TRADE: Cuba to Buy More than One Million TVs from China

By Dalia Acosta Reprint | | Print |

Dalia Acosta

HAVANA, Oct 24 2001 (IPS) - An agreement through which Cuba will import over one million TV sets from China has brought back memories of the days when home appliances from the now-defunct Soviet Union flooded the island.

The deal that the government of Fidel Castro signed with China could soon make the ATEC-Panda trademark the only option for Cuban families. TV sets manufactured by Sony, Philips, Sanyo, Daewoo and other transnational corporations have already vanished from the shelves of the government shops that sell only in dollars – the only stores that market home appliances.

“It took me months to save up the money to buy a TV. But now that I finally have 400 dollars, the store told me that only Chinese sets will be sold. There is no possibility to choose,” said Carmen Ramos, a 42-year-old engineer.

Ramiro Ceijas, who works in one of the dollar stores, said that when he was informed about the imminent withdrawal of the TV sets from the shelves, “I told all of my friends who wanted to buy one that they had better hurry up.

“A fall in sales is to be expected, but it’ll pick up later. People have no other option, and it’s not the kind of thing you want to buy on the black market,” he added.

Of the one million TV sets to be purchased from China, 450,000 are to be assembled in Cuba. The aim is for “a majority of families to have a quality TV in the not-so-distant future,” according to the government daily newspaper Granma.

Most of the TV sets will be sold in Cuban pesos to “outstanding” workers, and to pensioners and homemakers who do not yet have a TV, at a price of 4,000 pesos (the peso currently stands at 23 to the dollar in the government exchange bureaux).

The price is high in comparison with incomes in Cuba, which average 250 pesos a month. However, those wishing to buy an ATEC- Panda TV will have access to bank loans without interest.

Around 20 percent of the TV sets will be sold by the dollar stores, in order to draw in the foreign exchange needed to pay off the credit China granted Cuba to purchase the appliances, said authorities.

Besides meeting unsatisfied household demand, new TV sets will be installed in schools and social centres, to give the population access to the news and educational programmes offered by the government-controlled media.

The standardisation of the sets “will considerably facilitate maintenance and repairs, which is today a complex question, given the wide range of existing brands,” said Granma.

The measure has revived memories of the golden era of relations between Cuba and the former Soviet Union, when a flood of TV sets from that country replaced the old US-made General Electric appliances in most Cuban homes.

For decades, Cuba benefited by what was described here as “mutually advantageous” terms of trade with the Soviet Union.

But the 1991 break-up of that superpower, on which Cuba was almost totally dependent, triggered the worst economic crisis ever faced by Castro’s socialist government.

Local economists say that although China appears to have been called on to take over the role the Soviet Union once played for Cuba, Castro will not fall again into the trap of depending commercially on one single country.

Chinese officials, meanwhile, have made it clear that their only interest is in expanding economic ties, and that they have no intention of becoming a “big brother” to Cuba.

In 1998, during a visit to China by Cuba’s Minister for Foreign Investment and Economic Collaboration, Marta Lomas, the two countries agreed to make joint investments in Latin America and the Caribbean.

China is now one of Cuba’s top trading partners, with a turnover of 480 million dollars last year, and analysts believe that figure will grow.

Trade between the two nations is recovering, after dropping from 500 million dollars in 1990 to 260 million in 1995 as the result of a slump in Cuba’s sugar production. China used to buy more than one million tonnes a year of sugar from Cuba.

Today, business ties between Cuba and China include a joint venture in China’s pharmaceutical industry, a firm building a hotel in Havana, joint production of bicycles and TVs, and the Gran Caiman Chinese-Cuban telecommunications company.

China currently provides, at low, stable prices, around 40 percent of the raw materials employed by the Cuban pharmaceutical industry, which produces more than 80 percent of all medicine used on the island.

The two nations also have cooperation programmes in fish, duck and goat-farming, and the development of mini-hydroelectric plants, biogas and solar energy.

An ongoing exchange of high-level visits included a 10-day tour of China by Castro in 1995 and two visits to the island by Chinese President Jiang Zemin, the last of which took place in April.

The Chinese government sees Cuba as “an ideal recipient of investment, because it has a highly qualified, disciplined and efficient workforce,” Beijing’s Ambassador in Havana, Wang Zhiquan, said recently.