Whereas the Chinese government offers wide latitude to private enterprises, both domestic and foreign-owned, to operate on Chinese soil, the Cuban government severely limits the scope for private economic activity. This is one reason why China “feels” like a freer society than Cuba, despite the fact that the Chinese government maintains a large and expensive repressive apparatus. To grow the Chinese economy, China’s rulers have had little choice but to relax their grip on investment and entrepreneurship.
In recent years, the Cuban government has allowed for the emergence of a small-scale “self-employment” sector. Yet this sector shouldn’t be mistaken for private enterprise, as self-employed individuals are barred from building their own independent businesses. If sanctions are lifted without conditions, it seems more likely than not that the Cuban government would insist that all U.S. trade and investment be channeled through state-owned entities. Given Cuba’s parlous fiscal state, this would be an enormous boon.
Rather than lift sanctions unilaterally, the U.S. ought to consider modifying the approach it has taken since passage of the Helms-Burton Act of 1996. Under Helms-Burton, the U.S. is prepared to lift sanctions if and when Cuba releases political prisoners and allows for the inspection of its prison facilities, legalizes political activity and opposition parties, and abolishes its secret police. Essentially, the law insists on immediate regime change, and it is easy to see why Cuba’s rulers find its conditions unacceptable.