Thursday, September 29, in Beijing, the President of Belarus Alexander Lukashenko held talks with President of China XI Jinping. Lukashenko thanked the Chinese leader for his significant personal contribution to the development of bilateral relations. Judging by sounding in recent statements by the highest officials of Belarus, the official Minsk in its foreign economic relations of the faster switches from Russia to China. The figures confirm the start of change of the vector, but away from the full orientation of its economy by Russia, Belarus will not soon.
The change of policy
A three-day visit of Alexander Lukashenko to people’s Republic of China (September 28-30) even before its inception was positioned by the Belarusian leadership as a landmark. For the authorities it marks the attempt of Minsk to change the main foreign trade partner is to shift from Moscow to Beijing.
In addition to meeting with XI Jinping, Premier of the State Council of China Li Keqiang, Chairman of the national Committee of the people’s political consultative Council of China Yu Zheng Sheng, Lukashenko during the visit will meet with businessmen and bankers.
The last few years, Lukashenko strongly demonstrates the turn towards China from Russia. In August of this year, he called China “the most important geopolitical partner of Belarus”. First he spoke only Russian. Today China is not only generous loans to the Belarusian government in Minsk and builds industrial parks, but perevooruzhit the Belarusian army — together was created reactive system of volley fire (MLRS) “Polonaise”, the competitor of the Russian “Smerch”. China, not Russia, orbited the second Belarusian satellite (this occurred on 15 January 2016).
In fact, China has long been quietly turned into one of the main lenders to the Belarusian economy. So, on the eve of presidential elections-2010 for Belarus was opened by the Chinese credit line worth $15 billion It is possible to stabilize the economy after the crisis of 2009 and before the election to raise salaries and pensions, which largely ensured the victory of Alexander Lukashenko in a fairly dramatic battle.
In the spring of 2015, Chinese President XI Jinping visited Minsk. During this visit, we signed about 50 agreements totaling approximately $18 billion, Lukashenka and XI Jinping agreed to grant Belarus loans for $7 billion, of which $3 billion on concessional terms. In addition, another 800 million (about $120 million — RT) yuan, Belarus received in the form of grants for implementation of social projects.
All this money — much more than that Belarus received in the form of loans from Russia and from the International monetary Fund. In this case, however, it is important to understand China’s “real” money does not, all of the allocated Finance — related. That is, the money stays in Beijing, and the Belarusian government can spend on the purchase of Chinese goods and equipment. But to give you have real money. Or tolerance of the Chinese owners of the most “delicious” pieces of Belarusian industry.
The Belarusian government admits that so far from China were mainly loans, but now the official Minsk is ready to allow Chinese investors in various sectors of the economy. “The state visit of President of Belarus to China marked the transition from the credit-investment cooperation in direct investment, said Deputy head of the presidential Administration of Belarus for economy Nikolai Snopkov. — Accumulated investments in the last five years compared with the previous increased by almost four times. Foreign direct investment from China in the last five years increased 10 times. The question, of course, lies in the capacity of markets and the ability of our businesses to adopt Chinese into production cooperation”.
By the end of 2015 China entered the top three trade partners of Belarus. Trade with China in 2015 amounted to $3,302 million and grew compared to year 2014 of 5.6%. The Belarusian export made up $800 million (22% more), imports from China of $2.4 billion (1.1% more). Belarusian authorities expect that by 2020 will be able to reach the level of export supplies from Belarus to China worth at least $1.5 billion.
Among the most notable “fruit” of the Chinese investments in recent years — the construction and launch near Minsk Assembly plant “Belgee”, producing Chinese cars like Geely Belarus, and — in the future — for Russia. The current visit of the Belarusian President needs to launch several similar projects.
Who is more profitable to be friends
According to some experts, the special effects for the Belarusian economy from the current Lukashenko’s visit to Beijing is not expected.
“In my opinion, Lukashenko was bored, so I decided to take off in China. The Belarusian economy does not feel the effect of his home — says Belarusian economist Lev Margolin. — We have repeatedly seen that the money spent on the trip, not pay for. But flying Lukashenko is not alone, but carries the whole delegation. You can imagine the amount spent on the trip, and the exhaust from it. Lukashenka’s visit to China will not become a breakthrough in bilateral relations. All existing Belarusian-Chinese projects is beneficial only to China, Belarus is unprofitable”.
