Silk Road of Co­op­er­a­tion

China is one of the most im­por­tant trad­ing and eco­nomic part­ners of Be­larus

Economy of Belarus - - FRONT PAGE -

Be­larus and China share more than 20 years of co­op­er­a­tion and friendly re­la­tions. The two coun­tries ap­ply com­mon prin­ci­ples in their do­mes­tic and for­eign pol­icy and have been ex­tend­ing their eco­nomic and hu­man­i­tar­ian ties in all di­rec­tions. The main doc­u­ment co­or­di­nat­ing the in­ter­ac­tion be­tween the two coun­tries is the pro­gram on all-round strate­gic co­op­er­a­tion till 2018. A state visit of China Pres­i­dent Xi Jin­ping to Minsk in May 2015 gave a new im­pe­tus to the Be­larus-China co­op­er­a­tion. The fact that the head of one of the world’s pow­er­ful na­tions per­son­ally came to visit Be­larus was deemed as epochal by many ex­perts, es­pe­cially since an im­pres­sive num­ber of long-term agree­ments and doc­u­ments were signed.

All-Round Co­op­er­a­tion

The diplo­matic re­la­tions be­tween the Re­pub­lic of Be­larus and the Peo­ple’s Re­pub­lic of China were es­tab­lished on 20 Jan­uary 1992. This very year saw the PRC em­bassy open in Minsk and in 1993 Be­laru­sian diplo­mats started their mis­sion in Bei­jing. The Be­laru­sian-Chi­nese bi­lat­eral re­la­tions reached a new sum­mit in July 2013 af­ter a visit of Be­larus Pres­i­dent Alexan­der Lukashenko to Bei­jing at the in­vi­ta­tion of China Pres­i­dent Xi Jin­ping. Dur­ing the visit the two lead­ers signed a joint dec­la­ra­tion on all-round strate­gic part­ner­ship. As early as the next year a pro­gram of all-round strate­gic part­ner­ship de­vel­op­ment for 2014-2018 was adopted. Be­sides, an agree­ment on set­ting up a brand-new co­or­di­na­tion mech­a­nism – a bi­lat­eral co­op­er­a­tion com­mit­tee at the level of vice-pre­miers – was signed.

Since the diplo­matic re­la­tions were es­tab­lished, the bi­lat­eral trade has soared more than 100 times. In 2013, China ranked third among non- CIS trad­ing part­ners of Be­larus, ninth in ex­port from Be­larus and sec­ond in im­port to Be­larus. The bi­lat­eral trade in goods and ser­vices in 2014 (in­clud­ing Hong Kong, Ma­cao and Tai­wan) made up $4.18 bil­lion with the Be­laru­sian ex­port ex­ceed­ing $1 bil­lion for the first time. In re­cent years Be­larus’ ma­jor ex­ports to China have been potash fer­til­iz­ers, capro­lac­tam, dump trucks and their com­po­nents, mi­crochips, mi­cro assem­bly, chem­i­cal prod­ucts. Among the main im­ports from China are equip­ment, com­po­nents and ma­te­ri­als for ex­port-ori­ented en­ter­prises in Be­larus, as well as con­sumer goods.

The two coun­tries have been suc­cess­fully ab­sorb­ing di­rect in­vest­ments by cre­at­ing joint com­pa­nies such as Midea-Hor­i­zont, a pro­ducer of house­hold ap­pli­ances, and Volat-San­jiang, a pro­ducer of off-road ve­hi­cles lo­cated in Be­larus; San­jiang-Volat Spe­cial Ve­hi­cle Co, Avic-BelAZ Min­ing Equip­ment Com­pany, Harbin Dongjin-Gomel Agri­cul­tural Ma­chine Co, and a joint ven­ture for as­sem­bling pow­er­ful Be­larus trac­tors in China. Minsk has about 50 com­pa­nies with Chi­nese cap­i­tal.

Dozens of im­por­tant eco­nomic projects are be­ing im­ple­mented in Be­larus with the credit sup­port of Chi­nese banks in such fields as power en­gi­neer­ing, man­u­fac­tur­ing, trans­port in­fra­struc­ture, real es­tate, telecom­mu­ni­ca­tions and oth­ers. In 2008-2013, Ex­port-Im­port Bank of China and China De­vel­op­ment Bank opened $14 bil­lion credit lines for Be­larus and of­fered two gov­ern­men­tal con­ces­sional loans for $1 bil­lion each. Among the key long-term projects is the Silk Road Eco­nomic Belt pro­ject, con­struc­tion of the Chi­nese-Be­laru­sian In­dus­trial Park Great Stone, and the pro­duc­tion of Geely cars.

