China-Cuba Foreign Direct Investment: U.S.’ Opportunity

Recent Chinese investment has failed to materialize into growth for Cuba. Further, bills from both the House and Senate to lift the U.S. trade embargo on Cuba spur a new opportunity for global companies. Situated 90 miles off the tip of Florida, Cuba has been subject to a trade embargo for 59 years, outliving the Cold War. By lifting this embargo, Cuba could quickly become a major destination for U.S. tourists in the Caribbean, therefore facilitating the need for billions of dollars in infrastructure projects, but China is beating the US to the punch.

From 2014 to 2015 China’s trade with Cuba grew by 57 percent (from 1.33 billion USD to 2.33 billion USD). Further, Chinese communication firms are investing in infrastructure projects on the island. Huawei, one of China’s largest telecommunications companies, has already begun the construction of Wi-Fi projects to increase Internet penetration to both businesses and homes. But, projects such as these and the MOUs (Memorandums Of Understanding) to construct $500 million golf courses do not bring Cuba into the 21st century. Cuba needs advanced, industrial technology to revitalize its economy.

The desire for high-quality consumer products and technology can be seen in Cuban consumers preferring US made goods to those of China. With close to 2.5 million Cubans living in the United States, more than half a million Cuban-Americans travel back to Cuba with U.S. products, equaling 3.5 trillion USD annually. With the introduction of Congressional House Bills. H.R. 572 (facilitating the export of U.S. agricultural products, medical devices, and medicines to Cuba), H.R. 574 (lifting the trade embargo on Cuba), and S. 472 (to repeal or amend current laws restricting trade with Cuba), companies such as Va-Cuba Inc. have applied for OTI (Ocean Transportation Intermediary), NVO (Non-Vessel operating) and OFF (Ocean Freight Forwarder) licenses. Planning to facilitate the demand for ocean freight forwarders between Cuba and the US, it is time to jump on the boat and prepare for new challenges.

Best regards
und viele Grüße aus Charlotte
Reinhard von Hennigs