Cuba
Historical Background
Sino-Cuban relations date to the mid-nineteenth century, when the first groups of Chinese indentured workers arrived to work on Cuban sugar plantations. The working conditions for this population, which were investigated and documented by a Chinese imperial mission in 1873, were overwhelmingly poor and unfree. The number of Chinese workers in Cuba eventually totalled more than 150,000, making Cuba the site of one of the largest Chinese diasporas in the region at the time (alongside Peru) and leading to the formation of Havana’s famed Barrio Chino (Chinatown). Chinese community organisations were established throughout the island, including the Casino Chung Wah, which is still active today. Chinese migrants also fought in the Cuban wars of independence beginning in 1868, and several military leaders of the 1959 Cuban Revolution were of Chinese descent.
Following the establishment of the People’s Republic of China (PRC) in 1949, the relationship between Cuba and China took a somewhat distinct trajectory from that of the rest of Latin America because of the ideological commitments of the Cuban Revolution. In 1960, Cuba under Fidel Castro became the first country in Latin America to recognise the PRC—a fact that is frequently referenced by both Cuban and Chinese officials in contemporary diplomatic relations. However, relations soured in the mid-1960s due in large part to the Sino-Soviet Split and Cuba’s allegiance to the Soviet Union. The relationship was to remain chilly for nearly 30 years.
In the wake of the collapse of the Soviet Union in 1991, Cuba entered a severe economic crisis (known in Cuba as the ‘Special Period’) and made substantial adjustments to both domestic and foreign policy to mitigate the loss of its greatest economic and political ally. This included rapprochement with China. Fidel Castro first travelled to China in November 1995 for an extended diplomatic visit. In 1996, Cuba and China implemented a new trade framework based on hard currency rather than the previous barter system. During the 1990s, China shipped hundreds of thousands of bicycles to Cuba to help meet the island’s need for transportation in the face of severe fuel shortages, eventually setting up a bicycle factory on the island with Chinese capital and technology. Bicycles remain a symbol of the Special Period for many Cubans.
Since the early 2000s, economic engagement between China and Cuba has grown substantially (mirroring a broader pattern across Latin America), particularly with regards to trade but also including foreign direct investment (FDI) and concessional lending. High-level diplomatic visits and economic cooperation agreements have become regular occurrences.
Further, both international and Cuban observers have speculated that China’s gradual economic liberalisation and subsequent growth could prove to be a model for Cuba despite the obvious differences in scale of the two economies. Across Latin America, China is perceived by some as a model for development due to its rapid economic growth and poverty reduction since the 1980s. For Cuba, viewing China as a role model is even more salient due to their political and ideological commonalities: China represents the possibility of growth under a one-party system and the gradual implementation of market reforms in a socialist economy. As such, China is a source of not only allyship, but also political legitimacy.
Indeed, Chinese officials since the 1990s have actively encouraged Cuban leaders to move towards ‘market socialism’. Although Castro (Cuba’s leader from 1959 to 2008) was reluctant to undergo these kinds of reforms, there is evidence his brother Raúl Castro (Cuba’s president from 2008 to 2018) was more enthusiastic about emulating Chinese-style socialism. China’s Reform and Opening Up may have been an inspiration for Raúl’s market-oriented reforms during his presidency—formalised in the 2011 Lineamientos de la Política Económica y Social del Partido y la Revolución (Guidelines on the Social and Economic Policy of the Party and the Revolution)—which included loosening restrictions on private enterprise, foreign investment, and property. However, the transition to a market economy has been much more gradual and halting in Cuba than it was in China—allegedly leading to frustration on the part of Chinese leaders and businesses. Today, China is undoubtedly one of Cuba’s top diplomatic allies and economic partners. Officials and state media in both countries describe the relationship, in the language of South–South cooperation, as mutually beneficial under the diplomatic label of ‘good brother, good comrade, good friend’. While one might expect a celebration of socialist solidarity in this bilateral relationship, unlike Cuba, China typically shies away from explicitly anti-capitalist rhetoric. Despite speculation that China may grow to replace Cuba’s previous economic benefactors, the Soviet Union and Venezuela, Chinese economic policy has thus far fallen short of filling those shoes.