The Silk Road Eco­nomic Belt is a pro­ject on set­ting up a trans­porta­tion, energy and com­mer­cial cor­ri­dor be­tween Euro­pean coun­tries and those of Cen­tral and South Asia. China in­tends to al­lo­cate $40 bil­lion via a spe­cial fund. Pres­i­dent Xi Jin­ping voiced the idea of set­ting up the eco­nomic belt in Septem­ber 2013. The Econ­omy Min­istry of Be­larus and the Min­istry of Com­merce of China signed a mem­o­ran­dum of co­op­er­a­tion on the Silk Road Eco­nomic Belt pro­ject in 2014. Be­ing prac­ti­cally a link be­tween the Euro­pean Union and the Eurasian Eco­nomic Union, Be­larus can be­come a key hub of this pro­ject. To do so Be­larus in­tends to ac­tively de­velop transcon­ti­nen­tal trans­port cor­ri­dors and im­prove lo­gis­tic in­fra­struc­ture on its ter­ri­tory with the help of Chi­nese com­pa­nies. It

will also in­crease the uti­liza­tion of rail­way freight­lin­ers go­ing from Europe to China, boost the use of the Be­laru­sian air­ports, and op­ti­mize cargo de­liv­ery sys­tems. In turn, China is ready to of­fer Be­larus its lo­gis­tic ser­vices in Lianyun­gang sea­ports.

The In­dus­trial Park Great Stone in Smole­vichi Dis­trict, the largest pro­ject in the history of the bi­lat­eral re­la­tions, will have an im­por­tant place in the Silk Road Eco­nomic Belt. The foun­da­tion stone lay­ing cer­e­mony was held on 19 June 2014. Ac­cord­ing to the de­vel­op­ment con­cept, the park will of­fer com­fort­able busi­ness in­fra­struc­ture, sig­nif­i­cant long-term tax breaks for the pro­ject par­tic­i­pants, and a full pack­age of ser­vices for the park res­i­dents. Among the pri­or­ity ar­eas are the de­vel­op­ment of fine chem­i­cals, bio­med­i­cine, elec­tron­ics in­dus­try, me­chan­i­cal en­gi­neer­ing, new ma­te­ri­als. The first res­i­dents have al­ready been reg­is­tered. Among them are such ma­jor Chi­nese cor­po­ra­tions as Huawei

and ZTE. There are plans to set up man­u­fac­tur­ing and residential zones in the park, of­fice premises, trade and en­ter­tain­ment ones, a fi­nan­cial cen­ter and an R&D cen­ter. In fact, this will be an in­ter­na­tional eco-smart city. China runs many sim­i­lar projects, but the park in Be­larus will be the largest in terms of the ter­ri­tory.

Pas­sen­ger car pro­duc­tion in Be­larus with the par­tic­i­pa­tion of the Chi­nese com­pany Geely is another ex­am­ple of mu­tu­ally ben­e­fi­cial co­op­er­a­tion. The Be­laru­sianChi­nese en­ter­prise BelGee (the founders are OAO BelAZ – 50% of the shares, the Chi­nese com­pany Geely – 32.5%, and the joint Be­laru­sianChi­nese automotive man­u­fac­tur­ing en­ter­prise Soyuza­v­totehnologii) was es­tab­lished in De­cem­ber 2011 and reg­is­tered in the Free Eco­nomic Zone Minsk. The first Geely cars rolled off the pro­duc­tion line in Fe­bru­ary 2013 and went on sale in March. To­day, the an­nual pro­duc­tion ca­pac­ity of the BelGee com­pany is 10,000 cars. The sec­ond phase of the pro­ject in­volves the con­struc­tion of the Geely car assem­bly plant with the out­put ca­pac­ity of 120,000 by 1 July 2019.

