Up­ward Trends

The re­la­tions be­tween Be­larus and China have been marked by dy­namism in all ar­eas

Economy of Belarus - - CONTENTS - Alina GRISHKEVICH, Econ­omy of Be­larus Mag­a­zine

The re­la­tions be­tween Be­larus and China have been marked by dy­namism in all ar­eas

Mr Tozik, what is your opinion about the cur­rent state and prospects of Be­laru­sian-Chi­nese re­la­tions?

The re­la­tions with the Peo­ple’s Repub­lic of China are among the pri­or­ity ar­eas of the for­eign pol­icy of the Repub­lic of Be­larus.

We have achieved a lot since the diplo­matic re­la­tions were es­tab­lished twenty years ago. We ex­change vis­its on a reg­u­lar ba­sis at the high and top lev­els, main­tain

On 17-20 Septem­ber, Minsk wel­comed a par­lia­men­tary del­e­ga­tion of the National Peo­ple's Congress of China led by its Chair­man Wu Bang­guo. The visit be­came an im­por­tant event in the bi­lat­eral re­la­tions from both po­lit­i­cal and eco­nomic points of view. The Econ­omy of Be­larus Mag­a­zine has ap­proached the Deputy Prime Min­is­ter of Be­larus, Co-chair of the Be­laru­sian-chi­nese com­mis­sion for trade and eco­nomic co­op­er­a­tion, Ana­toly Tozik, with a re­quest to up­date us on the cur­rent state and prospects of Be­larus-china re­la­tions. China has be­come a strate­gic ally of Be­larus. And it is through this prism that one should look at the dy­namic de­vel­op­ment of Be­laru­sian-chi­nese re­la­tions in all ar­eas, Ana­toly Tozik says.

an ac­tive in­ter-par­lia­men­tary di­a­logue; there is an on­go­ing in­ter­ac­tion be­tween our govern­ment agen­cies. Be­larus and China co­op­er­ate suc­cess­fully within the frame­work of in­ter­na­tional in­sti­tu­tions, pro­vid­ing mu­tual sup­port on the is­sues of fun­da­men­tal im­por­tance.

The Be­laru­sian-chi­nese re­la­tion­ship got a strong im­pe­tus in De­cem­ber 2005 fol­low­ing the of­fi­cial visit of the Pres­i­dent of the Repub­lic of Be­larus to Bei­jing. Then, the lead­ers of Be­larus and China, Alexan­der Lukashenko and Hu Jin­tao, signed a joint dec­la­ra­tion in which they stressed that the Be­laru­sian-chi­nese re­la­tion­ship had ad­vanced to a new level of strate­gic part­ner­ship.

It is equally im­por­tant that over the last few years China has been among Be­larus’s top trad­ing part­ners. The high level of po­lit­i­cal re­la­tions be­tween the two coun­tries is an im­por­tant pre­req­ui­site for the dy­namic de­vel­op­ment of trade and eco­nomic ties, which is ben­e­fi­cial for both sides.

Speak­ing about the prospects of the bi­lat­eral re­la­tion­ship, we have many new op­por­tu­ni­ties for ex­pand­ing our ties due to Be­larus’s ac­ces­sion to the Cus­toms Union. Cer­tainly, it would be worth­while for Be­larus and China to set up ei­ther Be­laru­sian-chi­nese or fully Chi­nese-owned busi­nesses in Be­larus to sell their prod­ucts in the gi­ant mar­ket of Be­larus, Rus­sia and Kaza­khstan.

I am con­fi­dent that Be­larus and China will co­op­er­ate just as fruit­fully in tourism, ed­u­ca­tion, and sci­ence.

The global fi­nan­cial and eco­nomic cri­sis has re­shaped the sit­u­a­tion in the in­ter­na­tional arena. What was its im­pact on Be­laru­sian-chi­nese co­op­er­a­tion?

