Tuesday, July 22, 2014

Cuba hopes for more investment as Chinese president arrives

Cuba hopes for more investment as Chinese president arrives
HAVANA Mon Jul 21, 2014 1:42pm EDT

(Reuters) - Chinese President Xi Jinping begins a two day visit to Cuba
on Monday evening, stirring hopes on the island that China will finally
invest in the country after a number of important deals never materialized.

Xi was to meet with President Raul Castro on Tuesday and then fly to
Santiago de Cuba to see plans to improve port facilities and recovery
efforts from Hurricane Sandy, which devastated Cuba's second city almost
two years ago.

Xi was in Brazil last week for a summit of the BRICS nations, which also
includes Russia, India and South Africa. He then traveled to Argentina
and Venezuela, signing a raft of multi-billion dollar credit and
investment agreements, before stopping in Cuba on his way home.

Communist-run China and Cuba are close political allies. Generous trade
credits have made China the island's largest creditor and second biggest
trade partner after Venezuela at $1.4 billion last year.

China has rescheduled Cuba's government and commercial debt, believed to
top $6 billion. But large investment agreements for the nickel industry,
signed in 2000, another in hotels, and a deal to expand an oil refinery
agreed five years ago, have not materialized.

Chinese-made cars, buses, locomotives, ships and household appliances
are increasingly prevalent in Cuba. China's flag flies from leased oil
rigs along the northwest coast and a modern container port boasts
Chinese equipment, but direct investments are limited to a
communications venture established 15 years ago and an onshore oil block
in Pinar del Rio province.

Chinese diplomats and businessmen have told Reuters over the years that
they had little confidence in Cuba's ability to work efficiently with
them, complained about the high cost of doing business, and said Cuba
has balked at bringing construction crews in from China to build projects.

Little of the $80 billion China has invested in Latin America and the
Caribbean in recent years has been in Cuba. That, along with a review of
debt and trade, will top this week's agenda.

Raul Castro began instituting market-oriented reforms after taking over
from ailing brother Fidel Castro in 2006, much as China did in the 1980s.

This year, Cuba established its first Chinese-style special development
zone and passed a more attractive foreign investment law with a
particular eye to friendly nations such as Russia, China and Brazil. It
includes a clause aimed at China that for the first time would allow
investors to bring in their nationals for construction.

Talks are reportedly underway for a number of investment projects,
including in pharmaceuticals and automotive assembly, but no final
investment agreements are expected this week.

"The Chinese are not satisfied with the pace and depth of reforms in
Cuba," said Christopher Sabatini, senior director of policy at the
Americas Society and Council of the Americas.

"This is ultimately a pragmatic government and it's not about to invest
in Cuba for ideological reasons or even for geopolitical, long-term
reasons if there isn't a profit or resource to be gained immediately."

(Reporting by Marc Frank; Editing by Kieran Murray and Andre Grenon)

Source: Cuba hopes for more investment as Chinese president arrives |
Reuters -

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