Identifier
Created
Classification
Origin
08HAVANA878
2008-11-21 19:40:00
CONFIDENTIAL
US Interests Section Havana
Cable title:  

ALL CHINA, ALL THE TIME - AT LEAST THIS WEEK

Tags:  ETRD ECON PGOV PINR PREL CU 
pdf how-to read a cable
VZCZCXRO6956
RR RUEHAO RUEHGA RUEHGD RUEHHA RUEHHO RUEHMC RUEHMT RUEHNG RUEHNL
RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC
DE RUEHUB #0878/01 3261940
ZNY CCCCC ZZH
R 211940Z NOV 08
FM USINT HAVANA
TO RUEHC/SECSTATE WASHDC 3886
INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RUEHBJ/AMEMBASSY BEIJING 0089
RUEHBR/AMEMBASSY BRASILIA 0022
RUEHCV/AMEMBASSY CARACAS 0084
RUEHMO/AMEMBASSY MOSCOW 0019
RUEHUL/AMEMBASSY SEOUL 0036
RUEHKO/AMEMBASSY TOKYO 0028
RUCOWCV/CCGDSEVEN MIAMI FL
RUEAIIA/CIA WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUCOGCA/COMNAVBASE GUANTANAMO BAY CU
RHMFISS/HQ USSOUTHCOM MIAMI FL
RHMFISS/JOINT STAFF WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
C O N F I D E N T I A L SECTION 01 OF 03 HAVANA 000878 

SIPDIS

DEPT FOR WHA/CCA

E.O. 12958: DECL: 11/20/2018
TAGS: ETRD ECON PGOV PINR PREL CU
SUBJECT: ALL CHINA, ALL THE TIME - AT LEAST THIS WEEK

REF: HAVANA 863

Classified By: COM Jonathan Farrar for reasons 1.4 (b) and (d)

-------
SUMMARY
-------

C O N F I D E N T I A L SECTION 01 OF 03 HAVANA 000878

SIPDIS

DEPT FOR WHA/CCA

E.O. 12958: DECL: 11/20/2018
TAGS: ETRD ECON PGOV PINR PREL CU
SUBJECT: ALL CHINA, ALL THE TIME - AT LEAST THIS WEEK

REF: HAVANA 863

Classified By: COM Jonathan Farrar for reasons 1.4 (b) and (d)

--------------
SUMMARY
--------------


1. (C) For four straight days, Chinese President Hu Jintao's
36 hour visit has dominated the Cuban press. China and Cuba
signed 12 agreements, including renewed contracts for Cuban
exports and much needed restructuring of Cuba's debt. Hu
arrived in Cuba in between visits by Brazilian President Lula
and Russian President Medvedev. While visits by foreign
leaders are not uncommon, the frequency, timing, and
publicity provided these visits give the impression of a full
court diplomatic press aimed primarily at diversifying Cuba's
economic ties and securing much needed assistance. The
Government of Cuba (GOC) has also confirmed that Raul Castro
will reciprocate with visits to all three countries (Brazil
in December, Russia and China in 2009). Perhaps a bit
jealous, Venezuelan President Hugo Chavez announced November
18 that Raul Castro would make his first foreign trip as
president to Venezuela in the next few days, a statement that
seems to have taken Raul by surprise. End Summary.

--------------
SIGNING AGREEMENTS AND INCREASING TRADE
--------------


2. (U) Chinese President Hu Jintao brought a large
delegation to Havana November 17 following the G-20 summit in
Washington, D.C. and a visit to Costa Rica. This was his
second visit to Cuba as president (2004) and third visit
overall (1997 as a member of the Chinese Communist Party.)
After departing Cuba on November 19, Hu was scheduled to
attend the Asia-Pacific Economic Cooperation Summit in Peru
and then stop in Greece on his way back to China.


3. (SBU) Hu was greeted and accompanied by President Raul
Castro for much of his visit. Hu reportedly brought 4.5 tons
of humanitarian assistance in response to the three
hurricanes that hit Cuba in the past three months. On
November 17, Castro and Hu attended a ceremony where,
according to the official (state) press, the following
agreements were signed: an economic and technical

cooperation agreement calling for an USD 8 million donation
by the Chinese government; a five year deferment on payment
of a USD 7 million credit granted in March 1998; the
deferment of payment until 2018 for the trade imbalance (not
quantified) accrued between 1994-1995; the release of a USD
70 million credit to rebuild and repair hospitals from a USD
350 million credit facility established on Hu's last visit in
2004; and an agreement of mutual recognition of higher
education diplomas. These are in addition to the following
agreements signed this same week at the 21st session of the
China-Cuba Inter-governmental Commission for Economic
Commercial relations: renewed contracts for the purchase of
Cuban nickel and sugar; the Chinese supply of galvanized
roofing material for Guantanamo province; continuing
rehabilitation of Cuban ports; further cooperation in
biotechnology; renovating Cuba's seismology network; and the
building of a third Cuban eye hospital in China.


