The death of revolutionary and Cuban leader Fidel Castro on Friday, Nov. 25, will likely affect Chinese businesses in the Caribbean island-nation as relationship between the U.S. and Cuba is expected to normalize in the future, experts said.
The Global Times reported that the normalization of ties between the two countries may result in the influx of American businesses in Cuba which could step up competition with Chinese firms.
The political situation is being closely watched by Chinese businessmen in the country, the report said.
"The sentiment has been calm on the streets of Havana after the news of Fidel's death was announced, for me, it means the political environment is stable and I also sensed the Cuban government has wanted to open up. Both are good news for us," a source familiar with a golf course project called Bello Monte told the Global Times Sunday. The project is a joint venture between the Beijing Enterprises Group and the Cuban government.
In March, U.S. President Barack Obama visited Cuba, with hope of starting the normalization of relations and lifting more than 50 years of U.S. policy to isolate Cuba. He said the embargo on Cuba may also be removed by the U.S. Congress in the next administration, regardless of whether a Republican or a Democrat wins in the elections, a Reuters report said in March.
According to Jiang Shixue, director of the Latin American Studies Center at Shanghai University, Chinese companies may have an easier time to do business in Cuba if the U.S. would lift its ban.
Chinese companies working in the country have been affected by the U.S. embargo. This includes Chinese ships that enter Cuban ports, which must spend 180 days before they can discharge their cargo in any U.S. port.
How Trump will handle the relationship between the two countries is yet to be seen, Jiang added.
"From campaign rhetoric, you don't know for sure if U.S. President-elect Donald Trump will pursue the path set up by President Obama. There might be some overhauls. I am 51 percent pessimistic on the prospect between the two countries," Jiang told the Global Times.
"However, Trump will not likely do something drastic too, like closing down the newly opened embassy in Havana. Plus the fact is that Cuba is far from the most urgent issue on Trump's to-do list, and the most likely situation will be that the new administration lets the bilateral relationship cool down a bit from the current level," Jiang said.
Chinese businesses were uncertain of their future on the thought that the U.S. would lift its embargo on Cuba, the source from Bello Monte said.
"The embargo could be lifted within two years at the earliest. So we must be prepared, to ready ourselves," the source said. "Investors and developers are coming sniffing for opportunities, from the U.S. and from Japan, and if we wait until all the others come to squeeze the market, it is bad."
The source added that the uncertainty can be avoided if the construction of the Bello Monte resort will be hastened.
Jiang said that U.S. commercial interests in Cuba had been there even before the revolution.
"U.S. companies bear advantages in three aspects--close vicinity, no barrier in language and communication, and the long-time historic ties," Jiang added.
"I heard that one U.S. company called its consultant to ask about the prospect of the company selling its kitchenware it made in Cuba within 24 hours after the two countries announced the process toward normalization of ties in the end of 2014. How many of our companies did the same thing?" Jiang said.
Starwood Hotels & Resorts Worldwide, a U.S.-based company, signed a multi-million dollar deal with Cuba to manage and promote two properties in Havana.
Meanwhile, experts said that although Chinese carmaker Zhejiang Geely Holding Group and Chinese bus maker Yutong, both have acquired a sizeable market share in Cuba in recent years, they would still feel the impact if the embargo is removed.