Distance is no obstacle

[b]Anatoly Tozik, the Deputy Prime Minister of the Republic of Belarus and the Co-chairman of the Belarusian-Chinese Commission for Trade and Economic Cooperation[/b]In January, we celebrate the 20th anniversary of diplomatic relations between the Republic of Belarus and the People’s Republic of China. Recognition by such a great power as China was vital for a state newly on the world map. The deep and diverse co-operation of our countries has supported our independence and sovereignty, since economic success is the best way to provide a dignified life for citizens, and earn a worthy reputation. Today, we analyse Belarusian and China relations with Anatoly Tozik, the Deputy Prime Minster of the Republic of Belarus and the Co-chairman of the Belarusian-Chinese Commission for Trade and Economic Cooperation.
Anatoly Tozik, the Deputy Prime Minister of the Republic of Belarus and the Co-chairman of the Belarusian-Chinese Commission for Trade and Economic Cooperation

In January, we celebrate the 20th anniversary of diplomatic relations between the Republic of Belarus and the People’s Republic of China. Recognition by such a great power as China was vital for a state newly on the world map.
The deep and diverse co-operation of our countries has supported our independence and sovereignty, since economic success is the best way to provide a dignified life for citizens, and earn a worthy reputation. Today, we analyse Belarusian and China relations with Anatoly Tozik, the Deputy Prime Minster of the Republic of Belarus and the Co-chairman of the Belarusian-Chinese Commission for Trade and Economic Cooperation.

It has been a long 20 year path for our countries. Anniversaries are a time to summarise results, so what have we really achieved over the past 20 years?
An agreement on diplomatic relations was signed on January 20th, 1992. Parliamentary deputy Alexander Lukashenko was on the official delegation which visited China in 1992. Twenty years have passed, which may seem a short period in a historical context but China has since become the leading nation worldwide economically, due to its dynamic development and potential. Meanwhile, Belarus has developed its statehood from scratch — following the dissolution of the USSR. We may say that our country has established itself as an independent international entity.
Today, both our leaders and those of the Chinese note that our mutual relations may be viewed as ideal. We’ve faced no significant problems over two decades. We respect each other and rely upon one another.
Our leaders signed a declaration establishing a new level of our strategic cooperation in December 2005. You know, there are a few counties in the world which have signed such official documents…

You’ve explained the political sphere. What about other spheres of cooperation?
Of course, we’ve developed all lines of cooperation simultaneously. If, for example, 20 years ago, our trade turnover was $40m, by 2010 it had risen to $2.5bn. This year, I forecast trade turnover of up to $3bn. The new credit and investment level is our most important achievement. We’re now implementing a number of major investment projects, supported by banks and the Chinese Government. We’ve reached another level of mutual cooperation by establishing joint ventures in China and in Belarus, using direct investments over the past one-two years. These are the main achievement of recent years.

You are a Chinese expert in the Government, so obviously know China well and served as an ambassador to China for a few years. Can you tell us how China’s combination of ideology and market-oriented economics differs from that once used by the USSR? What does the famous ‘Chinese model’ include?
I’m lucky to have had the opportunity to live and work in China for five years, representing the interests of our country. As to why China has achieved a level of success beyond that of the USSR, it’s a difficult question. The 20th century was very difficult for China as, even after its revolutionaries’ victory and the establishment of a ‘new’ China, the country faced problems.
It tried to catch up with advanced countries but we know the result of such efforts; there was a ‘great jump’ and ‘cultural revolution’, which brought the collapse of the economy and the political scene. A moral crisis seemed imminent. Fortunately, the country’s leaders had the necessary intellect and determination to understand the situation and take the first steps towards developing the country. Deng Xiaoping was the first of such leaders and is highly honoured by the Chinese. I expect that he will always be an important person in the history of China and to all world civilizations, since the influence of China on the development of the whole planet is growing.
Unfortunately, the Soviet leaders’ minds were less brilliant, while lacking stamina. As a scientist rather than as a politician, I believe that the objective conditions for the preservation and dissolution of the USSR developed in the late 20th century. Subjective factors also played a crucial role. China analysed events in the USSR in the second half of the 1980s very carefully, being influenced accordingly, although Chinese policy was determined earlier. In 2009, China celebrated its 30th anniversary of reform and openness.
Ideology in China differs from ours, although, officially, the Chinese acknowledge Marxism. Their Communist Party has 85 million members. All students study Karl Marx’s concepts at university, through a dialectical rather than doctrinal approach. China filters all ideas via its national concepts. Its current model is socialistic while combining the ideas of Confucius, Buddha and Marx. There is also a good dose of common sense. The latest approach may be summarised by a famous phrase of Deng Xiaoping: ‘do not worry whether the cat is black or white… what matters is that it catches mice’. I wouldn’t be too concerned about how ideology and market-oriented economics are combined. Rather, the Chinese focus on whatever is useful for the country and raises standards of living.
Of course, China has made incredible progress, setting a unique example in the history of the world’s civilisation. Just 30 years ago, China was close to collapse; now, it is a world power. Its GDP is increasing at an average of 9.8 percent annually, and has been doing so for three decades. Chinese economic growth rose 10.2 percent in 2010, while other countries underwent crisis.