The le­gal frame­work of the Be­larus-China bi­lat­eral re­la­tions is well de­vel­oped and cov­ers a wide range of ar­eas, in­clud­ing diplo­matic re­la­tions, trade and eco­nomic co­op­er­a­tion, avoid­ance of dou­ble tax­a­tion, in­vest­ment pro­tec­tion, co­op­er­a­tion in science and tech­nol­ogy, arts and cul­ture, ed­u­ca­tion, tourism, air trans­port, health, mil­i­tary and tech­ni­cal co­op­er­a­tion, the pro­vi­sion of le­gal as­sis­tance in civil and crim­i­nal mat­ters, pro­tec­tion of in­tel­lec­tual prop­erty rights, visa-free travel, lend­ing and gra­tu­itous aid.

Thus, the co­op­er­a­tion be­tween the two states is re­ally com­pre­hen­sive, filled with real projects and promis­ing ideas. Po­lit­i­cal, trade and eco­nomic re­la­tions of Be­larus and China are de­vel­op­ing dy­nam­i­cally, pri­mar­ily due to the sim­i­lar prin­ci­ples in do­mes­tic and for­eign poli­cies, sim­i­lar views on ma­jor is­sues of in­ter­na­tional re­la­tions. The par­ties regularly ex­change vis­its at the high­est and high lev­els, are en­gaged in an ac­tive in­ter-par­lia­men­tary di­a­logue, dy­nam­i­cally de­velop in­ter­a­gency con­tacts.

New Era

The visit of the Chi­nese del­e­ga­tion in May 2015 be­came the first visit by a Chi­nese pres­i­dent to Be­larus over the past 14 years and her­alded the be­gin­ning of the new era in the co­op­er­a­tion be­tween the two states. The three-day stay of the Chi­nese leader in Be­larus turned out very event­ful and suc­cess­ful. Af­ter the wel­com­ing cer­e­mony at the Palace of In­de­pen­dence Be­larus leader Alexan­der Lukashenko and Chi­nese Pres­i­dent Xi Jin­ping held talks and signed a num­ber of doc­u­ments. The lead­ers also took part in the Be­laru­sian-Chi­nese In­ter­re­gional Busi­ness Fo­rum and a cer­e­mony of pre­sent­ing the reg­is­tra­tion cer­tifi­cates to the first res­i­dents of the Chi­nese-Be­laru­sian In­dus­trial Park Great Stone, vis­ited the Be­laru­sian State Mu­seum of History of the Great Pa­tri­otic War.

The visit of China’s Pres­i­dent re­sulted in a record high num­ber of agree­ments and mem­o­ran­dums. The heads of state signed the Treaty of Friend­ship and Co­op­er­a­tion be­tween Be­larus and China, and also adopted a joint dec­la­ra­tion on fur­ther de­vel­op­ment of the re­la­tions of all-round strate­gic part­ner­ship. The par­ties agreed to pro­mote, on the ba­sis of mu­tual ben­e­fit, the es­tab­lish­ment of the Silk Road Eco­nomic Belt and to ex­pand co­op­er­a­tion in trade, eco­nomic, fi­nan­cial, in­vest­ment, science and tech­nol­ogy, energy, space, trans­port, IT, agri­cul­ture, hu­man­i­tar­ian and other ar­eas.

In par­tic­u­lar, the two states an­nounced the in­ten­tion to pro­mote pay­ments in na­tional cur­ren­cies in the bi­lat­eral trade. A prac­ti­cal step in this re­gard was a cur­rency swap agree­ment val­ued at Br16 tril­lion and RMB7 bil­lion signed by the Na­tional Bank of Be­larus and the Peo­ple’s Bank of China.

The two coun­tries signed dozens of agree­ments and mem­o­ran­dums to boost co­op­er­a­tion in econ­omy, trade, science, ed­u­ca­tion and cul­ture, the de­fense in­dus­try, and im­ple­ment joint projects. Ex­perts es­ti­mate the agree­ment port­fo­lio fol­low­ing

China Pres­i­dent Xi Jin­ping’s visit to Be­larus at $18 bil­lion at least.

Be­laru­sian Potash Com­pany and Sinochem Group signed a five-year mem­o­ran­dum of co­op­er­a­tion for 2015-2019. The doc­u­ment en­vis­ages the sales of 4 mil­lion tonnes of Be­laru­sian potash fer­til­iz­ers to China at the to­tal cost of nearly $1.4 bil­lion in cur­rent prices. The con­tract will help Be­larus main­tain its lead­ing po­si­tion in the sales of potash fer­til­iz­ers on the Chi­nese mar­ket.

