Two socialist nations intent upon expanding their productive capacities recently reached agreements for expanding trade relationships and cooperation over a range of mutually beneficial endeavors. Cuba is seeking alternatives to dependency on the capitalist global economy and ways to lessen the impact of the U.S. economic blockade. China fills the bill.
In mid-November, Chinese President Hu Jintao and 200 Chinese businesspersons took part in the first Cuba-China Investment and Trade Forum in Havana. Signed were 16 agreements covering Chinese investments, trade arrangements and credit, joint ventures, and other cooperative projects.
The Chinese contingent was nearing the end of a two-week Latin American tour that had yielded trade accords with Brazil, Argentina, and Chile. Hu Jintao and his entourage participated in the Asia-Pacific Economic Cooperation Forum held in Santiago, Chile.
Cuba pledged to supply China with 4,000 tons of nickel yearly through 2009. China will invest over $500 million to finish building a Soviet-abandoned nickel plant in eastern Cuba, and will prospect for nickel throughout the island. Cuba has large reserves of nickel, essential for making stainless steel but in short supply throughout the world. For five years, Cuba has supplied China with half its nickel requirements. Interestingly, under the U.S.-imposed blockade, metal products entering the U.S. must be certified free of Cuban nickel.
The two nations agreed China would manufacture refrigerators, washing machines, and air conditioners in Cuba for the Cuban market. China will send one million television sets to Cuba, donate supplies for Cuban hospitals and cloth for school uniforms. Plans include Chinese lessons in Cuban schools and university- level educational exchanges. China granted Cuba a ten-year extension to repay large interest-free loans.
The accords covered joint ventures in biotechnology, telecommunications, light industry, and tourism. Trade with China already makes up 10 percent of Cuba’s foreign exchange and generated $600 million in the first nine months of 2004, a 36 percent rise. China is now Cuba’s third largest trading partner, after Venezuela and Spain.
The accords are part of China’s campaign to expand trade relations throughout Latin America. Chinese state owned enterprises (SOE) plan to invest over $10 billion in Argentine mining and transportation. The Brazilian state oil company will sell China, its third biggest customer, 50,000 barrels of oil per day, and China will buy vast quantities of Brazilian bauxite, iron, zinc, soy, and lumber. In 2004, Chinese SOEs put $1.04 billion into Latin American economies — 36.5 percent of all foreign direct investment in the region. At the Santiago forum, Hu and his colleagues predicted $100 billion worth of investments in Latin America over the next 10 years.
Venezuelan President Chavez made his third visit to China in late December. Under eight bilateral agreements, China gained access to Venezuelan oil and natural gas reserves, preferential terms for operating 15 oil fields, and investment opportunities in new refineries. Venezuela committed to shipping 120,000 barrels of oil per day to China.
The prospect of China’s active trading role in Latin America is shaking up a few stereotypes. The world’s head capitalist and military chieftain, for example, may be losing out in its own back yard. And socialist nations are putting entrepreneurial tools to good use. It appears too that international trade is useful for more than just profiteering and national aggrandizement.
At ceremonies honoring Hu Jintao, Fidel Castro said, “Relations between China and Cuba today constitute an example of transparency and peaceful cooperation between two nations that are sustaining the ideals of socialism.”
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Courts weigh in on Cuba travel restrictions
Over the last two years, the U.S. government has cracked down on travelers going to Cuba without a Treasury Department license. In the first case completed by administrative law tribunals adjudicating travelers’ appeals, Judge Robert Barton ruled Jan. 11 that Craig Ostrem of Edina, Minn., had to pay $780.
Ostrem had faced the standard $7,500 Treasury Department fine. Judge Barton agreed that a Canadian tour agency had misrepresented Ostrem’s 1999 scuba-diving trip as legal. The judge resurrected an old question: whether officials should target travelers or trip organizers.
Three administrative law judges appointed by the Bush administration are now processing 20-30 cases at a time.
Ostrem’s attorney said Americans visiting relatives in Cuba are warned rather than fined for a first offense. Among other contradictions, U.S. agribusiness minions peddle food products in Cuba, illegal travelers with large protest groups are rarely bothered, and enforcers ignore tens of thousands of illegal trips yearly.
Rep. Barbara Lee (D-Calif.) is supporting medical missionaries Michael and Andrea McCarthy, of Port Huron, Mich., fined $9,750 for taking medical supplies to a convent in Havana in 2001.
— W.T. Whitney Jr.
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