Warning, long answer. But you can't expect a brief one when you ask about something as complicated as this.
First of all we don't have an embargo on Cuba "because Cuba is a communist state." The embargo was implemented by JFK as a punitive measure in response to the expropriation without compensation (theft) of $1.8 billion in American assets by the Castro regime.
The embargo is punishment for violating the common sense rules of international business "thou shall not steal". I'm glad you mentioned China. A little thing you may not know about China is that even after Nixon "opened" to China we still did not trade with that country for several years until China settled for similar expropriations in 1979. Granted it was a pennies on the dollar and China's expropriations from the 1940s were tiny compared to Cuba's in the 1960s but China basically said "we get it, we're sorry, it won't happen again."
Removing the embargo without first getting a similar gesture from the Cuban government sends a signal to Cuba and other countries that it's OK to steal from Americans as long as you are belligerent enough for long enough. If Cuba wants to be treated like China then they should do as China did.
By the way that's not the only difference between Cuba and China. China has privatized HUGE segments of its economy, allows private property, etc. etc. Cuba's economy is still about 90% state owned. In China there's at least the hope that as the Chinese middle class rises that it will demand political reforms in Cuba. But Cuba has resisted such economic reforms precisely because of their democratizing effects.
Lowering the embargo does not mean that American corporations will be able to go into Cuba and build strip malls and McDonalds franchises willy nilly. It means that only those American corporations that the regime deems acceptable will be able to conduct joint ventures, with the Cuban state holding the majority stake (the only way foreign companies are allowed to operate in Cuba), in only the industries that the central planners allow. All of the resource allocation decisions, employment decisions, compensation for workers decisions will be made by the same people who have been making disastrous decisions in Cuba for five decades: the communists.
The entire western world except the U.S. already invests in and does business with Cuba under these rules and it has not drown castro in capitalism.
Quite the opposite, it's extended castro a lifeline because he takes foreign money, squanders it and then finds a new group of suckers to take advantage of.
The only "trickle down" that can occur is what the communist party officials allow and to date they have never allowed enough trickle down to make a difference. The average worker in Cuba makes less than $20 a month. American corporations in Cuba won't be allowed to pay more than that. In fact they wouldn't pay the employees at all. They would (as all foreign companies) have to pay the Cuban state at a negotiated rate for workers supplied by the state's employment agency that pays the workers that $20 maximum. The difference goes to the bureaucrats and the state. It's an enabling of the regime not a destabilizing of it.
The real embargo in Cuba is the one the regime has put on its own people. It embargoes information, it embargoes freedom of speech, it embargoes freedom of movement and assembly it embargoes private property rights.
It's Cuba that needs to change it's policies not the U.S.
Lastly, the U.S. is currently Cuba's largest food supplier. Did you know that? There's an exception to the embargo for food and medicine that Cuba can buy for cash up front. This whole thing about the embargo is about two things, getting American tourist dollars (tourism in Cuba is down over the last few years and American tourists flocking to a once forbidden land will pump it up) and obtain credit. Because of the embargo Cuba can't borrow from certain international entities like the IMF and World Bank. Cuba wants credit because its free money it never has to pay back. Cuba's credit rating is garbage because it never pays anyone back. This is a country that had no foreign debt in 1959. Cuba now owes more than $15 billion to various countries and that doesn't include the Soviet Era debt it owes the Russians. It's all a shell game. The next suckers: the Americans.
