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Feasible
Report On Opening Company In Cuba
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Cuba,
locating to the northwest of Caribbean Sea, 180 km away from
Florida Peninsula of the United States, is the largest island
country in Caribbean area. The population of Cuba is 11,000,000.
The sixty-six percent is white people, the thirty-three percent
is black people and half-breeds, and the others are Chinese.
The capital Havana has the five percent of population.
Cuba is composed of Cuba Island, Youth Island and other more
than 1600 islands. The most part of Cuba Island is plain,
and only in the west, central and southeast regions there
are some mountains and hills. The most part of Cuba is tropical
rain forest climate. The annual average temperature is 25¡æ.
The average temperature in summer is 27¡æ, and in winter is
23¡æ. The lowest temperature is 6¡æ and the highest is 35¡æ.
It is in rainy season from May to October every year, and
in dry season from November to April of the next year. The
sugar cane and its processing industry is the basis of Cuban
economy. Besides, tobacco, acid fruits, coffee planting and
other fruits are also in large proportion. Fishing is another
important field of Cuban economy. The marine products of Cuba
are well known all over the world. There are abundant mineral
resources in Cuba, such as copper, chromium, magnesium, manganese,
marble and so on. The storage of nickel, approximately 20,000,000
tons, is the largest in Cuba and the first in the world. And
it is the fourteenth in producing citric acid and oranges
in the world. The export of these fruits is the forth in the
world, second only to Spain, the United States and Morocco.
Since the 1960s, the trade with East Europe, especially with
the former U.S.S.R, has been the most part of the external
trade. Take 1988 for example, the export to the socialist
countries took 86% of all. And in the aspect of the import,
the socialist countries took 87%, and only the former U.S.S.R
took 71%. The trade between the former U.S.S.R and Cuba was
actually the allowance form of favoring Cuba. The former U.S.S.R
paid four times the price in international market for the
sugar of Cuba, but only sold petroleum to Cuba at the price
quite lower than that in the international market. However,
since upheavals occurred in East Europe and the former U.S.S.R,
the economy of Cuba has declined.
The Cuban government which is leaded by Fidel Castro has realized
clearly , that in order to keep the politics stable, they
must first solve the problem of the people's livelihood. And
this problem can be solved not only by themselves, but also
by other countries' support. Cuba will lose more than one
billion foreign exchange every year, because the economy of
getting allowance from the former U.S.S.R and East Europe
has finished. Therefore, how to seek for other countries'
support to offset the loss, has become the most important
problem at present. If the problem of the people's livelihood
cannot be solved well, the government of Fidel Castro will
not keep stable. Consequently, the Cuban government opens
the door, and welcomes the countries all over the world to
come and strengthen the commercial relations with Cuba. And
it is also the very rare and wonderful chance for china to
march to the Cuban market.
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Potential
Cuban market
The China-Cuba commerce began in the 1960s. In these 30 years,
the commerce between China and Cuba has developed smoothly.
It is mainly because that the two countries can mutually benefit
in economy. The economy of Cuba is comparatively single. The
light and textile industries, especially the production of
the consumer goods, develop very slowly. Therefore, a lot
of goods of China sell well in Cuban market. In recent years,
along with the development of the relationship between two
countries, the bilateral trade developed rapidly, and Cuba
has become the largest export market of China in Latin America.
China mainly imports sugar, nickel and medicine from Cuba,
and exports hundreds of kinds of goods to Cuba, such as grain,
oil, food, medicine, the electric machines, the light and
textile products, the products of chemical industries, the
livestock products, the minerals and so on. Although the total
amount of imports and exports of Cuba has declined because
of the stop of the allowance commerce, the capability of its
market exists objectively. In 1998, China became the third
biggest commercial partner of Cuba, and its fifth biggest
country of imports and exports. Now, we can see cheap and
good Chinese goods everywhere in Cuba, which are appreciated
by Cuban people. However, the Chinese goods sold in foreign
exchange shops in Cuba are not imported directly from Chinese
companies, but resold by Panama from South Korea, Japan and
Spain. Acceding to the experience of international trade,
forestalling others can get twice the result with half the
effort.
