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Posted November 16, 2008 by publisher in Cuba-World Trade

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China’s President Hu Jintao travels to Cuba Monday for a close-up look at the government of new President Raul Castro, a fellow communist struggling to lead his island nation through the devastating effects of three hurricanes and the international financial crisis.

Hu visited Cuba in 2004 to oversee the signing of 16 cooperation agreements and was expected to sign more on the economy, trade, education and other areas during his two-day stop, the Chinese government said.

Hu, who attended Saturday’s Group of 20 global economy summit in Washington, was to stop in Costa Rica Sunday before starting his two-day visit to Cuba. He will go to Peru later in the week for the Asian-Pacific Economic Cooperation summit, then on to Greece.

Cuba’s economy was still suffering from the demise of the Soviet Union during Hu’s last visit but has rebounded largely due to integration with oil-rich Venezuela and Chinese loans.

China is now Cuba’s largest trading partner after Venezuela at $2.3 billion in 2007—four times what it was in 2004—despite stark differences in their economic policies and little direct Chinese investment.

China adopted market economics long ago while Cuba still has a Soviet-style command system where more than 90 percent of the economy is in state hands.

The Chinese loans are starting to come due at a time when Cuba has suffered $10 billion in damage from the three recent storms, prices of nickel, its main export, have dropped sharply and oil prices, which sustain ally Venezuela, have declined.

Restructuring those debts and future credits will certainly be on Hu’s agenda, western diplomats said.

—————————————- Havana Journal Comments—————————————-

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  1. Follow up post #1 added on November 16, 2008 by publisher with 3905 total posts

    Why does just about every business story related to Cuba have the phrase “restructure debt” in it.

    Now Cuba will claim it can’t pay China for anything because they have been working on hurricane damage restoration. While that might be true, Cuba will really be using the hurricanes as an excuse. Then Raul will cry even harder because Cuba can’t get any loans because of the global financial crisis.

    Guess what… China will restructure that “debt” (read donations) and probably extend more credit (read more donations).

    And Raul gets to live another day. What a life.

    Cuba consulting services

  2. Follow up post #2 added on November 16, 2008 by gframe

    Looks like a good plan to me, hey if the yanks can borrow from China?

  3. Follow up post #3 added on November 19, 2008 by Asoka

    USA is heavily indebted to China & Japan.
    Even the unholy war against Iraq was financed with Chinese credit.

    Raul should adopt the Chinese model that has delivered and discard Fidel’s Soviet one.

  4. Follow up post #4 added on November 19, 2008 by manfredz with 464 total posts

    I dont think the chinese model is a good one to follow.
    Although better than the current Cuban system, it still allows a few to become superrich and the masses live in utter poverty and work in dismal povertyunder sweatshop conditions. 
    A variation of the US/Canada/European style model of capitalism I think is best - but the important thing is that the Cuban people and not the government set the direction they wish to evolve into.  That means they need to work on both the human rights and government representation models so that the people have a much better say in this direction.

  5. Follow up post #5 added on November 19, 2008 by MiamiCuban

    Sorry, but I can’t help comparing this to the current state of our own economy in the U.S.  I wonder what would happen if in the midst of our financial system meltdown and automotive industry bankruptcies one-third of the U.S. were simultaneously hit by major hurricanes, tornadoes and earthquakes.  I think we’d probably be interested in a little debt restructuring of our own.

  6. Follow up post #6 added on November 19, 2008 by publisher with 3905 total posts

    Castro never intended to pay off any debt anyway. Now he has the hurricanes to thank for that.

    The difference is that US debt is the highest rated in the world and Cuba’s debt is the lowest or close to it in the world.

    Sorry to rain on your parade again but once again, big difference between the US and Cuba.

    Why do you think Raul was singing yesterday?

    Because he doesn’t have to pay his bills or ask for forgiveness. The hurricanes have been great for Raul so long as he can keep people from attacking him with sticks.

    Cuba consulting services

  7. Follow up post #7 added on November 19, 2008 by MiamiCuban

    Yes—I agree—big difference between U.S. and Cuba—cannot come even close to comparing.  Yet HAVANAJOURNAL is all about how “short” Cuba comes when compared to U.S.

  8. Follow up post #8 added on November 19, 2008 by publisher with 3905 total posts

    You started your comment with"Sorry, but I can’t help comparing this to the current state of our own economy in the U.S.” but now you can’t compare?

    I don’t know what you mean by short.

    PS If you register as a member, the name and email boxes above the comments will go away when you are logged in and you will get a number next to your screen name indicating the number of posts you have left.

    I don’t agree with much you say but since you are active, you might as well make it a little easier to post and get some numbers.

    Cuba consulting services

  9. Follow up post #9 added on November 19, 2008 by MiamiCuban

    Thanks for the tip, Publisher. 

    True—we rarely agree.  But I guess that keeps the debates interesting.  What fun would it be to have everyone agree with everything you say?

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