The decline of China’s exports affects small business and people in Cuba

By Yingzi Dong, Havana, Cuba, 2018

Near the end of Calle Cuchillo in Havana’s Chinatown neighborhood, Tientan restaurant has stayed open for over 20 years. In all those years, however, the shortage of soy sauce has never gone away.

“If we see any soy sauces in the market, we buy them all,” Mr. Luo, Tientan’s chef, said. “The shipping containers only come to the harbor eight months a year. If we are out of soy sauce, we are out of soy sauce.”

China’s exports to Cuba declined from $1.9 billion in 2015 to $1.8 billion in 2016 as a result of Cuba’s payment problem. After Hurricane Irma, The Cuban government has been unable to meet its due payments to China, because it rerouted some of the money to reconstruction efforts. As Cuba’s largest trading partner, China sends food, transportation equipment and more to the island every year.  But the decline in trade is affecting small businesses and regular people, Juan Triana, a prominent Cuban economist, said.

“The lack of supplies usually depends on the prices and regular people are facing the rising of prices,” Triana said.

Every year, Cuba receives more than 80% of its imports from China, Spain, Brazil and Vietnam. Most goods and transportation are marked as made in China. Many of these goods, however, come in suitcases.

“I would ask my family to bring me toilet papers every time they come to Cuba because it is very hard to get it,” Wei Zhang, the dean of the Confucius Department in Havana University, said. “In Cuba, demand normally exceeds supply, and the more you buy, the more money you pay. You might get a better price for buying a pack of beer in China or the United States, but you have to pay more money for a pack here.”

China should have helped Cuba as the “socialist brother,” but it ended up cutting Cuba off because Cuba cannot buy as much as before, Gregory Biniowsky, a business owner and the only foreign lawyer authorized to work in Cuba, said.

“If you talk to a businessman, Cubans always pay their debts but they always pay late,” Biniowsky said. “But a lot of exporters and investors have been frustrated because Cuba delays payments.”

Biniowsky also sees a silver lining: “The decrease of exports is definitely enforcing Cuba to develop internal manufacturing and food production.”

For last 15 years, mainly the last six or seven years, the Cuban government has been encouraging local production. But this push not only depends on the political will of Cuban government, Triana said, it also depends on the availability of hard currency.

“For example, from China we import a lot of food, transportation, equipment and the heavy machinery, and we cannot produce that because Cuba does not have the technology to produce that,” Triana said. “[The decline in imports] has a relationship with the growth of the domestic products, but not always.”

“Cuba’s industry is in poor condition,” Cristina Escobar, a Cuban TV journalist, said. “It is naive to think about developing internal manufacturing because we are a poor country.”

Even though China’s imports have decreased, Triana thinks that this will not affect the commercial relations of these countries in the long run.

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