We have seen our co­op­er­a­tion grow­ing in­creas­ingly vi­brant over the last sev­eral years. I will give you some fig­ures. In 2008 Be­larus-china trade in goods and ser­vices reached $2.2 bil­lion. In 2009 the global fi­nan­cial and eco­nomic cri­sis had a cer­tain im­pact on our trade as we did not ex­port our potash fer­til­iz­ers to China, and the imports from China fell, too. But as soon as in 2010 the trade did not just pick up but out­did the 2008 level, hav­ing ex­ceeded $2.5 bil­lion.

As for this year, in Jan­uary-june the trade was $1.7 bil­lion, up 40% from the same pe­riod in 2010. And by the year-end we ex­pect it to reach $3 bil­lion.

There are a num­ber of projects car­ried out in Be­larus with the help of Chi­nese in­vest­ments. There­fore, we im­port a large vol­ume of in­vest­ment-pur­pose goods, which ex­plains the con­sid­er­able im­port fig­ures. I be­lieve the sit­u­a­tion will be chang­ing in the fu­ture and the in­ter­na­tional trade deficit we are now hav­ing will grad­u­ally re­duce, be­cause the na­ture of the projects we are do­ing with our Chi­nese part­ners is, as a rule, im­port sub­sti­tu­tion and ex­port ori­en­ta­tion.

Hence, we may say that Be­laru­sian-chi­nese trade and eco­nomic re­la­tions are bear­ing fruit and the global fi­nan­cial and eco­nomic cri­sis did not have a se­ri­ous im­pact on them.

In­vest­ment projects are among the key ar­eas of Be­laru­sian-chi­nese co­op­er­a­tion…

This area is in­deed very im­por­tant and ben­e­fi­cial for both sides. I be­lieve that the im­ple­men­ta­tion in Be­larus of large in­vest­ment projects with the help of Chi­nese loans will en­able us to re­fit our econ­omy faster, use lo­cal re­sources more ef­fi­ciently, and pro­duce com­pet­i­tive goods for the do­mes­tic and in­ter­na­tional mar­kets. Over the past sev­eral years this co­op­er­a­tion has been most in­tense.

Fol­low­ing the talks with Chi­nese Pres­i­dent Hu Jin­tao in Au­gust 2008, Pres­i­dent Alexan­der Lukashenko sug­gested us­ing Be­larus’ po­ten­tial at a larger scale to pro­mote China’s in­ter­ests on the Euro­pean con­ti­nent. To­day we can al­ready see how this con­cept works through in­vest- ments, lend­ing op­er­a­tions and other forms of in­ter­ac­tion.

For an ex­am­ple of fruit­ful Be­laru­sian-chi­nese co­op­er­a­tion, take a look at the re­fit­ting of sev­eral CHP plants in Minsk, for which the Chi­nese govern­ment pro­vided a pref­er­en­tial loan and an­other loan was ex­tended by China De­vel­op­ment Bank. Other ex­am­ples are projects to mod­ern­ize the Be­laru­sian ce­ment in­dus­try: the ren­o­va­tion of the ex­ist­ing fa­cil­i­ties and con­struc­tion of three new ones with the help of Chi­nese loans. By the way, those new fa­cil­i­ties marked the big­gest Be­laru­sianChi­nese co­op­er­a­tion ini­tia­tive in the his­tory of the bi­lat­eral credit and in­vest­ment co­op­er­a­tion.

On 17 De­cem­ber 2009, rep­re­sen­ta­tives of the Be­laru­sian govern­ment and China Exim Bank signed a com­pre­hen­sive co­op­er­a­tion agree­ment. Un­der that doc­u­ment, the Chi­nese bank opened a $5.7 bil­lion credit line for the Be­laru­sian govern­ment to fi­nance a range of projects in Be­larus.