Another expert RT, industrialist and Director of Agency of business ties Valentine Lopan, believes that it is in the course of the visit can only go about straightening a skew — excessive focus on Russia: “the Word “re-orientation” here is not appropriate. Building relationships with China long ago began a process that was, is, and will go at any level of relations with Russia. In the end, even as some European — to build long-term relations with China, especially economic.”
In August of this year, Belarus was visited by a delegation of the major provinces of China Hunan. Then Lukashenko promised Chinese businessmen, the most favourable conditions and proposed to establish joint ventures in his native Mogilev region. In September, the head of the state Committee for science and technologies Alexander Shumilin met with the leadership of the Chinese company’s Beijing Zhongguancun Development Group, with whom he discussed Chinese investment in a variety of high-tech projects in Belarus. All in 2016-2017 Belarus and China are implementing joint about 30 scientific and scientific-technical projects, reports the news Agency BelTA.
Belarus invited the Chinese to buy stock in 25 companies. According to the Deputy Minister of economy Alexander Yaroshenko, filed by the Belarusian side was listed as a top enterprise and smaller companies. “It is necessary for our companies to new markets, technology, production, — said Yaroshenko. Are companies from different industries, but primarily we are talking about the industrial sector, energy, construction industry. The observed enterprises of the cement industry, for the production of metal”.
But the main project in Belarus is still currently under construction near Minsk enormous (80 sq km) of the Belarusian-Chinese industrial Park “Great stone”, and in fact — megasklad Chinese goods at the border with the EU. It is clear that both the interests of Russia: the transit of Chinese goods through its territory is automatically reduced.
We add that the Chinese people in Belarus have always been interested in potash fertilizers. The last signed agreement we are talking about supply China with potash at $1.3 billion.
Geographical position as a commodity
However, now Belarus offers China a more tangible “goods” — the geographical position of a transit country.”Lukashenko is trying to sell China special favour of the Belarusian authorities as a unique opportunity for comfortable work in the market of the European Union. In fact, he began to create an enclave of the Chinese economy in Eastern Europe, told RT the Belarusian political scientist Anton Platov. — Under construction near Minsk Technopark Chinese investors lured by the opportunity to place Assembly plants directly at the border with one of the largest markets for Chinese companies — the European Union. This will allow them to save significantly on logistics costs”.
“They are even exempted from taxes under the brand name creating high-tech industries, and in fact for localized Assembly. No accident that among the first investors in Chinese Technopark — electronic corporations ZTE and Huawei. But to enhance its value for China, Minsk needed to solve the problem in the relationship with the European Union. That Lukashenko is quite successful, and had released political prisoners, held relatively free elections, and even allowed the opposition in Parliament. Europe’s response — the lifting of sanctions and the strengthening of mutual trade. That is what had to be Chinese.”
The Europeans will sit as silk?
A few years ago, China put forward the concept “New silk road” — the Eurasian transport corridor, aimed at the conquest of Europe Chinese goods. We are talking about a single transport network from the Pacific to the Baltic sea, to establish a trade corridor for direct delivery of goods from East to West, increasing the share of calculations in national currencies of the countries through which will pass this traffic.
Geographically Belarus is situated in such a way that connects the Eurasian economic Union and the European Union. Because XI Jinping at the last meeting with Lukashenka promised to Finance the construction of the necessary infrastructure in Belarus. Moreover, the conflict in Ukraine led to the fact that part of the transit facilities that were previously the prerogative of the Ukraine, moved to Belarus. There was also a new factor — the growing volume of transit from China to EU. As a result, the projects of construction of logistics centers, manufacturing and industrial sites along the “New silk road” began to replenish finances.
The main object in three directions, “the silk road”, two of which pass through Belarus, is the project of the industrial Park “Great stone”, in which China plans to establish a large trade and logistics base, and in fact hub from Asia to Europe. The Chinese Corporation is ready to invest in the creation of a “dry port” near Minsk $500 million loan for the same amount the Export-import Bank of China is ready to allocate for development of infrastructure of Belarusian Railways in the framework of the “silk road”. And this, according to the Chinese themselves, only the beginning.
