Will the U.S. have to compete with China for the emerging Cuban market?
The Unites States is not the only country vying for Cuba’s attention and open markets. But the island nation distrusts Washington and instead has been strengthening ties with China, one of the U.S.’ major competitors.
In 2015, trade between China and Cuba increased by 57 percent, reaching some US$1.6 billion according to Beijing officials, while in past months direct flights began to operate between Beijing and Havana.
China is also leading the construction of Internet infrastructure in Cuba, a market that the U.S. has been battling to enter. According to specialists, the deals were a deliberate decision by Havana, stemming from its lack of trust in the U.S.
“The Chinese influence is felt in all areas,” says Richard Feinberg, a former U.S. diplomat and expert on the Cuban economy at the University of California and the Brookings Institution. “From the point of view of Cuba, they are still paranoid about the United States.”
According to media reports, several U.S. companies have been seeking to close deals in Cuba, particularly in the communications sector, including AT&T and the U.S. Postal Service, but also in the tourism industry.
Cuba has been reluctant to fully open its doors to the U.S. telecommunications industry, however, instead choosing to deal with China. Speculators say U.S. companies seeking new markets in Cuba may have a harder time than initially thought.
“In part, this is the result of a historical attempt by the United States to undermine the Cuban government through telecommunications and therefore Havana doesn’t trust our hardware,” William M. LeoGrande, School of Public Issues professor for the American University in Washington.
Joint ventures and foreign direct investment from China to Cuba are currently relatively small, but this is expected to grow in the coming years.
Diplomatic relations between the Washington and Havana are set to reach a climax this weekend, when President Barack Obama arrives in Cuba. This will be the first time a U.S. president has visited the island nation since 1928.
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