A frame­work agree­ment on fi­nan­cial co­op­er­a­tion was signed by the Fi­nance Min­istry of Be­larus and China De­vel­op­ment Bank dur­ing a Minsk visit of China Vi­cePres­i­dent Xi Jin­ping on 24 March 2010. In line with the agree­ment,

the Chi­nese bank opened a credit line for Be­larus to the tune of $8.3 bil­lion. The par­ties also con­sid­ered set­ting up the China-be­larus In­dus­trial Park in Be­larus.

A govern­ment del­e­ga­tion of Be­larus met with rep­re­sen­ta­tives of China Exim Bank in Bei­jing on 7 June 2010. The par­ties con­cluded a gen­eral loan agree­ment to pro­vide Be­larus with a $1 bil­lion buyer loan on pref­er­en­tial terms.

Dur­ing the visit of the Be­laru­sian head of state to China on 9-11 Oc­to­ber 2010 the par­ties signed a pack­age of doc­u­ments to ma­te­ri­al­ize $3.5 bil­lion worth of joint projects in power en­gi­neer­ing, con­struc­tion, man­u­fac­tur­ing in­dus­try, road and trans­port in­fras­truc- ture. An agree­ment was con­cluded in De­cem­ber 2010 to pro­vide loans on pref­er­en­tial terms to con­struct power units at Bery­oza and Lukoml state district power plants.

Dur­ing the visit of top ex­ec­u­tives of China Exim Bank and In­dus­trial and Com­mer­cial Bank of China in June this year, loan agree­ments were signed to fi­nance ma­jor joint projects es­ti­mated at over $1 bil­lion. The projects in­clude the con­struc­tion of a plant to pro­duce bleached sul­phate pulp in Svet­l­o­gorsk, ren­o­va­tion of the Zhlobin-gomel sec­tion of the Minsk-gomel high­way М-5/Е271 and elec­tri­fi­ca­tion of the rail­way sec­tions Gomel-zhlobin-osipovichi and Zhlobin-kalinkovichi.

At present, a large-scale project to ren­o­vate the air-ter­mi­nal com­plex of the National Air­port Minsk is in the pipe­line. A modern in­ter­na­tional pas­sen­ger tran­sit ter­mi­nal, the sec­ond run­way and other fa­cil­i­ties will be con­structed there us­ing Chi­nese di­rect in­vest­ments.

I would like to men­tion the suc­cess­ful op­er­a­tion of a Be­larusChina joint ven­ture to pro­duce house­hold ap­pli­ances. The com­pany was es­tab­lished by the world’s largest man­u­fac­turer and ex­porter of house­hold ap­pli­ances Midea Group Co and Be­larus’ hold­ing com­pany Hor­i­zont. This project marked the ar­rival of large Chi­nese in­vestors in Be­larus.

A joint project to con­struct the Le­byazhy res­i­den­tial neigh­bor­hood in Minsk is an­other ex­am­ple of suc­cess­ful co­op­er­a­tion.

I would like to note that Be­laru­sian com­pa­nies have also im­ple­mented a num­ber of in­vest­ment projects in China. They in­clude joint ven­tures to as­sem­ble and pro­vide main­te­nance to BELAZ trucks in Bei­jing, pro­duce fod­der and corn har­vesters, and as­sem­ble Be­laru­sian trac­tors in Harbin.

What are the most re­mark­able joint projects in ed­u­ca­tion and cul­ture?

I will give you just one fig­ure: al­most 2,000 Chi­nese na­tion­als study at 22 uni­ver­si­ties of Be­larus.

The Con­fu­cius In­sti­tute was set up at the Be­laru­sian State Univer­sity in 2006. The in­sti­tute is to pro­mote China and the Chi­nese lan­guage, bring closer and mu­tu­ally en­rich the national cul­tures, fa­cil­i­tate trade, eco­nomic and sci­en­tific co­op­er­a­tion.