[v]It seems that China has no desire to dominate other nations and we never see Chinese diplomats reacting to small provocations, giving advice or making claims over other states…[/b]
On the basis of my observations, I may conclude that Beijing behaves very reasonably in the international arena. China has never set any rigid conditions in our 20 year period of cooperation — including within my direct work in China. The Chinese leadership constantly emphasises at all levels and in its public speeches that the PRC is a developing country, with no pretensions to world domination. I believe that our planet views China as a state able to restore a balanced system — as destroyed in the dissolution of the USSR. China is attempting to halt the chaos threatening the world.

What support does China offer Belarus within the international arena?
Belarus and China provide mutual support. We always agree on the most important events in the international arena and our domestic policies are similar in many ways. Our similar approaches to human rights and democracy are often criticised, so this encourages us to support each other within the UNO and other international organisations. Democracy and human rights cannot be transferred from one country to another mechanically, as each has its own national interests. We view provision of accommodation, a good wage which allows the maintenance of a family, and child safety as being the most important human rights; China shares the same view but many Western countries have a quite different opinion.

Can cooperation with the Peoples Republic of China compensate for Belarus’ troubled relationship with the USA?
Yes, in some way, I think. We desire ‘normal’ relations with Western countries, so the current situation is not our fault. Certainly, we are also eager to strengthen and develop our relations with China. It is a huge country with a diverse economy and enormous market. Meanwhile, it respects our country and understands our policy. Our economies are largely complementary and we can gain access to other markets in the region through China.

Belarus is a small country in comparison to huge China, so how can we establish an equal relationship?
It may sound strange but, despite these differences, Belarus and China have established a completely equal relationship. It is difficult to compare our countries: 10 million residents compared to 1.345 billion — according to the latest statistics. However, our relationship has never been that of an older and younger brother or that of one party giving and the other being dependent. In my own five year term of office as ambassador, I never pleaded for anything. I simply offered projects which were to the benefit of both Minsk and Beijing. We cooperate using the same principles and, as a result, have respect in China.

Why is Beijing interested in Minsk? What do we offer?
Belarus is a European country. Though China implements thousands of projects worldwide, Europe remains wary; it’s no secret. Meanwhile, Belarus is afraid of nothing. Beijing is interested in Belarus as a European country providing a demonstration of modern Chinese technologies and investments. Our cooperation with China is a model to Europe. We can modernise our national economy and establish enterprises producing competitive products. Of course, loans are not granted free of interest; credit lines always benefit the Chinese banking system…
Beijing is making huge investments in other countries. Its main partners are Africa, Latin America and Southeast Asia. Naturally, China is not acting altruistically; such liaisons are beneficial to China — which needs great resources — as well as to its partners. The times have passed of valuable resources being paid for by colonisers with glass toys (as happened 300 years ago).
Today, China is building nuclear and coal power stations, railways, motorways, and factories producing modern products — all outside the country. Our knowledge of China is 20 years behind the times. As an interesting example, people tend to think that China mainly exports basic goods and light industry products. However, statistics show that its machine and technical and chemical industries constitute 85 percent of its exports to Europe. I’m sure you’d agree that Europe doesn’t import poor quality goods. I was surprised by these statistics and especially checked them against official sources.
Chinese manufacturers are responding to demand, satisfying clients’ requirements for price and quality. In the CIS, we tend to hope that a Chinese jeep costing $14-16,000 will rival that costing $80,000; of course, it’s impossible. A Chinese car can rival a jeep costing $35-40,000 though. We need to consider what’s feasible.