When the vice-minister of the Cuban ministry of external trade
ÅåµÂÂÞo²¨À³¸ê was calling at Beijing, he said that Cuba was implementing
opening policy and framing some favorable policies to attract
foreign capital. Due to the 30-year-long traditional friendship
between China and Cuba, the government of Cuba would provide
the most favorable policies to Chinese companies. The vice-minister²¨À³¸ê
said that the laws of Cuba is flexible, especially to China.
So any problem can be discussed, including the proportion
of investment, exemption and so on.
To sum up the experience of developing commerce in the former
U.S.S.R, East Europe and Vietnam, we can see that Cuba, which
opened to the world just now, provides us a precious chance
to exploit its market and march to Latin America.
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Three. The Urgency
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Cuba opens
to the world, and the foreign merchants are enthusiastic to
invest, so the there is no time to hesitate.
Cuba adopts the opening policy, meanwhile, some countries
and areas such as West Europe, Canada, Japan, South Korea
and Taiwan begin to infiltrate into this country. It is known
that there are more than 300 joint-stock companies in Cuba
at the moment, most of which are established by cooperating
with Spain, Canada, France and Mexico. Moreover, at present,
at least one joint-stock company will be founded every week.
In terms of this situation, many countries attach importance
to this market and have begun to investigate it.
(°£·ÆÉç New York, Feb 17th, 1994) According to a report published
in the United States today, after the economic reform and
the democratization of the politics, Cuba is possible to become
a powerful country in economy in Caribbean area. This conclusion
is based on its condition and the changes occurred in Caribbean
area in 1980s. This report is drafted by American former ambassador
to Haiti, the expert of the International Strategy Research
Center . He thinks that there is cheap labor force with high
quality in Cuba. And the economic foundation there is firm,
so Cuba can become the extension of Florida.
After investigating in Cuba for a few weeks, the officials
of the Taiwan Trade Association, said in the report, "
Although it is difficult to do business in the market of Cuba
at present, Cuba tends to be the great power in economy in
America in the near future. Thereby, there is no time for
us to hesitate. We should grasp this good chance and make
the investing plan immediately.
China has advantages that it has occupied the market of Cuba
for many years, and the government of Cuba gives China a lot
of preferential policies, so we will not and should not lose
such a market with big potential.
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Four. Investment Envirment
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1. The facilities of transportation are
sufficient, and the qualities of workers are high
Like other countries in Central America, Cuba possesses
very long roads. The system of its railway is larger than
the sum of systems in Caribbean area and Central American.
Compared with its territory, the density of its railways
is as dense as that of the United States. In the aspect
of airways, it has five international airports and nine
internal airports. More than ten modern and mechanized ports
locate on the coastline from north to south. There are 389,000,000
employees in Cuba, whose average level of education is ten
years. There is one university students in every 15 people,
and one technician in every 8 people. Cuba has 2% of population
of Latin America and Caribbean area, but has 9% of scientists
of this area.
2¡¢ The preferential investing policy
According to the law of Cuba, in joint-stock company, the
stock of Cuba should be 51%, and that of the foreign merchants
should be 49%, but China is excepted. The joint- stock companies
cannot pay the income tax in a period, and they have the
right to import and export. All the profit can be remitted
freely. The chief principle is to protect companies, especially
at the beginning of their development. In accordance to
the special situation, Cuba National Committee of Ways and
Means will empower the joint-stock companies to enjoy tax-free
temporarily. Likewise, in the aspect of custom, it is also
available.
3¡¢ Adjust the policy and quicken steps of reform
In the face of the present situation, the government of
Cuba adopts a series of reforming and opening measures.£º
1) The legalization of having dollars by the citizens
In the past, the currency of dollars is forbidden in Cuba,
and it is illegal for citizens to possess dollars. On July
26th, 1993, Fidel Castro announced to abolish this ban.