BRI Status
Cuba was among the first countries in Latin America to sign a memorandum of understanding (MoU) to join the Belt and Road Initiative (BRI), on a state visit to China by President Miguel Díaz-Canel (in office since 2019) in November 2018. This trip was one of Díaz-Canel’s first state visits as president on a diplomatic trip that also included Russia, North Korea, Vietnam, and Laos. Cuban officials and media outlets emphasised Cuba’s aspiration to attract Chinese investment as part of the BRI, as well as highlighting the agreement as a continuation of the two nations’ solidarity. An exhibition in Cuba’s national library, the Biblioteca Nacional Jose Martí, in the same year contained images of successful BRI projects around the world, accompanied by a Chinese donation of televisions, computers, and Spanish-language translations of Chinese books.
Despite the formal agreement, few BRI projects materialised in Cuba. According to the China–Latin America Finance Database, Chinese policy banks have made no new loans to Cuba since 2017 (pre-2017 loans totalled 240 billion USD). However, some forms of aid and investment have been labelled as part of the BRI, including the expansion of digital television, 3G and 4G mobile phone technology, and public wi-fi hotspots using Chinese equipment. Further, in 2021, Cuba signed two additional BRI agreements that may pave the way for future projects. In October 2021, Cuba joined the Belt and Road Energy Partnership during its virtual Second Ministerial Conference, joining Bolivia, Suriname, and Venezuela as the fourth Latin American country in the partnership. Observers noted the potential significance of this alliance for Cuba—a country that relies in large part on ageing thermoelectric plants for its electricity. Cuba has the goal of increasing its use of renewable energy to 24% by 2030, including through the construction of biomass plants, solar parks, and wind farms (all of which have been targets of Chinese lending to the island since 2015). From the Chinese side, Cuba also represents a site for oil and gas exploration. In addition to the energy agreement, the two countries signed a new BRI agreement in December 2021 focused on implementation of the 2018 MoU. This cooperation plan emphasises priority sectors such as infrastructure, science and technology, communications, and tourism. According to the Cuban Government, this will lead to the ‘effective insertion of Cuba’ into the BRI.
Current Economic Relations
Trade: According to the Observatory of Economic Complexity (OEC), China is by far Cuba’s top destination for exports, accounting for 38.2% of its total exports in 2019 (Spain came in second, with just 10.5% of Cuban exports). Cuban exports to China are highly concentrated in sugar and nickel, followed by zinc, lead, and seafood. Meanwhile, Cuban imports from China are diversified across a range of manufactured goods, especially in machinery, transportation, processed metal, chemical, and textile sectors. This trade composition mirrors that of most other Latin American countries with China, concentrating in the export of primary products and the import of higher value-added goods. In 2019, 15% of Cuban imports originated in China, making China the second-largest source of imports after Spain.
Cuba overall has a negative trade balance, exporting goods worth 1.21 billion USD and importing 5.28 billion USD of goods in 2019. The trade relationship with China reflects this pattern, though less acutely relative to Cuba’s overall trade balance: exports to China were valued at 412 million USD and imports at 790 million USD. According to external sector data from Cuba’s National Office of Statistics and Information, trade volume with China rose dramatically during the early 2000s, peaking in 2015 and declining somewhat in the following years. While China clearly represents an important trading partner for Cuba, Cuba does not rank among China’s top trading partners in Latin America and the Caribbean given its small size.
Investment: Cuba has sought to attract international investment with urgency in recent years, especially following the economic collapse of ally Venezuela and the tightening of US policy restrictions on travel, investment, and remittances beginning in 2017. Cuba is largely cut off from international credit markets and international financial institutions, including the World Bank and International Monetary Fund. The Cuban Government has repeatedly acknowledged the need for international investment as a priority for growth but has so far been unable to attract the quantities desired, including from China. Despite cooperation agreements, diplomatic statements, and optimistic media coverage, investment has been limited. Cuba is not among the top recipient countries in Latin America and the Caribbean for Chinese FDI. Further, investment by Chinese firms in Cuba is overshadowed by that of Spanish and Canadian firms, although official statistics ranking FDI origin countries are not available.