It’s thought that China will emerge from the current global economic crisis even stronger than before. The rich European Union is borrowing from the PRC. Is this part of China’s anticrisis plan?
In Chinese, the word crisis consists of two characters: one stands for ‘danger’ and the second for ‘chance’. In my opinion, no other country has used the 2008-2009 crisis to the benefit of its people as China has. From the very beginning, Chinese leaders viewed the situation as a chance to tackle problems unresolved during the pre-crisis period. Beijing has been deeply analysing and forecasting the situation and taking decisions which are both competent and reasonable. We can certainly say that the dollar has kept its value during these difficult times, first and foremost, due to China.
China has the largest gold and foreign exchange reserves today — equal to $3.3 trillion. In 2010, China saw record levels of foreign investments ($105.7bn) and capital investments abroad ($59bn).

Which investment projects implemented in Belarus are the most important and in which fields are Chinese investments most needed?
Together with Chinese companies, we’re implementing about 20 major projects. Some are at the contract or credit agreement stage. The Chinese Government and banks have given $5.5bn in financial support for specific projects, with general credit lines equalling $16bn. This has given us ample reserves.
The creation of a third mobile operator (known as ‘Life’) was the first successfully implemented project and a number have since been implemented in the power industry. The modernised TPP-2 has come into operation in Minsk and the large TPP-5 is almost ready for launch. Power supply units have been installed at Bereza and Lukoml stations and construction of three large concrete enterprises is in its final stage. Testing of equipment at Krasnoselski plant has begun. A second, longer, runway is also planned for the national airport and a cellulose factory is being built in Svetlogorsk (a large import-substitution enterprise). A major cardboard factory is planned for Dobrush, with many smaller scale ventures also in the pipeline.
When Mr. Bangguo, the Chairman of the Standing Committee of the National People`s Congress, visited Minsk, a governmental loan worth $1bn was agreed for specific projects: the launch of a national satellite and construction of a high-voltage power line for an atomic power station. In addition, some funds are being directed towards Minsk’s airport and the reconstruction of the Gomel-Minsk motorway to bring it up to international standards.
Chinese investments would also be useful in the transport sphere. China has already begun delivery of 12 powerful electric industrial locomotives and is electrifying one section of the Belarusian railway. Chinese railways are well ahead of those in Japan and Europe — by as much as ten years. Even the United Kingdom, the land of railways, has signed an agreement to allow China to help modernise its railways. The same agreement was signed by America and Beijing several years ago.
China already boasts about 10,000km of high-speed railways; speeds of 486km were reached during train tests between Beijing and Shanghai and no air cushion was needed: only two rails and the carriage. I’ve never travelled by such a train but I suppose that its operational speed will be somewhat lower. I’ve travelled by Chinese trains at a speed of 340km, which was very pleasant. Stewardesses served food and drinks rather than passenger car attendants.

Could the Chinese organise large-scale production of cars in Belarus?
If we had adequate understanding of the Chinese motor industry we could implement such a project. Unfortunately, even our officials believe that Chinese cars are not good enough. In fact, China leads car production worldwide, with over 18m produced there last year. Even if disadvantages exist, I’m sure they’ll be remedied within five years — to rival those made in Japan or Korea.
I think it would be profitable to construct a joint factory with the Chinese, as we have machine building experience via our heavy engineering industry. It would be greatly beneficial for us to establish an assembly plant, supplying components locally and producing a high quality vehicle. It would surely become a national favourite, due to its production location, and could retail at around $10,000 realistically.
We’re already negotiating with a major Chinese corporation and perhaps could implement the project within a few years.

It is believed that the Chinese are actively collecting the best global technologies. Is it really beneficial for us to share our technologies with the Chinese?
It’s rather archaic to think this way. Firstly, who is preventing us from collecting the world’s best technologies? Secondly, even if we prevent our inventions from being widely used, the world develops so fast that technology becomes obsolete within two years. It’s perhaps better to sell inventions while they have a buyer. We should rid ourselves of this stereotype and see things realistically. We have great scientific research and innovative ideas but lack the resources to apply them to production. China has such resources and the huge market, so our interests concur.
Belarusian universities and scientific centres closely co-operate with Chinese universities and scientific centres. There is a scientific and innovation centre in Harbin and a Belarusian-Chinese innovation centre opened this year at the BSU.

