The Cuba Test: China Eyes New Model for Latin America Relations

 
 

Premier Minister Li Keqiang’s visit to Cuba this past September — the first by an acting Chinese prime minister in 56 years of bilateral relations — held all the comradery and pageantry that one would expect from a meeting between two of the world’s remaining socialist countries. Headlines boasted of the amount of time China and Cuba’s leaders spent together: “President Raul Castro Spoke with Li Five Times in Less than One Day”; “Prime Minister Li Talked with Fidel Castro for Nearly Two Hours.” These figures are held up as numerical signs that the friendship between Cold War comrades China and Cuba is as strong today as it was when relations were first established in 1960.

Nonetheless, it would be remiss to call the visit a mere show. Certainly, the spectacle was a large part of the visit. Behind all the red splendor and ideological vow-renewal of this year’s reunion, though, lies an intriguing proposal that flew under most radars: “knowledge cooperation.” To technologically-starved Cuba, China’s pronounced emphasis on knowledge cooperation may be the most meaningful part of the visit, which may also hint at more fundamental changes in China’s approach to Latin America and the Caribbean.

Squeezing Oil Out of a Rock: Cuba’s Technological Desert 

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The years have not been kind to Cuba. Caught on the business(less) end of an embargo that has outlasted the Cold War, the country faced several decades of economic difficulties. The unraveling of the Soviet bloc ushered in the euphemistic periodo especial — a period of severe hardship during which the island lacked everything from fuel to food. The U.S. Helms-Burton Act of 1995 further aggravated the island’s economic difficulties by tying the legal knot on the embargo’s economic noose around the island.

One of the key ways the embargo affects the Cuban economy is by strictly limiting the sorts of productive technology, such as industrial equipment, the island can import. Nearly six decades after the blockade first began to take shape, the U.S. embargo on Cuba has chocked the island technologically, affecting virtually all sectors of the island’s economy, from health services to manufacturing. Under the current state of affairs, Cuba’s Drilling and Oil Extraction Company exploits a meager five percent of its oil potential. Life-saving medical research is likewise not spared the embargo. According to a 2011 U.N. report, the Cuban Institute of Oncology’s purchase of a flow cytometer fell through when U.S. company Becton Dickinson learned that the equipment was destined for Cuba.

The island’s lack of industrial technology, when paired with the stifled private sector, has forced Cuba into years of stunted economic growth based on squeezing out every bit of economic potential from what resources and technologies are readily available, leading to many lost possibilities. Cuba’s current technological state relegates it to the role of commodities exporter, depriving it of the additional revenue it would make if it were capable of adding value to the raw goods it presently exports. Nickel, one of Cuba’s main exports, for instance, is exported as-is, with little to no value added. Sugar shares a similarly unadorned fate. Cuba needs advanced, mainly industrial, technology and not just cash to revitalize its stagnant economy.

Following the reestablishment of relations, the United States has stood out as a potential source of technology for Cuba. However, the embargo, complete with its strong restrictions on what kind of technology can be exported to Cuba, remains a formidable barrier that limits the transfer of any industrial technology and equipment to Cuba. Cuba’s removal from the list of state sponsors of terror has eased some of the embargo’s restrictions. Notwithstanding these relaxed restrictions and some limited exceptions, though, exports to Cuba remain subject to Export Administration Regulations (EAR) and require a license. The United States’ historical abstention from condemning the embargo at the UN was simultaneously symbolic of the Obama administration’s desire to end the embargo and of the administration’s inability to effect substantial change without Congress onboard.

China has shown itself a more dynamic participant in the mission to modernize Cuba. Largely unhindered by the embargo, Chinese communications firms stand out amongst those most eager to build-up Cuba’s underdeveloped infrastructure. Huawei — whose Chinese hardware has raised U.S. security national concerns in the past — has established its presence on the island through Wi-Fi projects meant to increase internet penetration among ordinary residents. To date, though, few modernization projects between Cuba and China have strayed from communications infrastructure into productive industrial technologies.

A New Path for China-Cuba Ties: Knowledge Cooperation

It is within this still-bleak technological context that Li came to Cuba with his offer of knowledge cooperation. Li’s September visit follows visits by President Xi Jinping and Vice Premier Wang Yang, in 2014 and 2015 respectively. One of the crucial tasks of this latest visit lay in coming up with a roadmap for future Sino-Cuban cooperation. In one of his many talks with Raul Castro, Li proposed “sharing developmental experiences and launching knowledge cooperation” as the new basis of Sino-Cuban relations.

