CUBA: Chinese President’s Visit Further Strengthens Bilateral Ties

By Patricia Grogg Reprint | | Print |

Patricia Grogg

HAVANA, Nov 24 2004 (IPS) - Cuba and China have signed a package of investment and cooperation agreements that promise to be of strategic importance for the two countries, separated by thousands of kilometres but close in ideology, despite having adopted different models of development.

The signing of the 16 agreements was the main event of Chinese President Hu Jintao’s two-day visit to Havana, which ended Tuesday.

Cuba was the last stop on Hu’s first tour of Latin America, a region that offers both a sizeable market for China’s exports and a source of the raw materials crucial for the Asian giant’s continued growth.

Agreements on nickel, currently Cuba’s most lucrative export line, attracted the greatest interest among analysts. This Caribbean island nation has the largest proven reserves of the mineral on the planet, while China consumes enormous amounts of it as the world’s number one producer of stainless steel.

With proven reserves of roughly 800 million tons, which could actually amount to as much as 2.2 billion tons, Cuba’s annual nickel production is currently only around 76,000 tons, due to infrastructure limitations.

The island’s three nickel deposits are in the eastern province of Holguín, some 770 kilometres from Havana. Two of them are operated by the Cuban state-run company Cubaníquel, while the other is run by Sherritt International of Canada. Together, they provide this socialist nation with roughly 700 million dollars in annual revenues.

One of the agreements, signed Monday by Hu and Cuban President Fidel Castro, involves financing for the construction of a plant in the nickel mining town of Moa, with a production capacity of 22,500 tons.

Other agreements address the creation of joint ventures for the mining of new nickel quarries, with ownership divided into 49 percent for China and 51 percent for Cuba.

The Chinese group Minmetals contracted the purchase of 4,000 tons of nickel sinter annually between 2005 and 2009, for a total of 20,000 tons.

Castro, who had personally invited Hu to visit the island, announced several days before the Chinese leader’s arrival that they would be discussing major investments, which would eventually double Cuba’s nickel production.

Another highly strategic step was the decision to strengthen institutional cooperation to promote the creation of joint ventures in the biotechnology field. This sector has achieved a significant level of development in Cuba, but needs markets and capital in order to expand further.

The two countries agreed to establish a joint working group for cooperation in biotechnology, an area in which there are already numerous bilateral projects underway, as there are in the pharmaceutical and medical equipment industries.

One of the most significant projects involves the joint development, manufacture and marketing of biotech products for the treatment of cancer and other autoimmune diseases.

Cuban scientists contacted by IPS reported that the Cuban-Chinese company Biotech Pharmaceutical Ltd. is currently building a cutting-edge production plant in the Beijing Development Area (BDA), one of China’s most important high-tech development zones.

The plant will produce, among other products, TheraCIM h-R3, a humanised monoclonal antibody developed in Cuba and used in the treatment of cancer. The clinical testing phase was successfully completed earlier this month, and will now be followed by the necessary registration for production and marketing in China.

The plant, which will soon be completed, will have the capacity to produce enough antibodies for the treatment of 10,000 patients with advanced head and neck cancer annually.

Hu and Castro also signed a memorandum of understanding for the promotion of trade, investment and guaranteed financing to boost "mutually beneficial" cooperation in the oil, telecommunications and tourism sectors, as well as nickel.

Through another agreement, the Chinese government postponed for a further ten years Cuba’s repayment obligations for credits extended to the island between 1990 and 1994.

At the same time, China has granted Cuba a donation of approximately 6.1 million dollars for the education sector, along with credits totalling the same amount for the purchase of disposable medical materials for hospitals and clinics.

Cuba has also agreed to buy a second allotment of one million Chinese-made television sets, to be used primarily in schools.

Other accords signed between the two countries deal with the teaching of the Mandarin language in Cuba, and Chinese technical assistance for the development of the aquaculture sector and modernisation of the island’s meteorological systems.

Speaking to the Chinese and Cuban business representatives who spent two days studying opportunities for new investments, Hu said that there was a solid foundation for even closer economic and trade ties between the two nations in the future.

Castro presented the Chinese leader with the José Martí Order, the highest distinction awarded by the Cuban Council of State to prominent foreign figures. The two presidents also held private talks.

During Hu’s visit, Castro was confined to a wheelchair as a result of the fall he suffered on October 20. On his visits around the city of Havana, the Chinese leader was instead accompanied by the president’s brother, Raúl Castro, the first vice president of Cuba and head of the Cuban armed forces.

Cuba and China have shared diplomatic ties since September 28, 1960, although bilateral relations have undergone periods of tension over the years, primarily because of the two governments’ differing stances towards the former socialist bloc in eastern Europe and the now defunct Soviet Union.

Jiang Zemin, Hu’s predecessor, visited Cuba in 1993 and 2001, while Castro travelled to China in 1995 and 2003. Analysts believe that these visits helped set the course of current relations, based on a shared political vision and mutually advantageous exchange.

According to these sources, the Chinese economic model constitutes an important reference for Cuba, since it is essentially socialist in nature but adapted to the country’s particular characteristics.

Cuban officials maintain that the country must build its own model, rooted in the predominant role of socialist state enterprise and a high degree of centralisation.

Bilateral trade between China and Cuba totalled 600 million dollars between January and August of this year, consolidating the Asian nation’s position as the island’s third largest trading partner, after Venezuela and Spain.