New prospects for Be­larus come with a mem­o­ran­dum of co­op­er­a­tion that was signed be­tween the Fi­nance Min­istry of Be­larus and China’s lead­ing in­de­pen­dent rat­ing agency Dagong. The doc­u­ment aims to build up Be­larus’ na­tional rat­ing in­dus­try, pro­vide an in­de­pen­dent ob­jec­tive as­sess­ment of the credit sta­tus of Be­laru­sian com­pa­nies and joint Be­laru­sian-Chi­nese projects. The doc­u­ment also cre­ates op­por­tu­ni­ties for Be­larus to ac­cess the fi­nan­cial mar­kets of China and the spe­cial ad­min­is­tra­tive dis­trict of Hong Kong.

The pack­age of agree­ments tra­di­tion­ally com­prised a big num­ber of loan ar­range­ments. The par­ties agreed on two loans for Be­larus: $3 bil­lion in con­ces­sional lend­ing and $4 bil­lion as a com­mer­cial loan, as well as a grant – tech­ni­cal as­sis­tance in the amount of RMB800 mil­lion for three years. Tech­ni­cal as­sis­tance will be used to fi­nance so­cial projects, in­clud­ing the con­struc­tion of new homes. Loans will help Be­larus de­velop in­fra­struc­ture and im­ple­ment projects of small and medium-sized busi­ness.

A mem­o­ran­dum of un­der­stand­ing con­cluded by the Be­laru­sian Fi­nance Min­istry, China De­vel­op­ment Bank, Be­larus­bank, and Slavkaliy can be cited as another great ex­am­ple of co­op­er­a­tion be­tween the coun­tries. In line with the doc­u­ment Be­larus­bank will bor­row up to $1.4 bil­lion. The money will be spent on build­ing a new min­ing and pro­cess­ing fac­tory. The fac­tory will use raw ma­te­ri­als of the Nezhin­skoye sec­tion of the Starobin potash salts de­posit. The money will be bor­rowed against guar­an­tees of the Be­larus gov­ern­ment.

The Be­larus gov­ern­ment also acted as the guar­an­tor for al­lo­cat­ing a to­tal of $1 bil­lion in two 15-year-long credit lines to im­ple­ment projects in the trans­port in­dus­try, power en­gi­neer­ing, pro­duc­tion sec­tor, in­fra­struc­ture, and the small and medium busi­ness sec­tor of Be­larus. The rel­e­vant agree­ment was reached by China De­vel­op­ment Bank, Be­larus­bank, and the De­vel­op­ment Bank of the Re­pub­lic of Be­larus.

The Be­laru­sian Rail­ways and the Ex­port-Im­port Bank of China signed three 12-15–year loan agree­ments to the tune of more than $175 mil­lion to de­velop the Be­laru­sian rail sys­tem. Apart from that, the par­ties con­cluded a frame­work agree­ment to step up co­op­er­a­tion in the im­ple­men­ta­tion of the Silk Road Eco­nomic Belt pro­ject. The agree­ment en­vis­ages as­sis­tance to long-term com­pre­hen­sive co­op­er­a­tion in the de­vel­op­ment of the Be­laru­sian rail­way in­fra­struc­ture. Chi­nese loans of up to $500 mil­lion will be raised to im­ple­ment the rel­e­vant in­vest­ment projects. Loans will be pro­vided against guar­an­tees of the Be­larus gov­ern­ment.

“The Chi­nese-Be­laru­sian re­la­tions are cur­rently at an im­por­tant stage of de­vel­op­ment. I hope that my visit will add a new im­pe­tus to the fur­ther de­vel­op­ment of bi­lat­eral re­la­tions. Tak­ing into ac­count the re­sults of the fruit­ful talks with Pres­i­dent Alexan­der Lukashenko I can make a con­clu­sion that the ex­pected re­sults of the visit have been fully achieved. The states will co­op­er­ate on the ba­sis of mu­tual re­spect and equal­ity, and will sup­port each other on the is­sues of mu­tual in­ter­est,” the Chi­nese leader said dur­ing his visit to Minsk.

