Tuesday, November 18, 2008

Visitor from China, Cuba's # 2 Trading Partner

China's Hu strikes deals in Cuba

Members of Cuba's Chinese community gather at the airport to await Mr Hu's arrival
Member of Cuba's Chinese community were on hand to greet Mr Hu

President Hu Jintao of China is set to meet Cuban leader Raul Castro later in the day as part of his multi-stop tour of the US and Latin America.

The two nations are agreeing multiple deals on trade and loans as China bid to strengthen its links with Latin American and Caribbean nations.

Mr Hu was met at the airport by senior Cuban officials and cheering members of the local Chinese community.

Cuban TV broke into Monday's nightly news to go live to Mr Hu's arrival.

China is now Cuba's biggest trading partner after Venezuela, with bilateral trade at $2.3bn (£1.5bn) in 2007.

And across Latin America, China has seen its trade climb from $13bn in 2000 to more than $100bn in 2007.

"My visit is aimed at increasing friendship and co-operation between our two nations, and working together with our Cuban comrades to build a promising future," Mr Hu said in a statement.

Loans due

Throughout the Cold War Cuba was traditionally a much firmer ally of the Soviet Union than China, but that changed when the Soviet Union collapsed in 1991, leaving Cuba almost bankrupt, says the BBC's Michael Voss in Havana.

China offered Cuba soft loans to help it through the difficult 1990s, and these loans are now beginning to come due.

Restructuring their repayment is likely to be one topic on the agenda when the two leaders meet on Tuesday, our correspondent says.

Other agreements already signed or set to be signed reportedly include Chinese purchases of nickel and sugar from Cuba, Chinese-backed energy prospecting in Cuba, and other deals in education and health.

Mr Hu arrived in Cuba from Costa Rica, where he signed co-operation and investment agreements and discussed setting up a free-trade agreement between the two countries.

He will travel on from Cuba to Peru where he will attend the Apec (Asia-Pacific Economic Co-operation) summit in Lima on 21 and 22 November.

But China is not the only power interested in securing greater access to the raw materials and other resources that Latin America offers. President Hu will be followed next week by Russian President Dmitry Medvedev, whose tour of the region includes a visit to Cuba.

Cuban critique

Although both Cuba and China are run by Communist parties, they have pursued very different economic models.

China has adopted market economics while Cuba still has a command system with most of the economy under state control.

On Monday, Cuban state newspaper Granma praised the Chinese model but highlighted "an unequal distribution of wealth in the country, marked difference between city and countryside and the erosion of the environment".

When Mr Hu last visited Cuba in 2004 Fidel Castro was still in charge of the country.

His younger brother, Raul Castro, officially took over the presidency in February 2008 and has introduced some reforms.

Raul Castro saw China as a potential model for Cuba to follow, says BBC regional analyst Emilio San Pedro.

China, a modern-day economic powerhouse in a world of financial uncertainty, sees Cuba with its need for investment and political support as an important ally in its long-range plans to strengthen and expand its ties with the rest of Latin America, he adds.

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