[b]The train connecting the centre of Shanghai with the international airport of Pudong is actually rather inconvenient for TV journalists arriving to report on China. They don’t have time to deliver even a few phrases into their microphones during their journey, as it covers 30km in just 7 minutes and 20 seconds, travelling at 430km/h. It’s the fastest in the world, originally designed by the Germans. However, the Chinese plan to soon astonish the world with their new, super-high-speed connection between Beijing and Shanghai, designed domestically. In fact, the speed at which China is introducing advanced production impresses no less than the Chinese Express, as does the country’s pace of GDP growth. Belarus also hopes to make a powerful economic breakthrough, in close co-operation with this country. During Alexander Lukashenko’s recent visit to Beijing, an agreement was concluded which envisages Chinese financing of the electrification of some parts of the Belarusian railway. Moreover, China is to supply its cargo electric trains to our country. Of course, we are yet to achieve speeds of several hundred kilometres per hour but this is only the beginning of our path… [/b]
Mr. Lukashenko negotiated with the head of the most populous state in the world, the Chairman of the People’s Republic of China — Hu Jintao, in early October. “I’m ready to exchange opinions on the further development of our bilateral relations, in addition to other issues of mutual interest,” said Mr. Jintao, opening the meeting in Beijing. He emphasised the assistance rendered by Belarus to China during the recent earthquake. In turn, Mr. Lukashenko thanked his host ‘for the huge support which China provides to Belarus’. As a result of the visit, $3.5bn of contracts were signed. Beijing is allocating a major credit line to Belarus, to be used to set up new facilities: the construction of an accommodation complex, reconstruction of the airport, and modernisation of our transport system.
Importantly, our eastern neighbour is allocating a tied loan rather than injecting directly. Of course, we’ll need to repay the money spent on the Chinese equipment and services, but the Ambassador of Belarus to Beijing, Anatoly Tozik, believes that Chinese technologies are the obvious choice, being 30-40 percent cheaper than others worldwide. The situation is likely to continue over coming years, so it’s wise to take advantage of the present offer. Moreover, the quality of Chinese-made goods is even acknowledged by the USA. Not long ago, China agreed to modernise American railways, with their technologies rivalling those from the West (as seen from the example of the Express railway). No doubts now arise regarding the feasibility of Chinese goods arriving on the Belarusian market.
Contacts and contracts
Top level contacts play a significant role in activating Belarusian-Chinese relations. Mr. Lukashenko’s visit to China was his sixth as President. He travelled there as a parliamentarian almost twenty years ago (when China was primarily known for its down-padded coats); as he admits, he saw huge potential in the Chinese model. Today, we’re used to admiring the Chinese work ethic and the pace of their economic growth, which continued despite the crisis. Last year, Chinese GDP was up 8.7 percent, against global stagnation. Their rivals lagged behind, allowing the country to advance rapidly. China now outstrips Japan regarding GDP, with only the USA ahead. It has certainly knocked Germany from its pedestal as an export champion.
“We’re delighted by our good relations with the Chinese People’s Republic. It seems to me that the Chinese leadership also has no grounds to be displeased with our relations. In a decade and a half, we’ve travelled a long path of studying each other, building our relations. I believe Belarus deserves the trust of China. I’m also convinced that the Chinese leaders and common people realise Belarus’ nature and the policy its leaders pursue,” stated Mr. Lukashenko, speaking of bilateral liaisons. “I’m convinced that, in the coming 15 years, you’ll surpass all other states in your economic development. In this respect, we’re very pleased to have already established good relations with China, achieving a strategic level of collaboration.”
Our bilateral relations truly have achieved a level of strategic collaboration, as fixed in a declaration signed by the heads of state back in December 2005. Our strategic partnership with China, reinforced during the last visit, is a platform on which Belarusian foreign policy is founded. Investment co-operation with the most dynamically developing economy in the world allows us to rapidly modernise our own economy and, finally, achieve true independence. If such issues as gas prices become non-essential for Belarus — as may be possible if we become an efficient, high-tech economy — other difficulties will evaporate.
Credit of trust
In 2008, our bilateral turnover reached a record $2bn (despite falling by almost $800m in 2009). The crisis affected some of the achievements of Beijing and Minsk, but we firmly intend to restore our lost ground, pushing to reach new levels. This was demonstrated by the hearty welcome given to the Belarusian delegation in China. The 2010 trend inspires optimism, as trade has risen 60 percent — against 2009 figures. In recent years, investment co-operation has strengthened — despite the crisis.
On the eve of his nine-hour flight to China, the Belarusian President told Chinese journalists, “We’ve seen good collaboration in the investment sphere, especially over the past year or two. I’ve noticed that the Chinese have already taken the initiative, opening new enterprises in our country and trusting us. This is good but we’d like to see this trend gain momentum, becoming even more dynamic. China has the chance to do this, as I’ll be discussing with Hu Jintao. I think it will be a serious, fundamental meeting, which will define the strategy of our relations in the long term.”
Despite the views expressed by some Russian observers, Mr. Lukashenko’s visit to China was the result of many years of thorough preparation. Our enterprises began seeking out Chinese partners several years ago. Moreover, it seems to me that Mr. Lukashenko’s visit to China in 2005 was the starting point of our true relations. That year, mutual political understanding led to business liaisons. In 2008, the President attended the Olympics in Beijing and China became convinced of the seriousness of our intentions and our readiness to create a secure partnership.