Re­gions in the Fo­cus

Re­gional co­op­er­a­tion has an un­tapped po­ten­tial for fur­ther de­vel­op­ment of Be­larus-China ties. The Be­laru­sian-Chi­nese Busi­ness Fo­rum that took place dur­ing Xi Jin­ping’s visit to Minsk tes­ti­fies to the fact. At­tend­ing the fo­rum were the two heads of state. The fo­rum gath­ered about 450 peo­ple, in­clud­ing 300 rep­re­sen­ta­tives of China. The ple­nary meet­ing held un­der the motto “New Plat­forms, New Op­por­tu­ni­ties”

in­cluded a pre­sen­ta­tion of the Chi­nese-Be­laru­sian In­dus­trial Park Great Stone pro­ject, speeches by rep­re­sen­ta­tives of the ad­min­is­tra­tions of Chi­nese cities and prov­inces, Be­laru­sian re­gions.

The busi­ness fo­rum re­sulted in the sign­ing of 25 agree­ments, the es­tab­lish­ment of new busi­ness con­tacts and the demon­stra­tion of the mu­tual eco­nomic and scitech po­ten­tial. A mem­o­ran­dum of co­op­er­a­tion was signed be­tween the ad­min­is­tra­tions of Minsk and Bei­jing. The par­ties agreed to strengthen co­op­er­a­tion in science, high tech­nol­ogy, ed­u­ca­tion, cul­ture, tourism, con­struc­tion and other ar­eas. Minsk City Hall in­vited Chi­nese part­ners to take part in the “smart city” pro­ject. It is ex­pected that Minsk and Bei­jing will con­clude a town-twin­ning agree­ment soon.

The doc­u­ments signed at the fo­rum also in­cluded the friend­ship and co­op­er­a­tion agree­ment be­tween Gomel and Harbin, the es­tab­lish­ment of twin town re­la­tions be­tween Grodno and Lun­nan (Gansu Province), Polotsk and Mu­dan­jiang, Brest Oblast and Hubei Province.

A num­ber of agree­ments were signed be­tween en­ter­prises from var­i­ous re­gions of the two coun­tries. For ex­am­ple, dur­ing the busi­ness fo­rum the Chi­nese com­pany Zong­shen signed agree­ments with OAO MTZ and OAO Gom­sel­mash on set­ting up joint ven­tures with Chi­nese and for­eign cap­i­tal. The Be­laru­sian hold­ing com­pany Amkodor and China Na­tional Cor­po­ra­tion for Over­seas Eco­nomic Co­op­er­a­tion signed an agree­ment on co­op­er­a­tion in the de­vel­op­ment of ma­chine-build­ing in­dus­try, petro­chem­i­cal in­dus­try, agri­cul­ture and civil en­gi­neer­ing in Be­larus. An agree­ment on ex­pand­ing strate­gic co­op­er­a­tion and set­ting up a new man­u­fac­tur­ing en­ter­prise was signed be­tween the Be­laru­sian hold­ing com­pany Hor­i­zont and Midea Cor­po­ra­tion.

Alexan­der Lukashenko em­pha­sized that such a large-scale in­ter­re­gional busi­ness fo­rum of Be­larus and China tes­ti­fies to the new level of bi­lat­eral re­la­tions based on all-round strate­gic part­ner­ship. Di­rect ties be­tween Be­laru­sian and Chi­nese re­gions and en­ter­prises should be a driv­ing

force of in­ter-per­sonal and busi­ness co­op­er­a­tion be­tween the coun­tries, the Be­laru­sian leader is con­vinced. Be­larus has cre­ated very good con­di­tions for in­vest­ment. Be­sides, by open­ing man­u­fac­tur­ing fa­cil­i­ties in Be­larus the Chi­nese busi­ness will be able to use free ac­cess to the mar­ket of the Eurasian Eco­nomic Union.

“Frankly speak­ing, the Peo­ple’s Re­pub­lic of China can ad­vance to the big Eurasian union with­out Be­larus’ help. But, if we talk about the co­op­er­a­tion with the Euro­pean Union, and it is China’s im­por­tant trad­ing part­ner, such a hub would be very use­ful for the coun­try. Be­larus can be­come this kind of a hub,” Alexan­der Lukashenko said.