In Cuba, the emigrants' remittance reached to one billion
dollars in 1993. This kind of remittance will possibly become
one of the main sources of foreign exchange. After the abolishment
of the ban on foreign exchange, people can use dollars to
buy goods freely in the shop which is for foreigners and
in which the goods are adequate. On October 17th, 1993,
the Japanese newspaper reported " In Havana, the national
supermarket is desolate, while the foreign exchange shop
is crowded. It is said that the daily sales of some shops
have reached to more than ¡ç100,000.
2) Reorganize the system of leaders, and appoint young cadres
The government of Cuba has elevated a lot of young and competent
cadres in order to produce favorable conditions for reforming
and opening. It embodied the determination of Cuban government
to solve the economic crises by reforming and opening. The
characteristic of these cadres is young and competent, and
rich in courage gumption. For example, the foreign minister
Gansaleisy is only 37 years old.
3) Implement the agricultural reform, and carry out the
cooperation
In Cuba, the food supply has been in shortage for a long
time, especially since the upheavals occurred in the former
U.S.S.R and East Europe. Aiming at this situation, the government
of Cuba adopted a series of reforming plans on agriculture
in 1993.
4) Improve the environment and attract the foreign capital
One of the measures to solve the present crises is to attract
foreign capital. Considering the national conditions, the
government of Cuba takes the advantage of the advantaged
tourist resources to attract foreign capital, and open to
the world. In recent years, the tourism developed quickly.
In 1998, there were 1,400,000 tourists traveling to Cuba,
and the profit reached to ¡ç1,900,000,000. However, there
were only 500,000 tourists traveling to Cuba, and the profit
was only ¡ç500,000,000. Now, the income of the tourism has
reached to ¡ç700,000,000, and become one of the main sources
of foreign exchange of Cuba. It is also useful for solving
the present crises.
5) Carry out the multilateral diplomacy, and produce the
external conditions for the reform.
After the upheavals occurred in the former U.S.S.R and East
Europe, Cuba adopted the active manner to carry out the
multilateral diplomacy, and on longer only depended on the
U.S.S.R. Cuba was eager to improve the relationship with
the United States, and actively cooperate with the United
States on forbidding drugs. At the some time, the United
States show its welcome to the reforming and opening policies
of Cuba. Lately, the foreign minister of Cuba called on
Latin American countries and Asian countries frequently,
such as Brazil, Mexico, China, Vietnam and so on. The good
international environment provides Cuba favorable external
conditions for reforming and opening.
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Five. The Proposal On Developing Trade
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The commerce of Cuba was focused
on the former U.S.S.R and East Europe previously, but now
these countries are confronted with the difficult economic
situation so that they cannot help Cuba. Therefore, at present,
Cuba is very lack of the parts of many machines and conveyances.
Because Cuba is short of the foreign exchange in short term
and its ability to eliminate and renew is very poor, the parts
of the common machines and conveyances possess the big potential
to develop. Other necessaries concerned with the people's
livelihood, also very short, are worth developing. Besides,
Cuba is developing sightseeing building, so the building materials
and the tourist goods also possess the potential. These kinds
of goods are easy to get the ratification of the Cuban government.
Moreover, the foreign exchange is also in shortage.
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Six. The Proposal On Investing
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At present, the most suitable trades for
investors are those from which the investors can gain profit
in minimum time, like tourist trade. And this kind of investment
is welcome by the government of Cuba. Because Cuba is in
dire need of foreign exchange, there is no pertinence restriction
in the opening to the world. There are 10,000,000 people
in Cuba, and the level of education of them is comparatively
high. Besides, the materials of the people's livelihood
are in shortage. In case the United States abolish the embargo
to Cuba, a lot of foreign capital will burst in. Therefore,
according to the foreign experts, the potential of Cuba
will not be lower than that of Kuwait after rebuilt and
the market of Vietnam after opening.
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