The Chi­nese lan­guage is taught at five sec­ondary schools of Be­larus. In the aca­demic year of 2010-2011, 260 school stu­dents stud­ied Chi­nese as a manda­tory dis­ci­pline; an­other 90 chose it as an op­tional dis­ci­pline.

I would like to note that ev­ery year Be­laru­sian uni­ver­si­ties take part in ma­jor in­ter­na­tional ed­u­ca­tion exhibitions in China. A joint ex­po­si­tion of Be­laru­sian uni­ver­si­ties was pre­sented at China Ed­u­ca­tion Expo 2010 in Shang­hai. Be­laru­sian del­e­ga­tions also par­tic­i­pated in in­ter­na­tional ed­u­ca­tion exhibitions in Bei­jing, Tian­jin and Shi­ji­azhuang.

In Oc­to­ber-novem­ber last year 25 rec­tors of Chi­nese uni­ver­si­ties were on a visit to Be­larus. The trip was stip­u­lated in the co­op­er­a­tion agree­ment on pro­fes­sional train­ing, ad­vanced train­ing, in­tern­ship, re­train­ing and ex­change of spe­cial­ists signed by the Ed­u­ca­tion Min­istry of Be­larus and the State Ad­min­is­tra­tion of For­eign Ex­perts Af­fairs of China.

The two coun­tries are forg­ing new ties, ar­rang­ing vis­its of youth or­ga­ni­za­tions, unions of women, peace funds, and jour­nal­ists. We are ex­pand­ing co­op­er­a­tion in health­care and cul­ture. For ex­am­ple, the Days of Be­laru­sian Cul­ture in China and the Days of Chi­nese Cul­ture in Be­larus are held on a reg­u­lar ba­sis.

By the way, the Days of Chi­nese Cul­ture have just con­cluded…

The strik­ing cul­tural tra­di­tions of China were show­cased dur­ing the Days of Chi­nese Cul­ture on 25 Septem­ber–2 Oc­to­ber. The event was in­au­gu­rated at the big stage of the Be­laru­sian State Phil­har­monic where tra­di­tional Chi­nese mu­sic was per­formed. The Chi­nese or­ches­tra that gave the con­cert is well known all over China and be­yond. The con­cert was also staged at Grodno Mu­sic Col­lege.

The songs and dances of In­ner Mon­go­lia and a show by Chi­nese cir­cus artists were per­formed at the Minsk State Lin­guis­tic Univer­sity. As is known, this re­gion of China has pre­served the an­cient tra­di­tions of eth­nic Mon­gols.

Be­sides mu­si­cians and dancers, Minsk also wel­comed Chi­nese artists who pre­sented their works dur­ing the Days of Chi­nese Cul­ture. The ex­po­si­tion “Ce­ram­ics and porce­lain from China” opened at the National Art Mu­seum of Be­larus, while an ex­hi­bi­tion “Modern fiber art of China” was held at the National His­tory Mu­seum.

The Days of Chi­nese Cul­ture were ar­ranged fol­low­ing the Days of Be­laru­sian Cul­ture that were a big suc­cess in China in Oc­to­ber 2010.

This year Be­larus wel­comed Wu Bang­guo, Chair­man of the NPC Stand­ing Com­mit­tee. That was no doubt a big event giv­ing a new im­pe­tus to the Be­laru­sian-chi­nese co­op­er­a­tion. What are the main re­sults of the visit?

The visit was very fruit­ful. I would like to em­pha­size that the visit of such a high-level of­fi­cial is very im­por­tant for our coun­try and ac­tu­ally re­flects the state of re­la­tions be­tween the two coun­tries. In­deed, the NPC Stand­ing Com­mit­tee Chair­man is of­fi­cially num­ber two in the lead­er­ship struc­ture in China.

Mr Wu Bang­guo was ac­com­pa­nied by a big del­e­ga­tion of 150 peo­ple: heads of min­istries and agen­cies, ma­jor cor­po­ra­tions, banks of China.

