China’s Xi in Cuba on last stop of Latin America swing

July 22, 2014

HAVANA, Cuba – Chinese President Xi Jinping arrived in Cuba late Monday, officials said, the last stop on a Latin American tour that has stressed trade and aid more than ideology.

“Inside Jose Martí International airport, Xi was welcomed by first Vice President Miguel Díaz-Canel and diplomats from the Chinese mission here,” Cuba’s state news agency Prensa Latina reported.

Xi arrived from Caracas for a two-day official visit to the Americas’ only one-party communist nation.

The Chinese leader is looking to bolster trade and cooperation with Cuba. Beijing already is Cuba’s No. 2 trade partner after Venezuela, and its top source of credit.

Xi — who has visited Brazil, Argentina and Venezuela on this trip — has a meeting scheduled with President Raúl Castro, 83, at the Palace of the Revolution on Tuesday. The two leaders are expected to sign bilateral agreements but there has been no advance word on their focus.

On Wednesday, Xi will visit Santiago de Cuba, the country’s second-largest city which was hard hit in October 2012 by Hurricane Sandy. The storm killed 11 people and destroyed 17,000 homes and damaged thousands more. Many believe Xi will announce Chinese cooperation in the city, perhaps in rebuilding housing.

The Chinese leader also could pay a visit to retired revolutionary leader Fidel Castro, 87, who led Cuba for five decades. He stepped aside eight years ago during a health crisis. Russian President Vladimir Putin visited with the elder statesman on a visit to Cuba 10 days ago.

Oil deals in Caracas

Earlier in Caracas Xi signed a raft of oil and mineral deals with Venezuela. On the trip, he has reached out to resource-rich countries such as Venezuela and Argentina at a time when they are often shunned by the United States and Europe.

The deals spanned a range of sectors from oil to infrastructure and included $4 billion for a joint development fund, $691 million to explore Venezuela’s gold and copper reserves and an agreement to develop the countries’ third joint satellite.

“Venezuela has become one of the top countries for Chinese investment, … our seventh oil supplier and fourth Latin American trade partner,” Xi said in Caracas.

The Venezuela visit comes after the Chinese leader agreed to an $11-billion currency swap with Argentina and extended much-needed investment to President Cristina Kirchner, whose cash-strapped government, locked out of capital markets since defaulting on its debt in 2001, is staring down the threat of another default.

Xi kicked off his tour last week by proposing a new $20-billion infrastructure fund for Latin America, underlining the fast-growing Asian giant’s increasing interest in the region.

He also launched a new $50-billon development bank along with the other emerging powers of the so-called BRICS group — Brazil, Russia, India and South Africa — at a summit in Brazil.

The move, which creates an alternative to the Western-dominated World Bank, was hailed as contributing to “a new international order” by Cuban President Raúl Castro — Xi’s host at the next and final stop on his tour.

‘Not about ideology’

But although Xi has spent his trip rubbing elbows with leftist leaders who tend to view the United States with a critical eye, his tour is less about ideology than business, said Venezuelan political analyst Carlos Romero.

“China’s political and economic expansion is pragmatic in character. It’s not about ideology or competition with the United States, but a Chinese policy of looking long-term for natural resources in different parts of the world,” he told AFP.

“China knows Argentina and Venezuela hold huge natural resource deposits, particularly two they are desperately searching for to fuel an economy and a society like China’s: oil and food in the case of Argentina, and oil and gas in the case of Venezuela.”

The partnership comes at a welcome time for Venezuela, which is in the midst of an inflation crisis and struggling under a pile of unpaid debts to foreign firms.

China, the second-largest market for Venezuelan oil after the United States, pays for its average 640,000 daily barrels in part by writing down the $17-billion debt Caracas owes it.

Both countries have said they want to increase oil exports to one million barrels a day in the coming years.

Chinese trade with Latin America has grown rapidly in recent years, reaching $261.6 billion in 2013. China is now the second-largest trading partner of many countries, including Argentina and Cuba, and has been Brazil’s largest since 2009.

In 1990, China ranked just 17th on the list of Latin American export destinations.

Beijing has also ramped up investment in Latin America to about 20 percent of its total foreign direct investment of $90 billion last year.

This is Xi’s second visit to Latin America and the Caribbean since taking office in 2013. Last year he toured Mexico, Costa Rica and Trinidad and Tobago.

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