bn in 2017 to $1.1bn in 2022, the final 12 months for which Cuban knowledge is on the market.
The 2 nations don’t launch knowledge on Chinese language funding in Cuba, however Cuban economist Omar Everleny mentioned it amounted to a “laughably small” proportion of the roughly $160bn Beijing invested in Latin America and the Caribbean between 2005 and 2020.
Chinese language firms concerned with state-backed offers have been owed giant sums by the Cuban state, mentioned individuals briefed on the money owed. “The entire huge state firms like Huawei and Yutong are owed lots of of thousands and thousands of {dollars} every,” mentioned an abroad businessperson who trades with the island.
Scant uncooked supplies and an unproductive financial system depart the island with little to export to China, whereas imports have diminished lately as hardened US sanctions severely aggravated Havana’s persistent late-payment issues and dried-up credit score traces.
Because the Covid-19 pandemic, sugar manufacturing on the island — as soon as a crucial trade — has plummeted to its lowest ranges in additional than a century: there’s barely sufficient sugar to cowl home necessities. That has resulted within the scrapping of a long-standing settlement to export an annual 400,000 tonnes of sugar to China.
“China will not be Cuba’s sugar daddy,” mentioned Fulton Armstrong, former US nationwide intelligence officer for Latin America. “It’s largely a relationship of solidarity statements. It’s not a strategic relationship for both nation.”
Cuba right this moment doesn’t even function amongst China’s top-tier allies in Latin America. Beijing has what it calls “complete strategic partnerships” with Argentina, Brazil, Chile, Ecuador, Mexico, Peru and Venezuela, all main commodity exporters, however not with Cuba.
China publicly helps Cuba’s proper to decide on its personal path to financial growth “in step with its nationwide situations”, however privately Chinese language officers have lengthy urged the Cuban management to shift from its vertically deliberate financial system to one thing nearer to the Chinese language mannequin, in keeping with economists and diplomats briefed on the state of affairs.
Chinese language officers have been perplexed and annoyed on the Cuban management’s unwillingness to decisively implement a market-oriented reform programme regardless of the obvious dysfunction of the established order, the individuals mentioned.
The fraying of commerce ties types a stark distinction with current many years. After greater than 10 years of utmost shortage after the Soviet Union collapsed, an inflow of imports within the early 2000s made such an affect that Chinese language manufacturers turned a part of the Cuban vernacular.
“Taking the Yutong” is now synonymous with “taking the bus” in Havana, whereas Cubans — specialists in gallows humour — baptised the lots of of 1000’s of leaky Haier fridges imported as a part of Fidel Castro’s “Power Revolution” to enhance power effectivity as “Drippys”.
Cuba has been a member of China’s Belt and Highway world infrastructure growth initiative since 2018 and China stays the island nation’s second buying and selling companion after Venezuela, which sends the nation oil in return for Cuban docs.
Beijing and Havana have a cyber safety settlement, and over the previous 20 years Chinese language teams Huawei, TP-Hyperlink and ZTE have put in fibre optic cables, WiFi hotspots and different digital infrastructure all through the island.
However Chinese language imports are “means down . . . general”, mentioned one western businessman based mostly in Havana. “Exporters are shifting away from the China-Cuba credit score traces and shifting to the personal sector.”
Cuba nonetheless exports nickel, zinc and luxurious cigars to China, leases docs in return for laborious forex cost, and co-operates on biotech.
Cuban President Miguel Diáz-Canel has twice visited Beijing and introduced again politically helpful handouts, together with medical tools throughout the pandemic, a $100 million donation final 12 months and 1000’s of tonnes of rice donations this 12 months. However he has been unable to coax higher financial integration.
“The Chinese language don’t give away a variety of charity,” mentioned William LeoGrande, professor of presidency at American College. “The Cubans proper now are ready the place they want charity, they usually don’t have a lot to supply in return.”
Beijing additionally has a a lot lower-profile safety relationship with Havana than does Moscow, which is brazenly targeted on Cuba’s geopolitical worth as a detailed neighbour of the US. Russian naval flotillas have docked in Havana twice this 12 months in a present of army power. Russian commerce with Cuba has surged lately, pushed by US sanctions on each nations and the battle in Ukraine.
There have been experiences suggesting China has renewed efforts to make the most of Cuba’s strategic location with digital eavesdropping stations on the island.
The Heart for Strategic and Worldwide Research, a Washington think- tank, mentioned in July there have been “rising indicators that China’s financial and political leverage could also be opening doorways for its army and intelligence providers in Cuba”. US secretary of state Antony Blinken mentioned final 12 months that Chinese language spying operations in Cuba have been “a critical concern”.
However requested concerning the CSIS report, a US state division official mentioned the Biden administration believed its “diplomatic outreach has slowed down [China’s] efforts to challenge and maintain its army energy world wide”.
LeoGrande mentioned some in Florida and Washington have been eager to create a “Chinese language bogeyman in Cuba”. “It serves the pursuits of conservative Cuban-Individuals, who’re all the time searching for causes to not enhance US-Cuban relations, and within the broader coverage group it serves the curiosity of those that suppose that China is a world risk.”