Cuba, the only communist country in the Americas and the first in the Western Hemisphere to establish diplomatic relations with China, is experiencing a continuous shrinking of trade with China in recent years, signaling a cooling economic relationship between the two communist nations.
Due to the scarcity of raw materials and economic downturn, Cuba has almost nothing to export to China. In recent years, the tightening of U.S. sanctions has exacerbated Cuba’s debt problems and led to a reduction in imports. The economic collapse in Cuba has disrupted commercial relations between China and Cuba.
According to the Financial Times, while China’s trade with Latin America has grown more than tenfold in the past 20 years, Cuba’s imports from China have decreased from $1.7 billion in 2017 to $1.1 billion in 2022, the latest year for which data is available.
Although investment data from China in Cuba has not been publicly disclosed, Cuban economist Omar Everleny said that out of around $160 billion invested by China in Latin America and the Caribbean from 2005 to 2020, only a meager portion went to Cuba.
It has been reported that some Chinese companies involved in Beijing-supported deals in Cuba have been burdened with enormous debts owed by the Cuban government. A businessman engaged in trade with Cuba mentioned, “All major state-owned enterprises, such as Huawei and Yutong, have been owed hundreds of millions of dollars.”
Since the onset of the Covid-19 pandemic, Cuba’s sugar production has plummeted to its lowest level in over a century, barely meeting domestic demand. This has led to the termination of a long-term agreement to annually export 400,000 tons of sugar to China.
While U.S. think tanks warn that China is leveraging Cuba’s strategic position to establish electronic monitoring stations on the island, the relations between Cuba and China have actually grown increasingly faint. Beijing has established a “comprehensive strategic partnership” with countries like Argentina, Brazil, Chile, Ecuador, Mexico, Peru, and Venezuela but has not done so with Cuba.
Since 2018, Cuba has been part of China’s Belt and Road Initiative, and China remains the second-largest trading partner of this island nation, following only Venezuela. Cuba and China have also signed a cybersecurity agreement, allowing Chinese companies like Huawei, TP-Link, and ZTE to install digital infrastructure in Cuba.
However, a Western businessman based in Havana informed the Financial Times that overall Chinese imports to Cuba have significantly decreased.
Cuba continues to export nickel, zinc, luxury cigars to China, lease healthcare personnel to China, and collaborate in the field of biotechnology.
During the pandemic, China has donated medical equipment to Cuba, with a donation of $100 million last year and donations of rice and other goods this year. Yet, the two countries have not pursued a greater level of economic integration.
Political scientist William LeoGrande stated, “China will not provide significant charity aid.”
“Cubans are in urgent need of assistance, and they are not getting much in return,” he said.
“China (the CCP) is not Cuba’s sugar daddy,” former U.S. intelligence officer Fulton Armstrong said, “For both countries, it’s mainly about mutual solidarity in rhetoric and does not constitute a strategic relationship.”