During his Minsk visit, the Deputy Chairman of the People’s Republic of China, Xi Jinping, opened a credit line for Belarus worth a record $15bn. This was during the crisis year and, for the Chinese Government, was a serious step (China ‘only’ allocated $10bn to huge Africa, which boasts oil fields and valuable resources). Of course, a credit line is not ‘live’ money but Beijing could clearly see that its Belarusian partners are serious and, importantly, profitable. The Chinese have already launched production of microwave ovens at Horizont, the construction of cement plants and reconstruction of Minsk’s heat power plants. These are large projects, worth hundreds of millions of dollars, so it’s no surprise that the continuation of such co-operation has been agreed. In Beijing, 13 new contracts were signed.
Among the most interesting joint projects are a new energy block at Bereza hydroelectric power station (400mW) and another of the same capacity at Lukoml station. The Government has no doubt that these injections will pay for themselves, ensuring that we consume less fuel (modernised hydroelectric power stations annually save about $60-70m). This aids our long-awaited dream of energy independence.
In addition, a $768m contract has been signed to construct a plant making white cellulose at Svetlogorsk Pulp and Board Plant, with a capacity of 400,000 tonnes a year. The facility (in addition to the setting up of soda ash production, unique in Belarus, with the help of the Chinese) should prove profitable, since China itself buys $10bn of cellulose annually. No problems are expected in finding sales markets.
Meanwhile, Chinese Eximbank is allocating credit to finance reconstruction at Minsk National Airport over the coming three years (ready for the World Hockey Championship). In total, $600m is being invested in constructing a modern international passenger terminal, while equipping the airport with the latest security and alarm systems. A second runaway is to appear, suitable for A-380 craft and will, no doubt, meet world standards. On visiting Shanghai Airport, I was convinced that Minsk is badly in need of investment.
An intelligent transport system is to be created in Minsk, with the help of Chinese investments, specialists and technologies. The city’s transport will be automated, with crossroads, traffic lights and public transport centrally co-ordinated and information panels installed at trolley bus, tram and bus stops, giving real-time updates on the timetable. This should ease congestion in the capital, encouraging people to use public transport. Meanwhile, car drivers will gain access to information on how many free car parking places there are in the city at any given moment, with automatic payment introduced for parking. The system should come online by late 2013-early 2014, increasing the city streets’ traffic capacity by 20-25 percent.
Construction projects are to the fore, including those for hotels and accommodation. “I’ve invited the Chinese Government to create a corner of China at the centre of Europe — in Belarus,” Mr. Lukashenko told journalists. “What will it cost for huge, rich China to build such a unique island? Your Government has accepted my proposal and I’m convinced that, in the coming five years, this Chinese quarter could appear in Minsk. It would feature examples of your culture, cuisine and traditions. I’d love for it to employ not only Chinese citizens but, also, our local people. They could work jointly, providing services; it would be very interesting.”
We already have two thousand Chinese students for this ‘China-town’, studying Russian at our universities. Of course, an economic basis is required, which is now being created.
China currently has 1,350,000,000 residents, generating GDP of about $5 trillion. Beijing alone has double the population of the whole of Belarus, while Shanghai has triple the population. Belarusians should never view themselves as poor relations though, since China is eager to co-operate with Belarus, being attracted by our technologies. We, in turn, show interest in its financial resources.
Being an expert in international relations, I cannot recall the Chinese Government ever being guided by anything but pragmatism. In developing the Belarusian economy, it aims to develop China’s as well, with Chinese equipment supplied, alongside services by Chinese specialists. Belarus has a negative trade balance with China (minus $800m registered in 2008 and minus $900m last year) but business is business.
The Chinese appreciate our technologies; otherwise, a BelAZ production facility would never have appeared near Beijing. The Belarusian President officially opened it during his recent visit. The Chinese are now mining their resources, so our vehicles have arrived with good timing. Interestingly, one of the largest Chinese corporations (among the top 500 worldwide) partners this enterprise.
Founded by BelAZ and AVIC (China Aviation Industry Corporation), the venture has already begun selling quarry trucks to the Chinese market as an exclusive dealer (winning tenders worth almost $40m to date). The company is aiming high, keen to raise the share of our quarry vehicles in China to 25 percent.
“Just five months ago, there was an unfilled niche; now, we’re opening a new and promising company. The speed of our work is really impressive,” noted Mr. Lukashenko. “We can say that this has been a good start; a good beginning guarantees success!” The President personally addressed the heads of this joint venture, noting that, in future, sales should reach far beyond China. In his view, we have everything necessary to conquer new markets, including in other Far Eastern states. Primarily, our modern technologies, highly qualified personnel and well established ties with partners should drive this forward.
Mr. Lukashenko believes that AVIC could enter the huge market of the post-Soviet states. “We boast a unique position within the Customs Union, which enhances possibilities for collaboration and stronger liaisons. You’ll be able to trade without paying fees throughout almost the whole post-Soviet space,” he explained.
During Mr. Lukashenko’s visit to China, a Belarusian-Chinese technopark opened in the city of Changchun. Science intensive facilities are to cover 30 hectares, including a company producing medical lasers. “After the President’s visit to China in 2005, we increased our turnover sharply,” recollects our Ambassador to Beijing, Anatoly Tozik. “After 2008, credit-investment co-operation flourished. We’re now shifting to a new stage — the union of science and technology; it’s a most promising direction.”
Co-operation between our two countries blends various directions: trade, investments, credits and sci-tech developments. These are modern, with equal rights, and are mutually beneficial, creating a solid base for future development.
By Igor Kolchenko