According to Li, “knowledge cooperation” refers to “utilizing ideas as starting points in order to deepen bilateral, win-win cooperation.” Li further elaborated that this new approach to China-Cuba relations would be based on four points: industry, commerce, culture, and intelligence. Li placed particular emphasis on the fourth point, which can be further broken down into sharing developmental experiences and developing intellectual cooperation. China’s State Council carried the point home, asserting that Li has vowed “to help Cuba industrialize.”

It is too early to say what we can expect to see from the newborn Sino-Cuban initiative. The concept itself remains highly obscure; “knowledge cooperation” could just as easily refer to technology transfers and development as it could to joint research or even simply to the sharing of abstract “developmental experiences.” While Cuba certainly welcomes any sort of cooperation with China, the country is more anxious to get its hands on productive technology, rather than just a list of developmental dos and don’ts.

For now, the island’s reaction has been restrained. One sign of this is Cuban media’s positive, yet sober, tone. Spanish-language media (including the Cuban Communist Party’s own newspaper, Granma, and the pan–Latin American Telesur) has not mirrored Chinese media’s fixation on “knowledge cooperation.” Neither has Cuban media explicitly echoed “knowledge cooperation” as the new basis of Sino-Cuban ties. Instead, Cuban news outlets have focused their coverage on specific areas of cooperation, which include industrial development, as well as medical research and environmental protection. Interestingly, while Chinese media has emphasized the signing of 20 agreements, Cuban media has reduced the list to 12. Four of these agreements are credit agreements to fund assorted projects, such as a wind farm, and a bioelectric plant connected to the Hector Rodriguez sugar mill — Cuba’s greatest sugar producer.

Knowledge Cooperation: A New Model for Sino-Latin American Relations?

Li’s emphasis on a different kind of cooperation is timely, if not entirely new. China, which has long identified itself as a developing country and a member of the global south, has often called for greater intellectual cooperation, as well as technology transfers, that will level the global playing field. Nonetheless, China has typically been the receiver of new technologies, rather than the provider. This role reversal, wherein China is expected to give or facilitate rather than receive advanced technologies, comes as a consequence of China’s increasing technological sophistication — especially vis-a-vis other developing countries.

These new expectations laid upon China, while perhaps inconvenient, are not wholly problematic. There are several reasons why China should already be looking for a new model on which to base its cooperative relations with Latin American, regardless of regional expectations.

First, there is increasing suspicion throughout Latin America that the region is essentially digging its own grave by focusing on exporting commodities to China. China’s traditional economic model for engaging with Latin America has consisted mainly of importing commodities while exporting cheap manufactured goods. Chinese economic engagement in the region has thus resulted in more affordable goods for all, but often at the cost of lost manufacturing jobs in Latin America. Experts today are pointing out that, if things were to continue down this path, Latin American industry would be hollowed out by the Chinese competitors their commodities feed.

Second, the other main component of Chinese economic engagement with the region — Chinese investment in commodities and commodities-related infrastructure — has similarly come under attack by local communities that are unwilling to bear the primarily environmental costs of monoculture and mineral exploitation. Local strikes over mining projects in Peru and even the Nicaragua Canal are just some specific examples of recent backlashes against what was once seen as overwhelmingly beneficial exchange with China.

As recent initiatives show, Chinese policymakers are already keenly aware of the shortcomings of China’s current commodities-centered model toward Latin America, and are searching for an alternative. Li’s statements in Cuba, as well as the “China-LAC Science and Technology Partnership” and the “China-LAC Young Scientists Exchange Program,” unveiled at the China-CELAC forum last year, are initiatives meant to drive Sino-LAC relations up the value chain. The time is right for China to seek a new model toward Latin America — one that makes good on China’s repeated assurances that it understands the needs of developing countries like itself. China’s knowledge-cooperation with Cuba may be the test to see how serious China is about taking things with Latin America to the next level.

Ricardo Barrios is a second-year Master’s student in International Politics at Peking University. He is also a Global Intern at the Carnegie-Tsinghua Center for Global Policy.

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