4. (SBU) While not quantified, the agreements to continue
exporting Cuban nickel and sugar are likely to further
increase bilateral trade in goods, which grew by 35 percent
in 2007 to USD 2.457 billion. All of the growth in 2007,
however, was due to China's increased purchase of nickel
(more than 10,000 tons at record high prices). Chinese
exports to Cuba (transportation vehicles, electric home
appliances, computers, telecom equipment, and energy
equipment) remained flat at USD 1.5 billion. Cuba was
already committed to send 400,000 tons of sugar to China each

HAVANA 00000878 002 OF 003


year, and can hardly spare more. Total production in 2008 is
up from 2007 and likely between 1.4 and 1.5 million tons.
However, sugar production in 2009 may fall back to pre-2008
levels due to extensive hurricane damage. Cuba had to import
sugar in 2006 to meet domestic demand estimated at 700,000
tons per year. Nevertheless, we expect China will maintain
its spot in 2008 as Cuba's number two overall trade partner
after Venezuela. Venezuelan trade in 2007 was USD 2.7
billion in goods and several billion dollars more in services.


5. (SBU) In addition to overseeing these agreements, Castro
and Hu visited some of the 2,000 Chinese students in Cuba
studying Spanish, medicine, nursing, tourism, psychology, and
the humanities. According to the official press, the leaders
discussed in a bilateral meeting their economic, social, and
political experiences, specifically in regard to
strengthening socialism, and the continued development of
ties between the nations. They also emphasized the
importance of defending Cuban sovereignty and the "beginning"
of a unified China.

--------------
THE CHINA MODEL AND MEETING FIDEL
--------------


6. (SBU) The morning of Hu's arrival, the Cuban communist
party newspaper Granma ran an article titled "China Continues
Demonstrating the Validity of Socialism." While highlighting
how socialist China is a shining example for all of the Third
World, the article referenced Fidel Castro's remarks from
Hu's last visit to Cuba in November 2004 that seemed to
indicate that the China model is not for Cuba. Fidel said
that while "socialism remains the only real hope for peace
and better living for our species...each people must adapt
their strategy and revolutionary objectives to the concrete
conditions of their own country, and two identical socialist
revolutionary processes do not exist." The article goes on
to say that although China has developed and modernized
rapidly, several ills have appeared due to the speed of their
transition. These ills include an unequal distribution of
income, marked differences between the city and country, and
erosion of the environment. The article said that China
recognizes and is addressing these problems, and that
socialism will persevere with China's "peculiarities" such as
foreign investment, development of state and private
property, and what is know as the one country, two systems
policy.


7. (SBU) On November 18, 2008, Fidel Castro met with Chinese
President Hu Jintao and some of the members of his delegation
for 98 minutes. Video and photos in official press showed
one still image of Hu and Castro standing together. The two
leaders discussed the "complex international situation" and
Cuba-China relations. The following day, an article
attributed to Fidel Castro touted China's remarkable economic
growth, even during an international economic crisis. Fidel
also wrote that he "summed up for him (Hu) some of our
country's assessments on the habits of our neighbors to the
north (the United States),which tries to impose its ideas,
its mindset, and its interests with its full fleet of nuclear
weapons and fighter planes." Castro also offered his views
on Venezuela's solidarity with Cuba, President Chavez's
admiration for China, and Chavez's defense of socialism as
the only system capable of bringing justice to the people of
Latin America.

--------------
COMMENT
--------------


8. (C) While neither the visit itself nor the number of
agreements signed were particularly remarkable (China signed
16 agreements with Cuba on Hu's last visit in 2004),the
publicity afforded the event - including a rare photo with

HAVANA 00000878 003 OF 003


Fidel Castro - was extensive. We expect a similar media
blitz when Russian President Medvedev comes calling next
week. It's possible that the regime is turning to the BRICS
(Brazil, Russia, India, China, and South Africa) as an
alternative to Venezuela. Not to be outdone, Chavez was
quoted this week as promising Raul Castro would make his
first foreign trip as president to Venezuela in the next few
days, and certainly before Castro's already announced trip to
Brazil for the Latin American and Caribbean Summit December
16-17. One day later, Raul Castro appeared surprised when
asked about the trip and responded with "Chavez said it.
When did he say it? When am I going to Venezuela? I don't
know anything, but if my nephew (Chavez) said it then I'm
going." (Note: Chavez often refers to Raul's brother Fidel
Castro as his father. End Note.)
FARRAR