Economic Reform in Cuba and China

Adrian Hearn Despite significant differences in economic and demographic scale, the governments of Cuba and China have confronted a comparable “dual” challenge as they open their economies to foreign investment. (UNCTAD, 2005; United Nations Population Information Network, 2005) The first part of this challenge has been to promote greater interdependence and collaboration between foreign multinationals and local enterprise; the second part has been to build stronger links between state and non-state actors to promote civic participation and social stability. The governments of both countries have confronted this challenge not by replacing the state apparatus with market forces but by encouraging their coexistence. (Hearn, 2004; Foster, 2002; March Poquet, 2000; Dilla Alfonso et al, 1999; Goldstein, 1995; The goal has been to harness local creativity, initiative, and social capital within the framework of nationally integrated, state-guided commercial initiatives that both facilitate economic growth and consolidate political support. Economic reforms were introduced in China long before—and have advanced well beyond—those adopted in Cuba, though the recent decentralization of economic governance in Havana’s historical zone, by far the most progressive economic plan in contemporary Cuba, has proven itself to be a viable model for other urban centers. Comparing political and economic decentralization in Cuba and China reveals how societies in transition from centralized governance can derive a range of advantages from their social and political legacy. Socialism in both countries brought about strong popular nationalism, but the scarcity of