Nevertheless, investment by Chinese companies has gained some traction in the sectors of tourism, fossil fuel extraction, and communications and health technologies. Cuban efforts to attract Chinese tourists to the island have gone hand in hand with reported plans to construct hotels with investment from Chinese firms—notably, Suntime and Beijing Enterprise. In the oil sector, China National Petroleum Corporation (CNPC) and oil-drilling company Great Wall have partnered with Cuba’s Unión Cuba-Petróleo for both onshore oil extraction and offshore exploration. Although it has been hoped for years that profitable oil deposits would be found offshore, including with Chinese-built deepwater oil rigs, so far attempts to find such deposits have not proved fruitful. In 2011, there were also reports of a deal with CNPC to expand the Cienfuegos refinery, but the financing did not materialise. Chinese firm Huawei has played a significant role in expanding internet access through public wi-fi and, more recently, partnering with ETECSA to sell smartphones. Cuba’s Mariel Special Development Zone also reportedly hopes to attract Chinese technology and construction companies, although none is currently confirmed on the zone’s website.
Aid and Other Finance: Chinese aid and lending from state-backed banks to Cuba is the highest to any Latin American country, standing at 3.35 billion USD between 2000 and 2017, according to AidData. This assistance has included frequent donations of goods and cash, including contributions to relief efforts following destructive storms such as hurricanes Irma in 2017, Sandy in 2012, and Gustav in 2008. Throughout the Covid-19 pandemic, China has donated several shipments of medical equipment and food aid to Cuba, which was celebrated in Chinese and Cuban state media. Cuba also administered the Sinopharm vaccine alongside its own domestic vaccines, though it is unclear whether these doses were donated or purchased. China has also repeatedly restructured Cuban debt repayments, including in 2004, 2008, and 2010.
Aside from outright donations, Cuba has also received several loans from Chinese financial institutions since 2015. The number and terms of these loans are opaque but, based on news reports, it is clear several loans have been made to Cuba to fund energy and infrastructure projects. Perhaps most significantly, the Chinese Ministry of Commerce, the Export–Import Bank of China (China Eximbank), and the China Development Bank have all financed solar power projects across various Cuban provinces, including Pinar del Rio, Cienfuegos, and Sancti Spiritus, contracting primarily with Chinese firms and using Chinese equipment. These projects are in various stages of completion. China Eximbank also financed the Jesus Rabi biomass power plant, which was intended to use residue from the sugarcane mill of the same name and was inaugurated in 2020. The modernisation of the Santiago de Cuba Port was financed by China Eximbank to allow for larger cargo ships and was completed in 2018. The bank also financed the purchase of a floating dock to enable the repair of large vessels in the Bay of Havana.
Chinese economic significance to the island is also evident in the widespread use of Chinese technology in large-scale public projects. China’s provision of these technologies is often celebrated in Chinese and Cuban state media as symbolic of the partnership between the two countries, although whether and how Chinese institutions were involved in financing their purchase (for example, through export credits) is difficult to determine. For example, the La Herradura wind farm, currently under construction, uses Chinese technology. In addition, Chinese-made Yutong buses have been a highly visible part of the fabric of daily life in Cuba since 2005, serving as the main vehicles for urban, interprovincial, and tourist bus travel. Chinese-made passenger train carriages were also integrated in the Cuban transport system in 2019, reportedly financed by a preferential buyer’s credit.
Key Controversies
Transparency: As is clear in the analysis of economic relations above, transparency surrounding China–Cuba relations is lacking. Reliable information concerning the specifics of bilateral agreements, investments, and lending is for the most part unavailable. While this is common across Chinese lending more generally, the opacity of the Cuban Government exacerbates the issue, as does the restrictive media environment and civic space in both countries. As a result, meaningful public debate regarding Chinese projects and their social, environmental, and economic impacts (of the kind seen across other Latin American countries) is not prominent in Cuba.
Dependence and Extractivism: As with other countries in Latin America, Cuba’s trade relations with China are asymmetrical, with China primarily providing manufactured goods and Cuba exporting commodities. Chinese investment in the region, both real and potential, is also highly concentrated in the extractive sector. Both patterns carry potentially negative environmental and economic implications for Cuban development. On the other hand, optimistic analysts argue that Chinese companies have devoted considerable attention to technology transfers and human capital development in Cuba. It is therefore unclear whether Chinese companies have assisted Cuba in upgrading its technological and manufacturing capabilities, or have instead solidified its economic concentration in commodities.