The cen­tral point of the Minsk visit was the talks with Pres­i­dent of Be­larus Alexan­der Lukashenko, dur­ing which the par­ties con­firmed their in­ter­est in fur­ther strength­en­ing and ex­pan­sion of com­pre­hen­sive co­op­er­a­tion. The Pres­i­dent ex­pressed grat­i­tude to China for pro­vid­ing ad­vice on the ways to sta­bi­lize the macroe­co­nomic sit­u­a­tion in the coun­try. There was a very trusted and com­pre­hen­sive ex­change of views on a wide range of in­ter­na­tional prob­lems and vir­tu­ally on all is­sues of bi­lat­eral co­op­er­a­tion.

Mr Wu Bang­guo also met with Prime Min­is­ter Mikhail Myas­nikovich, Speak­ers of the Coun­cil of the Repub­lic and the House of Rep­re­sen­ta­tives Ana­toly Ru­bi­nov and Vladimir An­dre­ichenko.

Dur­ing the ne­go­ti­a­tions the Chair­man of the NPC Stand­ing Com­mit­tee said that the Chi­nese govern­ment de­cided to pro­vide Be­larus with a soft loan of $1 bil­lion to im­ple­ment the joint projects, and CNY70 mil­lion as a gra­tu­itous grant.

Mr Wu Bang­guo also par­tic­i­pated in a foun­da­tion stone cer­e­mony to mark the of­fi­cial start of the con­struc­tion of the Peking Ho­tel in Minsk. This com­plex will not only be­come one of the city land­marks but will also give a clear pic­ture of China’s achieve­ments in ar­chi­tec­ture and con­struc­tion.

An­other im­por­tant event took place in the field of ed­u­ca­tion. The headof then­pc­stand­ing­com­mit­tee at­tended the open­ing cer­e­mony for the Con­fu­cius In­sti­tute at the Minsk State Lin­guis­tic Univer­sity.

Although the visit was held within the frame­work of in­ter-par­lia­men­tary co­op­er­a­tion, the sides signed a num­ber of im­por­tant doc­u­ments on in­vest­ment co­op­er­a­tion. Among them was a frame­work agree­ment on fi­nan­cial co­op­er­a­tion in pri­va­ti­za­tion and rais­ing Chi­nese in­vest­ment be­tween the Govern­ment of Be­larus and China Exim Bank, a credit agree­ment to fi­nance the con­struc­tion of the Vitebsk hy­dro­elec­tric power plant on the Western Dv­ina. The Be­laru­sian govern­ment and China De­vel­op­ment Bank also con­cluded a frame­work agree­ment on fi­nanc­ing the in­vest­ment project “Tech­ni­cal up­grade of the Do­brush Pa­per Mill sub­sidiary “Geroi Truda”.

The par­ties signed an agree­ment on fi­nanc­ing the in­vest­ment project “Con­struc­tion of a plant to pro­duce soda ash in Mozyr District, Gomel Oblast.” The State De­fense In­dus­tries Com­mit­tee of Be­larus

and China Great Wall In­dus­try Cor­po­ra­tion (CGWIC) signed a con­tract to cre­ate a national sys­tem of satel­lite com­mu­ni­ca­tion and broad­cast­ing in our coun­try.

But the main doc­u­ment that was con­cluded by the gov­ern­ments of the two coun­tries was the agree­ment on the es­tab­lish­ment of the China-be­larus In­dus­trial Park. Mr Tozik, please tell us more about this project...

I will start with its back­ground. The Pres­i­dent of Be­larus sug­gested cre­at­ing such a park a few years ago. Dur­ing the visit of the Be­laru­sian head of state to China, the Econ­omy Min­istry of Be­larus and the Chi­nese cor­po­ra­tion CAMCE signed a mem­o­ran­dum to es­tab­lish the park on 11 Oc­to­ber 2010.