When we talk about Chinese loans, sceptics say that these are tied, requiring us to buy Chinese equipment and to pay for Chinese specialists. Aren’t direct foreign investments more favourable for Belarus?
When any country gives a loan, it naturally wishes to stimulate its own companies and exports. It would be very strange if China gave loans for us to buy German equipment. Of course, we can decide which technologies and equipment we wish to purchase with such loans. If we liaise skilfully with Chinese partners, we can purchase the latest technologies at two thirds of their cost in Europe.
This is favourable both to us and to the Chinese. Naturally, after 5-7 years of working closely, we know each other well enough to have faith in direct investments. We guarantee the safety of such investments and the expatriation of profits.
In recent years, we’ve felt changes occurring. The first sign was the establishment of a joint venture between ‘Horizont’ and ‘Midea Group’, producing household appliances. Microwave oven production has increased, with high quality products proving competitive with other world-known brands. Three joint ventures were established in China between 2009 and 2010: by ‘Gomselmash’, ‘MTW’, and ‘BelAZ.’ A joint venture with ‘MZKT’ — producing chassis for large vehicles (including for the military) has been working successfully for some time.
Of course, direct foreign investments are more favourable and we hope to begin large-scale attraction of such investments once the Belarusian-Chinese industrial park is launched. This major project is being instigated at the initiative of the leaders of our two countries. I have faith in the project and I want everyone to understand that it is to the benefit of both Belarus and China. Together, we’re creating the infrastructure for this park. The project will involve not only Chinese companies but others with modern technologies: from Japan, South Korea, and Europe. Gradually, we’ll see a host of companies keen to develop their manufactures as residents of our industrial park.

Let’s discuss a sensitive question. After the successful visit of Mr. Bangguo to Minsk, the Russian newspapers published jealous articles about Belarusian and Chinese cooperation. ‘Kommersant’, for example, wrote that Beijing is challenging Moscow’s desire to privatise Belarusian enterprises. Is such competition real?
You know, we’re eager to attract investments to modernise our enterprises. Like any other seller, we’re interested in attracting as many buyers as possible. Our position on privatisation, especially regarding large enterprises upon which the national economy relies, is determined wisely by the President. If Chinese companies are ready to make favourable offers, why should we refuse? If those from another country — such as Russia — have a more favourable offer, we’ll co-operate with them too. I think anyone would follow the same strategy.
It would be wonderful if Chinese partners came to establish new enterprises. I’ve often enumerated the advantages of doing so to the Chinese. In recent years, we’ve simplified tax legislation and, in 2012, we’re planning to implement a number of changes to make our country more attractive to investors. Profit tax has fallen from 24 percent to 18 and we’re trying to simplify the registration of firms and other such approvals.
Problems remain of course but we are moving in the right direction, as the Chinese observe. Companies which have already opened offices in Belarus (some have over 100 employees already) would agree. Direct investments are flowing into Belarus.
One Chinese company is building Lebyazhy housing estate in Minsk. When Mr. Bangguo visited Minsk, we placed the first stone into the foundations of the new five star Beijing Hotel — located favourably. About $70m of Chinese direct investments are being used for its construction.

Clearly, business co-operation is not enough to provide sound relations between states. Are our people becoming closer? What steps are being taken to strengthen relations between us?
Successful economic cooperation is impossible without the simultaneous development of human relations. We are always learning more about one another. Trade was my main concern as ambassador, as there were no political problems to resolve.
Our human relations are developing well, with about 2,000 students from China studying at our universities. This figure has stabilised in recent years. The Chinese love to visit our country. Most only have one child, so their safety is very important to parents. Belarus is known for being safe, and offering good quality education. I know a little of the education provided by European universities, so can say with certainty that ours rivals that of Europe. Chinese students can study Russian, which is useful in working not only with Belarus but with Russia and all other CIS countries.
There are two Confucius Institutes: at the BSU and at the Linguistic University. More are planned, as there are 17 across Russia. Chinese is studied at 130 universities there, so we lag behind Russia in this respect. We’ve been teaching Chinese at several schools for the past five years and are seeing sufficiently large interest.
We’re also liaising with China’s media, sending our journalists there. We’ve established a correspondent centre at the Xinhua Agency, providing China with more objective information on our country. Belarus and China are far away from each other and, although we share many similar characteristics — such as kindness, openness and sincerity — we are very different. I may even say that we have different civilisations, personal value systems and mentalities. We need to know each other well in order to liaise effectively. Among other things, this helps us to negotiate more effectively and to find compromises.
One phrase characterises the Chinese psyche: they love life not for its own sake but for the quality of living. They believe in reincarnation, with wrongdoing in a past life paid for in the next. It’s very wise if you think about it. Globalisation has influenced national features but some traditional ideas remain.
The Chinese love their families dearly, treating older people with great respect. Additionally, I was amazed by their eagerness for knowledge. We think that our pupils study too hard but the Chinese certainly study more. Education is helping China grow, so tomorrow depends on knowledge. Of course, China is a country of contrasts. There are 150 million people earning less than $1 per day, while rural areas need development and access to medicine. However, China remains viewed as a powerful and advanced country. I’m sure its future is bright.

Interviewed by Igor Kolchenko
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