Triangular Relations with the United States: Both Cuba and China have contentious relations with the United States, which, with its allies, has criticised both countries on issues including democracy, human rights, freedom of speech, and freedom of the press. US-based critics argue the Cuba–China relationship shores up authoritarianism and is contrary to US interests. In turn, both China and Cuba condemn many aspects of US foreign policy in the name of anti-imperialism and non-intervention. Chinese and Cuban state entities frequently issue public statements affirming their solidarity with each other in opposition to US actions. Chinese officials regularly condemn the US embargo on Cuba, as well as the ongoing operation of the Guantanamo Bay Detention Camp. Likewise, Cuban state media heavily criticises US policies aimed at countering China, including, for example, the US ‘trade war’ under former President Trump, the diplomatic boycott of the 2022 Winter Olympics in Beijing, and US support for Taiwan. On several occasions, Cuba has delivered joint statements at the United Nations rejecting human rights–based criticisms of China.
Key Sources
Local media outlets:
- Dialogo Chino — Cuba.
- The Cuban Communist Party newspaper, Granma, provides national government perspectives on Cuba–China relations, and has an English section.
- Other state media outlets available only in Spanish include CubaDebate, Juventud Rebelde, and Temas.
- Dissident news outlet 14ymedio has comprehensive news coverage and opinion pieces, including some translated into English.
- Diario de Cuba has a more radical anti-regime perspective, including in English.
- Miami-based publication OnCuba has extensive English coverage of Cuba-related news.
- Other independent Cuban media outlets available in Spanish include Joven Cuba, el Estornudo, el Toque, and Progreso Semanal.
- The Association for the Study of the Cuban Economy blog and annual proceedings contain detailed economic analysis from both Cuban and international academics.
Scholarly Publications and Reports:
Alemán, Arsenio J. 2021. ‘Lazos entre China y Cuba: Una visión general del período 1900–2020 [Ties between China and Cuba: An Overview of the Period 1900–2020].’ Intus-Legere Historia 15(1): 135–52. Link.
Battista, Luis Carlos and Ricardo Barrios. 2019. ‘Is Cuba Hoping to Emulate China with Its New Constitution?’ World Politics Review, 23 April. Link.
Cheng, Yinghong. 2007. ‘Fidel Castro and “China’s Lesson for Cuba”: A Chinese Perspective.’ The China Quarterly 189: 24–42.
Cheng, Yinghong. 2012. ‘The “Socialist Other”: Cuba in Chinese Ideological Debates since the 1990s.’ The China Quarterly 209: 198–216.
Ding, Bowen and Soleidy Rivero Amador. 2021. ‘La cooperación comercial entre Cuba y China: Perspectivas actuales para el desarrollo sostenible de estas naciones [Commercial Cooperation between Cuba and China: Current Perspectives for the Sustainable Development of These Nations].’ Cooperativism and Development 9(1): 137–54.
Domínguez, Jorge. 2006. China’s relations with Latin America: Shared gains, asymmetric hopes. Working Paper, June. Washington, DC: Inter-American Dialogue. Link.
Feinberg, Richard. 2016. ‘Dancing with Many Partners: Good Balance, Poor Execution.’ In Richard Feinberg, Open for Business: Building the New Cuban Economy, 45–65. Washington, DC: Brookings Institution Press.
Feinberg, Richard. 2018. Cuba’s economy after Raúl Castro: A tale of three worlds. Foreign Policy Paper Series on International Governance. Washington, DC: The Brookings Institution. Link.
Hearn, Adrian H. 2012. ‘China, Global Governance and the Future of Cuba.’ Journal of Current Chinese Affairs 41(1): 155–79.
Hearn, Adrian H. 2016. Diaspora and Trust: Cuba, Mexico, and the Rise of China. Durham, NC: Duke University Press.
Lehoczki, Bernadett. 2012. ‘Sino-Cuban Relations in the 21st Century.’ International Journal of Cuban Studies 4(3–4): 291–306.
López, Kathleen. 2009. ‘The Revitalization of Havana’s Chinatown: Invoking Chinese Cuban History.’ Journal of Chinese Overseas 5: 177–200.
López-Levy, Arturo. 2011. ‘Reformas económicas y desarrollo en el este de Asia: ¿una experiencia para Cuba? [Economic Reforms and Development in East Asia: An Experience for Cuba?]’ Espacio Laical 3: 40–44.
Mega-Lago, Carmelo. 2018. ‘El galgo y la jicotea: las economías de China y Cuba [The Greyhound and the Turtle:
The Economies of China and Cuba].’ Cuba Posible, 30 April. Link. Xianglin, Mao, Adrian H. Hearn, and Weiguang Liu. 2015. ‘China and Cuba: 160 Years and Looking Ahead.’ Latin American Perspectives 42(6): 140–52.