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The US-Cuba-China Triangle

03 Sep 2015
By Professor Adrian H. Hearn

In re-establishing ties with Cuba, the US must now consider China’s relationship with the island nation.

On 15th August 2015 US Secretary of State, John Kerry, oversaw the raising of the Star-Spangled Banner outside the new US embassy in Havana, re-establishing diplomatic relations with Cuba after 54 years. When the two broke official ties in January 1961, it had been exactly two years since the revolution led by Fidel Castro had toppled the US-backed dictatorship of Fulgencio Batista. It had been three months since Cuba had established diplomatic relations with the People’s Republic of China.

While Cuba’s relations with the US have remained frozen until now, the island’s relations with China have matured rapidly, especially since the end of the Cold War. In the wake of Kerry’s visit, leaders from the three nations must now work out a mutually acceptable triangular relationship.

In 2014 Sino-Cuban trade amounted to $US1.4 billion, making China the island’s second-largest trade partner after Venezuela, and bringing a Chinese flavour to the daily lives of ordinary Cubans. Shops and stores throughout the island sell affordable Chinese electric fans, televisions, stoves and refrigerators, and practically every Cuban family owns a Chinese-brand appliance. Chinese state enterprises have been investing in Cuban logistics and infrastructure, and are mulling new opportunities in oil exploration, tourism, and the new Mariel Special Economic Zone (SEZ).

The expanded Mariel port is on track to become the Caribbean’s largest shipping container terminal, and the adjoining SEZ aims to be a tax-friendly international manufacturing hub, positioned to service US demand when the trade embargo is finally lifted. When that day comes, patient US investors will be forced to balance the diplomacy of peaceful coexistence with the pressures of strategic competition with China. Cuba could become a regional testing ground for Sino-US interactions in the Americas.

Washington is conscious that Cuba has changed since Raúl Castro officially replaced his brother Fidel as president in 2008. The new administration has attempted to “update” Cuba’s economy through a suite of 313 reforms called the Economic and Social Policy Guidelines of the Party and Revolution. Announced in 2011, the Lineamientos (as the reforms are known locally) envision less state intervention and more private enterprise, in sectors ranging from tourism to education.

The Center for Democracy in the Americas in Washington D.C. describes the reform program as “a significant realignment of the paternalistic relationship that has existed between the State and its citizenry since the revolutionary period began in 1959.” Even Freedom House, which has long doubted the sincerity of the Cuban government’s policies, finds that “the opening of a private sector, while still limited, is driving genuine change in Cuba.”

As Havana and Washington negotiate steps toward commercial rapprochement, Sino-US encounters in Cuba are becoming more likely. Chinese political scientist Wang Yiwei argues that US policy toward Cuba has generated friction across Latin America and that the embargo is akin to “lifting a rock only to drop in upon one’s own foot” (搬起石头砸自己的脚). The sentiment is gaining traction in Florida’s Miami-Dade County, where a recent poll finds that 68 per cent of Cuban Americans now favour the restoration of diplomatic relations.

More conciliatory public opinion underpinned US President Barack Obama’s 2014 pledge to advance political détente with Cuba, which has unleashed a flurry of trade and fact-finding missions to Havana by US businesspeople and politicians, including Assistant Secretary of State for Western Hemisphere Affairs Roberta Jacobson and Congresswoman Nancy Pelosi.

Opportunities exist for US businesses to supply Cuba’s agriculture cooperatives, emerging small businesses and under-equipped state enterprises, but Chinese competitors have the advantage of trade credits, low-interest loans and supply contracts deriving from Sino-Cuban presidential accords. Under these conditions, Chinese suppliers are less affected than their US counterparts by Cuba’s tight import regulations, dual currency regime and lack of conventional foreign exchange financing.

Independent people-to-people ties between Cuba, China and the US are also thickening. This presents a diplomatic challenge for the Cuban state which, since 1959, has left no aspect of foreign interaction to chance, closely supervising external partnerships. Top-down control of foreign contact has minimised Cuba’s exposure to external influences, limited the ability of foreign nongovernmental organisations to foment an independent civil society on the island and defended against the US government’s Cuban Democracy Act, which has attempted to reach around the Cuban state to support organisations that could destabilise it. Cuban apprehension about foreign intervention, including at the level of people-to-people ties, focuses for good reason on the US. Meanwhile, Chinese visitors ranging from official delegates to unofficial businesspeople are exempt from visa requirements and, for the time being, are free to collaborate with Cuban partners.

Diverging visions of state intervention will continue to generate difficulties among Cuba, China and the US. Although Cuba’s foreign relations are becoming more pragmatic, Cuba’s continuing reliance on the “supreme guidance of the state” stands at odds with US conventions of transnational business and civic governance. Diverging views of government intervention are intertwined with the impasse over human rights in Cuba. Jacobson recently said that she broached this sensitive topic in Havana with Josefina Vidal, the Cuban Foreign Ministry’s director for US relations, but Vidal emerged from the meeting denying that the issue was even raised.

A key question for the future is whether China’s deepening trade and investment relations with Cuba will favour or impede more participatory modes of governance and steps toward financial liberalisation. The answer to this question will set the tone for interactions, not only between Cuba and China, but for the emerging triangular interactions between both countries and the US.

Adrian H. Hearn is Associate Professor of Spanish and Latin American Studies at the University of Melbourne, and author of “Diaspora and Trust: Cuba, Mexico, and the Rise of China”, Duke University Press. This article can be republished with attribution under a Creative Commons Licence.