Prompted by the new relationship between the U.S. and Cuba, American businesses have been investigating Cuba’s potential for much needed investment, but news of actual transactions has been scarce.
The main takeaway since the détente with the U.S. is that Cuba prefers non-U.S. foreign investors.
East Asia appears to be emerging as the main driver of foreign investment in the near future based on history and a lingering suspension in Castro’s Cuba about potential U.S. influence in the island nation.
Furthermore, ambiguity in existing U.S. rules for people and business engaging with Cuba – combined with the stickiness of the U.S. legislative unwinding of the decades-old embargo against Cuba – provides the thrust needed to make East Asia the dominate player in what is likely to be a huge wave of foreign investment in Cuba.
China is currently Cuba’s second-largest trading partner behind Venezuela.
In July 2014, following President Obama’s announcement to re-establish diplomatic relations with Cuba, Chinese President Xi Jinping made an official visit to Cuba along with a delegation of 50 Chinses businessmen and investors.
The result was 29 business agreements that further expanded the extensive economic and commercial ties between Cuba and China. Among them were agreements for Chinese funding for a variety of construction products, investment in oil exploration, financing for the Cuban acquisition of telecom equipment, and cooperation on projects in the areas of healthcare, biotechnology, renewable energy and tourism.
In January 2016, the U.S. and Cuba held talks over expanding Internet access in Cuba. U.S. State Department officials said that while the U.S. is making efforts to push progress and close telecoms agreements before the end of Obama’s presidency, Cuban officials were proceeding with caution.
“We need to have some solid wins to give [U.S. business] confidence,” said David Sepúlveda, the coordinator for international communications and Information policy in the State Department, in an interview with the Miami Herald.
Several weeks later, Cuba announced new broadband Internet services will be made available through fiber optic connections operated with Chinese telecom operator Huawei.
Chinese Premier Li Keqiang’s to visit Cuba this month
Chinese Premier Li Keqiang’s upcoming visit to Cuba is expected to boost economic cooperation between the two sides, Cuban Foreign Affairs Minister Bruno Rodriguez said.
Li’s tour will be the first official visit to Cuba by a Chinese premier since the two countries established diplomatic ties 56 years ago.
Cuban Minister of Foreign Trade and Investment Rodrigo Malmierca recently told reporters that the visit will boost joint efforts to expand cooperation into new areas.
“During the premier’s visit, a number of important economic cooperation agreements will be signed,” said Malmierca.
The two sides are expected to sign cooperation deals in areas such as technology, renewable energy, industry and environmental protection.
“Chinese investments in our nation are starting to blossom and we have a joint strategic vision for the future,” he added.
Japanese Prime Minister Shinzo Abe to make first visit to Cuba this month
Prime Abe will visit Cuba next week as the first Japanese leader to do so.
During Abe’s visit, Japan plans to offer around $9.76 million in grant aid to Cuba for purchasing medical equipment.
Abe and Cuban President Raul Castro are expected to confirm during talks their intention to set up a center for training medical professionals in Cuba. The move is aimed at familiarizing Cuban doctors with Japanese medical practice and paving the way for the sale of Japanese equipment.
“By working for improvements in the business investment environment, the government hopes to help Japanese firms expand into Cuba, which has attracted global attention from both the public and private sectors following its resumption of diplomatic ties with the United States,” Chief Cabinet Secretary Yoshihide Suga said at a press conference.