Cuban leader Raul Castro is welcomed to Beijing by China's head of state, Hu Jintao on Thursday. Photo from Xinhua/Yao Dawei
Cuba is looking to an old Eastern ally for new economic support.
Raul Castro, who effectively replaced his brother Fidel in 2006, but only formally took over the reins of power in 2008 (becoming both Prime Minister and President), is on his first trip to China as head of state.
In past years, as China's international reach grew, Cuba actively courted Beijing in order to overcome the economic troubles plaguing the country after the fall of the Soviet Union and as the American embargo continued.
China is now Cuba's second-largest trade partner (Venezuela is the first), with business conducted between the two countries worth approximately $1.8 billion in 2011. Cuba is China's largest Caribbean trade partner.
The two countries also share a close history of diplomatic and ideological mutual support dating from the Cold War. As two of the last few remaining Communist regimes on the planet, both see an interest in maintaining good relations and seeking out mutual cooperation.
Chinese exports to Cuba mostly include finished goods like appliances, medical equipment, and machinery. The two countries are cooperating on tourism development, biotech exchanges, and agricultural trade. Cuba is providing China with nickel, rum, sugar, and potentially soon, oil.
In the summer of 2011, Chinese Vice-President Xi Jinping visited Cuba and signed 13 economic agreements including soft loans, technical assistance, andagricultural trade. Castro's current visit to Beijing is expected to further strengthen 10 of those cooperation areas.
Included within the agreements is Chinese funding for a major oil refinery located at the port of Cienfuegos. Six billion dollars is expected to be spent by China, a Cuban-Venezuelan joint venture, and France's Technip in order to double capacity at the refinery to 150,000 barrels per day.
State-owned oil giant Chinese National Petroleum Corporation also concluded agreements last year to lease 5 offshore oil blocks in Cuba. In past years, China has provided numerous loan agreements worth tens of billions to South American countries like Venezuela, Brazil, and Ecuador in order to receive hundreds of thousands of barrels of oil each day. As oil exploration and development continues in Cuba, the same strategy could increasingly be used with Havana to secure long-term supplies of petroleum.
Although the specific amount was not detailed, China and Cuba signed further agreements on Tuesday for China to offer new zero-interest loans, television equipment, and money from the Chinese Export-Import Bank to upgrade medical facilities in Cuba.
The gift package from China was welcomed with high words of praise from Castro, who applauded China's recent economic development as a model for others and added that We are very pleased that in recent years, the relationship between China and Cuba has continued to deepen and develop.
China meanwhile was wary of pushing its own system as an alternative model to neoliberal economics, especially one that could be established so close to American shores.
Nevertheless, the Foreign Ministry stated that it was happy to share its experiences in socio-economic and political development from past years, so as to promote mutual development. It qualified however, that different countries should make determinations based on their own conditions.
Chinese President Hu Jintao, however, did offer strong words of support for the Cuban regime.
The official Xinhua news agency noted that Hu hailed the achievements Cuba has scored in the socialist construction. He said China will always support Cuba inmaintaining its sovereignty and exploring a socialist way with its own national characteristics.
Raul is expected to meet with the top leaders of the Chinese government, including Wu Bangguo, the chairman of the National People's Congress, and Premier Wen Jiabao. Vice President Xi Jinping and Vice Premier Li Keqiang, who will replace Hu and Wen respectively, will also welcome the Cuban leader.
Foreign policy and economic experts say Cuba could look to China's three-decade long growth period as an example of how to partially liberalize the market without fully opening the political system. China's experiences in promoting market stability, increasing exports, attracting foreign investment, and promoting national industries could all provide powerful case studies for Havana.