Why is China increasing its investment in Cuba?

The streets of Havana are increasingly populated by Chinese-made Yutong buses and Geely trucks. To the east of the capital a Chinese company signed a deal last year to build a $500 million golf course.

Those are just some evidence of China’s increasing presence on the island. Currently Beijing is Cuba’s largest trading partner and Havana’s largest debt holder lending them money on “soft credit terms.” Havana exports $311 million worth of goods to China while importing $1.05 billion worth of Chinese products. Cuba’s second export and import destinations are the Netherlands ($157 million) and Spain ($920 million).

Despite the large volume of trade done between the two countries Cuban consumers seem to be skeptical to Chinese electronic products. Many Cubans do not trust Chinese electronics and prefer ones made in the U.S., Japan, and South Korea.

As much as the Cubans might resist buying Chinese computers and cellphones, their electronics will most likely be getting internet from the Chinese telecom giant Huawei. In 2016 Huawei began to provide Havana’s restaurants and parks with broadband internet and now it is starting to connect Cuban homes.

Contracts to build large infrastructure projects such as the aforementioned golf course and a $600 million a nickel-processing plant have remained in limbo. This is similar to a pattern in other Latin American states where Chinese companies sign deals to build large infrastructure projects, but never follow through.

An example would be Nicaragua’s transcontinental canal. In 2013, the Nicaraguan government announced a joint project with Chinese investor Wang Jing to build a 170 mile long canal that would connect Atlantic and Pacific Oceans, but so far no progress has been made.

Even if the Cuban projects end up like the Nicaraguan canal China will probably continue to increase its influence in Cuba.

After all Cuba is already using Chinese cash to fill in the gap left in its budget by decreasing Venezuelan aid. For years Havana has relied on Venezuela to stay financially afloat, but this is changing as Caracas is plunging deeper and deeper into an economic crisis.

If Beijing takes on the role of Venezuela as the provider of Cuba’s financial stability then the island might become a Chinese satellite. Since China is Havana’s largest trading partner Beijing could probably exert influence on Havana. Raul Castro would likely not want to lose the largest foreign market for Cuban goods so he might acquiesce if the Chinese start making demands.

Also by providing internet Huawei is likely to help the Cuban government restrict the freedom of its citizens. The Foundation for Human Rights in Cuba wrote that Raul Castro might be using Huawei in order to impose strict internet controls over the island.

Huawei’s other international clients include Kazakhstan and Zimbabwe, all countries that enforce heavy government controls over their internet. China itself is known to censor and block websites it considers dangerous and subversive.

Many Cubans do not have access to the Internet in their homes. The government has created public Wi-Fi hot-spots where people can get connected, but opposition sites are still blocked and reception is poor.

Cubans want better internet and Huawei might be able to provide it while at the same time keeping it heavily censored. Such a solution would likely please the Castro regime. They could pacify their population by giving them better Internet access while keeping the web censored.

Beijing’s increased investment in Cuba’s infrastructure might signal attempts at China trying to establish a foothold in the Caribbean. During the Cold War Soviet assistance to Cuba also included vital materials such as oil and machinery. In return Havana agreed to become Moscow’s satellite.            Similar to the Soviet Union China is providing Cuba with important capital such as farm machinery and Internet. If Cuba’s dependence on China continues to grow, Havana might acquiesce to taking on the role of Beijing’s satellite.

Such a scenario would endanger U.S. national security. By having Cuba as its client state Beijing could force Castro to allow them to set up military bases or listening station on the island just 90 miles from Florida.

In the past Soviet investment in Cuba led Havana to become Moscow’s pawn in the Cold War. China might be attempting to do the same.