BY TOM LASSETER
McClatchy News Service

Why is the world's third-largest economy spending hundreds of millions of dollars in Cuba, an impoverished island with few natural resources and a history of making things difficult for foreign investors?

The answer is simple: China is the world's third-largest economy.

A series of deals from Beijing to Havana are partly in line with Chinese economic expansion across the world -- trade between China and Latin America grew from $10 billion in 2000 to $140 billion in 2008 -- but there's also a nuanced political bond between the two that seems to go beyond cash.

The growing relationship suggests that China's financial clout has put it in a position to cultivate something like client states, in the case of Cuba at least, among smaller countries that receive relatively large amounts of Chinese funding and in return toe the line when it comes to issues such as Beijing's controversial policies toward Tibet and Taiwan.

When a Chinese legislative delegation flew to Havana earlier this month, among the reported $600 million in aid and loans -- a figure reported by the Agence France Presse wire service that officials in Beijing wouldn't confirm -- were promises to update Cuba's traffic signal system and dispatch technicians to a vegetable canning factory.

GETTING INVOLVED

Since becoming China's president, Hu Jintao has visited Cuba more times -- twice -- than any other Latin American country, including oil- and soybean-rich Brazil and Venezuela. It's a very close level of involvement for a country that hasn't been of much strategic importance since the Cold War ended.

"We are old friends,'' said Wang Youming, an analyst at the China Institute of International Studies, a foreign ministry policy institute.

COMMUNIST NATIONS

Wang referred not just to the fact that China and Cuba are among the last communist nations still standing, but also to what Beijing considers important public backing from Fidel Castro and his younger brother Raúl on Taiwan and Tibet.

Trade between the countries is often cited as being more than $2.5 billion, but that's peanuts for a powerhouse such as China.

"The political returns are the most important,'' Wang said. "Cuba has provided consistent support for China's international stance, especially with the Taiwan issue.''

China claims Tibet and Taiwan as parts of its domain, and has bristled at Western support for what it calls separatist movements in both places. Cuban officials have said repeatedly that they share China's view.

The Chinese government ``sees questions like Tibet, Taiwan . . . to be of the highest strategic import,'' said Daniel Erikson, a Latin America expert at the Inter-American Dialogue, a nonpartisan research center on Western Hemisphere affairs. ``The fact that Cuba is always on their side in these issues is crucial to China.''

There are, of course, financial considerations -- China is now Cuba's second-biggest trading partner, and there are hopes in Beijing that as Havana opens its markets, Chinese companies will get a big chunk of industries such as cellphones and consumer goods. China has made a $500 million deal to invest in Cuban nickel, a key component in the steel needed by China's construction boom.

Cuba also gives Beijing a vantage point for the rest of the Caribbean and a source of informed counsel in a Latin American neighborhood where some governments have turned left in recent years.

U.S. IN MIND

As much as Beijing has advanced in Cuba, though, it won't pursue matters there at the risk of its far more lucrative economic ties with the United States, according to observers in Beijing and Washington. That approach mirrors China's dealings in places such as Venezuela, where President Hugo Chávez regularly hurls invective at Washington.

"They will seek as much political and economic advantage as they can get without jeopardizing their relationship with the United States,'' Erikson said in a phone interview.

Mindful that America has maintained an embargo against Cuba for more than 45 years, Chinese officials have been careful to avoid any connection -- rhetorical or otherwise -- to flare-ups between Havana and its northern neighbor.

``China does not want to get itself involved with the bilateral relationship between Cuba and the U.S.,'' said Jiang Shixue, a senior analyst and administrator at the government-funded Chinese Academy of Social Sciences who's a previous deputy director of its Latin America studies program. ``China wants to do business. If you put economic cooperation and political interference in the same basket, things will be terrible.''

Beyond those sensitivities, Jiang said, there's no reason why friends can't make deals.

Tom Lasseter, McClatchy's Moscow Bureau Chief, is on temporary assignment to Beijing.