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Posted September 10, 2004 by publisher in Cuba-World Trade

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By Patricia Grogg | Atimes.com

The Cuban government is attempting to strengthen and expand trade with China, the country’s third-largest trading partner after Venezuela and Spain, while preserving the distance between its own brand of socialism and the giant Asian country’s “market socialism”.

Havana’s strategy is not only aimed at boosting cooperation and trade flows, which in 2003 totaled US$357 million, but at attracting greater investment from China as well.

Cuba’s Ministry of Foreign Investment and Cooperation will present 41 proposals for joint ventures at the eighth China International Fair for Investment and Trade (CIFIT), one of the biggest such events in Asia which ends this weekend in the port city of Xiamen.

According to the organizers, the fair, sponsored by China’s Trade Ministry and the Xiamen city government, is aimed at promoting cooperation and trade between China and the rest of the world. The host city is one of China’s leading special economic zones, and is one of the main international business areas in Asia.

Cuba is exhibiting a varied sample of its main export products in the fair, and representatives of more than 30 state enterprises are taking advantage of the occasion to seek out new business opportunities, sources at the Ministry of Foreign Trade told Inter Press Service.

Cuba’s proposals for investment opportunities for China in this Caribbean island nation of 11.2 million are in areas like the fishing industry, footwear and garments, wood and metal furniture, medical equipment and sugarcane by-products.

Some of the proposed projects are targeting medium-sized businesses, but others require large amounts of capital, the director of the Investment Promotion Center, Anaiza Rodriguez, said in an interview with Cuba’s weekly business magazine, Negocios. Rodriguez said that already 10 joint ventures are in operation, six in Cuba and four in China, as well as three “cooperative production contracts”.

The four joint ventures in China are in the pharmaceutical industry, high-tech medical equipment, genetic engineering and biotechnology, including a company dedicated to the joint development, production and marketing of products for the treatment of cancer and autoimmune diseases. The Biotech Pharmaceutical Ltd Corp is currently building a modern production plant in the Beijing Development Zone, one of China’s most important.

Although Cuba’s trade with China exceeded $600 million in 1990, it had declined to $268 million by 1995, largely due to the drop in this Caribbean nation’s sugar production. Up to 1990, Beijing was buying more than a million tons of sugar a year from Havana.

In the past few years, China’s imports from Cuba have expanded to include nickel, biotechnology products, fresh citrus fruits, processed citrus products, steel, coal and tobacco.

Yang Shidi, economic and trade adviser in the Chinese Embassy in Havana, told the Negocios magazine in Cuba that bilateral trade amounted to $254 million in the first half of the year, representing a 28% rise on the same period last year.

In addition, trade between the two countries is more balanced than in the past, with China exporting $139 million worth of goods to Cuba and importing $115 million. Of the total trade balance in 2003, Chinese exports to Cuba stood at $236 million and Cuba’s exports to China at $121 million, said Shidi, who added that Cuba is one of his country’s most important trading partners in Latin America.

The products that China imports from Cuba include tobacco, biorat (a biological rat poison), interferon (a drug that stimulates the immune system), high-tech medical equipment, vaccines and seafood.

Among Cuba’s most significant imports from China were a shipment of more than a million TV sets, the machinery for manufacturing bicycles, and telephone terminals to upgrade Cuba’s telecommunications system.

Since the late 1980s, China has revived cooperation with Cuba by granting soft government loans and donations, mainly for education and agriculture.

In 2003, China’s government gave Cuba a $9 million development loan, and it recently added the island to its list of official tourism destinations. China could become an important source of visitors for Cuba’s growing tourism industry. The World Tourism Organization reports that 17 million Chinese tourists travelled abroad last year.

Cuba and China established diplomatic ties on September 28, 1960, but bilateral relations have been chilly at times, depending on each nation’s position within the former socialist bloc.

Analysts said the 2001 visit to Havana by then Chinese president Jiang Zemin and Cuban President Fidel Castro’s 2003 trip to Beijing confirmed that ties are now based on a footing of mutually advantageous trade interests and shared political values.

But while China’s economic model is an important reference point for Cuba, local authorities underline that Cuban socialism must follow its own route, based on the preponderant role of socialist state enterprises and the tendency towards centralization.

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