Cuba Transition Project

  CUBA FACTS
  Issue 21- May 2006

Cuba Facts is an ongoing series of succinct fact sheets on various topics, including, but not limited to, political structure, health, economy, education, nutrition, labor, business, foreign investment, and demographics, published and updated on a regular basis by the Cuba Transition Project staff.

CUBA-CHINA RELATIONS

    During the past few years China has become one of Castro’s most important allies. Trade, credits, and investments have increased significantly. China is exploring for petroleum on Cuba’s north coast and has provided Cuba with sophisticated electronic capabilities. Following are the highlights of this relationship:

I. COMMERCE

- Bilateral trade between China and Cuba in 2005: US$777 million (US$560 million of total were Chinese exports to Cuba)(1).

Transactions

- China is sending a growing amount of durable goods to Cuba. Chinese goods have become the primary tools both in the planned revitalization of Cuban transport infrastructure and in the “Energy Revolution” of 2006 to provide electricity to the Cuban population. Some large-scale transactions include:

  o Locomotives
  Cuba has purchased 100 locomotives from China for US$130 million(2). Cuban railways have been deteriorating for years due to lack of maintenance, equipment, and spare parts. Under this new program, rail transport has risen by 13 percent, and food transport by rail rose by 60 percent in 2005 compared to the previous year(3). Also, 1,000 train cars have been repaired(4).

  o Buses
  Cuba signed a contract for 1,000 Chinese buses for urban and inter-provincial transportation(5). The bus system has been collapsing due to lack of maintenance and spare parts, leading to improvised mass transit that is neither effective nor efficient.

  o Refrigerators
  Due to crumbling electrical infrastructure, stop-gap measures are being implemented throughout the island to address rising demand. One of these is the replacement of older appliances with newer, more efficient models, including 30,000 Chinese refrigerators(6).

Investments

Nickel
- China invested US$500 million in the completion and operation of Las Camariocas, an unfinished processing facility from the Soviet era. Under the agreement, Cubaniquel, the state-run nickel producer, owns 51 percent and their Chinese counterpart, government owned Minmetals Corporation, owns 49 percent. Financing for the project stems from the China Development Bank, with Sinosure, the Chinese Export and Credit Insurance Corporation, providing guarantees(7).

Oil
- CUPET (Cuba Petroleum) and SINOPEC, the Chinese state oil company, have a contract for joint production in one of Cuba’s offshore areas of high potential yield, off the coast of Pinar del Río(8).

Biotechnology
- China has expressed interest in expanding ties in biotechnology. In December 2005, the two countries signed an agreement to develop biotech joint ventures within the next three to five years(9).
- As a result of this collaboration, two manufacturing plants utilizing Cuban technology and processes have been constructed in China(10):

  o Chanchun: production of recombinant pharmaceutical proteins (genetically engineered proteins used for a number of medical interventions).
  o Beijing: production of humanized monoclonal antibodies. (These can be used to suppress the immune system - to limit rejection of a donated organ, for instance - or to eliminate or inhibit malignant cells).

II. POLITICAL RELATIONS

“We are willing to work with our Cuban comrades to create a beautiful future of friendship and cooperation between our two countries.”
- Hu Jintao, November, 2004

Recent Visits

- Chinese President Hu Jintao visited Cuba in November 2004(11), which coincided with a five day tour of a delegation of senior North Korean generals including Vice Marshal Kim Yong Chun, chief of staff of the Korean People’s Army(12).
- Meeting between Fidel Castro and visiting Chinese State Counselor Chen Zhili, February 2006(13).
- Minister of Public Health and Politburo member, José Ramón Balaguer, visited China and met with his Chinese counterpart, Gao Quiang, April 2006(14).

III. MILITARY RELATIONS

“…the most basic form of ancient Chinese warfare is called “the side principle.” This means to avoid clashing with the enemy’s powerful sword…at his point of strength, but using one’s sword to cut into the warrior’s exposed side.”
- from Unrestricted Warfare, a treatise of military strategy published by the People’s Liberation Army.


Recent Visits

- Raúl Castro, Cuba’s Defense Minister, visited China in April 2005. He met with President Hu Jintao, as well as with numerous high-ranking military officials(15).

- A Chinese delegation of high-ranking military personnel, including the head of the Popular Liberation Army, visited Cuba in November 2005. Their tour included a number of military installations and review of several Cuban military units(16).


Chinese Signal Intelligence and Cyberwarfare

- China has been operating a signal intelligence station in Bejucal, south of Havana since 1999. This facility has numerous satellite communications antennas which could be utilized for the interception of military and civilian communication traffic in the United States.

- The Chinese also intercept US military satellite communications at a facility located northeast of Santiago de Cuba(17).

- China also provided the Castro government with sophisticated antennas to block Radio Martí signals(18).

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Notes

1. “Trade with China helps Cuba to move up a gear,” Financial Times, March 8, 2006.
2. Fidel Castro Public Address, May 1, 2006.
3. “12 Chinese locomotives arrive in Cuba,” People’s Daily, January 10, 2006.
4. “Cuba to buy more vehicles from China,” Granma Internacional, February 17, 2006. http://www.granma.cu/ingles/2006/febrero/vier17/9yutong-i.html
5. “12 Chinese locomotives arrive in Cuba,” People’s Daily, January 10, 2006.
6. “Entrega empresa china primer lote de refrigeradores para Cuba,” Granma, March 15, 2006.
7. “China edges out Western investors in Cuba nickel,” Reuters, November 23, 2004.
8. “Firman Cuba y China contrato para producción compartida de petróleo,” Granma, January 31, 2005.
9. “Pacto biotecnológico de Cuba y China,” Office of Cuba Broadcasting, December 29, 2005. 10.“Ampliarán Cuba y China colaboración en biotecnología,” Granma, February 12, 2006.
Press Release, Center of Genetic Engineering and Biotechnology, Business Development Group. http://gndp.cigb.edu.cu/Press%20Release/cuban%20and%20chinese%20biotech.htm
11. “China’s Hu boosts Cuba ties in first visit,” Reuters, November 22, 2004.
12. “Conversaciones oficiales de jefes militares de Corea y Cuba,” Granma, November 25, 2004.
13. “Castro visits Chinese Embassy, meets senior Chinese official,” Xinhua, February 13, 2006.
14. “En China ministro cubano de salud,” Granma, April 6, 2006.
15. “Raúl Castro in China at the start of a tour of Asian countries,” Granma Internacional, April 19, 2005.
16. “Visitará nuestro país delegación militar china,” Granma, November 4, 2005. Also see “Cuba, China discuss military cooperation,” VOA News, November 5, 2005. http://www.voanews.com/english/archive/2005-11/2005-11-05-voa31.cfm?CFID=12847980&CFTOKEN=23094362
17. American Foreign Policy Council, China Reform Monitor No. 487, March 3, 2003. http://www.afpc.org/crm/crm487.shtml
18. “Those Men in Havana Are Now Chinese,” Wall Street Journal, July 30, 1999.

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