The Pres­i­dent of the Peo­ple’s Re­pub­lic of China, in turn, noted that Be­larus has unique ad­van­tages for the de­vel­op­ment of the Silk Road Eco­nomic Belt as the coun­try is lo­cated in the cen­ter of Europe and on the new Silk Road route. Xi Jin­ping called for the Chi­nese busi­ness­men to use the op­por­tu­nity and study the co­op­er­a­tion prospects with Be­laru­sian part­ners. He ex­pressed con­fi­dence that ac­tive re­gional par­tic­i­pa­tion will raise the Be­laru­sian-Chi­nese re­la­tions to a higher level.

A To­ken of Friend­ship

Ex­perts be­lieve that the state visit of the leader of such a su­per­power as China to Be­larus is an ex­plicit sig­nal to the Chi­nese author­i­ties and busi­ness that Be­larus is a close part­ner who gets a broader ac­cess to the mar­ket of the Peo­ple’s Re­pub­lic of China and en­joys other op­por­tu­ni­ties and ben­e­fits in trade and econ­omy. The mat­ter is not only about new jobs but also the in­flow of in­vest­ments to Be­larus and pop­u­lar­iza­tion of Be­laru­sian goods in China.

A pack­age of agree­ments signed by the two coun­tries in May will be a driv­ing force for bol­ster­ing part­ner­ship in var­i­ous fields, first of all, in civil en­gi­neer­ing and mod­ern­iza­tion of the in­fra­struc­ture, in­ter­bank co­op­er­a­tion, tech­ni­cal and eco­nomic lend­ing and

in­vest­ment co­op­er­a­tion. The sides are plan­ning to ex­change tech­nolo­gies and raise the share of sci-tech in­no­va­tions, cre­ate the le­gal con­di­tions for ex­change pro­grams in tourism, ed­u­ca­tion and cul­ture, en­hance mil­i­tary-tech­ni­cal ties. Plans have been made to dou­ble the bi­lat­eral trade and op­ti­mize its struc­ture: the Chi­nese side is go­ing to ex­pand the im­port of high­qual­ity and com­pet­i­tive Be­laru­sian prod­ucts.

It is im­por­tant that the coun­tries are grad­u­ally switch­ing from credit co­op­er­a­tion to in­vest­ment one. In fact, Be­larus is be­com­ing a fer­tile ground where Chi­nese busi­ness­men can make deals and set up ven­tures which will pro­mote their prod­ucts to the EEU mem­ber states and the EU. Our coun­try, in turn, will raise the in­flow of long-term in­vest­ments.

On the whole, Be­larus’ strate­gic ge­o­graph­i­cal po­si­tion in the Silk Road Eco­nomic Belt is a boon to our econ­omy. As a re­sult, our coun­try will en­joy di­rect and in­di­rect ben­e­fits. If ev­ery­thing pans out and our coun­try be­comes part of im­por­tant transit routes, then the do­mes­tic hos­pi­tal­ity busi­ness, road­side ser­vices, lo­gis­tics, trans­port, com­mu­ni­ca­tions and the en­tire ser­vices sec­tor will get a big boost for growth. Nowa­days these are the strate­gic sec­tors shap­ing Be­larus’ gross prod­uct.

China re­mains a good, close and re­li­able friend, a promis­ing part­ner of Be­larus, Be­larus Pres­i­dent Alexan­der Lukashenko said af­ter the talks with Pres­i­dent of the Peo­ple’s Re­pub­lic of China Xi Jin­ping. The de­vel­op­ment of the com­pre­hen­sive strate­gic part­ner­ship be­tween Be­larus and China is based on the prin­ci­ples of mu­tual re­spect, sup­port and mul­ti­fac­eted co­op­er­a­tion. High-level con­tacts and sin­cer­ity of in­ten­tions shape the long-term pol­icy of the joint de­vel­op­ment of Be­larus and China.

“We have only one goal, which is to im­prove the well-be­ing of our peo­ple. We do not build our re­la­tions and our friend­ship against any­one or with an aim to harm any­one. Ev­i­dence of this is the Silk Road con­cept which will give a strong im­pe­tus to the de­vel­op­ment of all states in­volved, to their economies. Con­se­quently the well-be­ing of peo­ple in those states will be im­prov­ing,” the Be­laru­sian leader em­pha­sized.

Newspapers in English

Newspapers from Belarus

© PressReader. All rights reserved.