Al­ready in Jan­uary 2011, the par­ties worked out a sched­ule, de­fined the main ac­tiv­i­ties, the tim­ing of their ex­e­cu­tion, and ap­pointed those re­spon­si­ble on both sides. In May this year Econ­omy Min­is­ter of Be­larus Niko­lai Snopkov went on a visit to China, dur­ing which he met with Min­is­ter of Com­merce Chen Dem­ing and ex­ec­u­tives of Si­no­max Cor­po­ra­tion (CAMCE makes part of it ) to dis­cuss the project.

In June, the Pres­i­dent of the Repub­lic of Be­larus sent a let­ter to the Chair­man of the PRC, reaf­firm­ing his sup­port for this large joint project.

An in­ter­gov­ern­men­tal agree­ment on the es­tab­lish­ment of the China-be­larus In­dus­trial Park was signed dur­ing the visit of Mr Wu Bang­guo to Minsk. Ac­cord­ing to it, Be­larus will al­lo­cate an area of 80.48 square kilo­me­ters in Smole­vichi District, Minsk Oblast, to ac­com­mo­date the park. The ex­e­cut­ing agency on the Be­laru­sian side is the Hor­i­zont hold­ing com­pany, which al­ready agreed with CAMCE on set­ting up a joint man­age­ment com­pany re­spon­si­ble for de­vel­op­ing and man­ag­ing of the park.

I em­pha­size that a spe­cial pref­er­en­tial treat­ment will be of­fered to the res­i­dent com­pa­nies of the park. It will ap­ply not only to Chi­nese pro­duc­ers but also to other lead­ing in­ter­na­tional com­pa­nies from South-east Asia, Europe and Amer­ica. We would like to see, first of all, high-tech­nol­ogy com­pa­nies in Be­larus. This will en­hance the in­no­va­tive com­po­nent of the Be­laru­sian econ­omy. In Be­larus, they will have a strong plat­form to pro­mote their prod­ucts to the 170 mil­lion strong mar­ket of the Cus­toms Union du­tyfree, and can sig­nif­i­cantly re­duce the time and trans­porta­tion costs when en­ter­ing the EU mar­ket.

In con­clu­sion, I would like to say: we need China and China needs us. We are equal part­ners though we are very dif­fer­ent. Co­op­er­a­tion is ab­so­lutely mu­tu­ally ben­e­fi­cial, which al­lows us, with con­fi­dence and op­ti­mism, to con­tinue build­ing re­la­tions with this great coun­try.

Be­larus and China signed an in­vest­ment project

to build the Le­byazhy

res­i­den­tial neigh­bor­hood

in Minsk. Thirty-three homes will be built

ac­cord­ing to Chi­nese stan­dards and

tech­nolo­gies

A 1.5MW wind mill made by the Chi­nese HEAG com­pany has been in­stalled in the vil­lage of Grab­niki, Novo­gru­dok District. The mill is out­fit­ted with an ad­vanced se­cu­rity sys­tem, in­clud­ing light­ning pro­tec­tion

In Septem­ber 2011 Ms Xu Lin, Di­rec­tor-gen­eral

of the Of­fice of Chi­nese Lan­guage Coun­cil In­ter­na­tional

and Gen­eral Di­rec­tor of the Con­fu­cius In­sti­tutes Head­quar­ters,

vis­ited the Con­fu­cius In­sti­tute at the Be­laru­sian State Univer­sity

which opened in Minsk in 2007

A foun­da­tion stone cer­e­mony to mark the start of the con­struc­tion of the five-star Peking Ho­tel was held in Minsk. The cer­e­mony was at­tended by a Chi­nese par­lia­men­tary del­e­ga­tion headed by Chair­man of the NPC Stand­ing Com­mit­tee Wu Bang­guo

The sec­ond unit of Minsk CHP Plant

No. 5 will come on stream by the

end of 2011. The in­vest­ment

project worth 260 mil­lion has been fi­nanced by China De­vel­op­ment

Bank

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