Lines of credit reaching 15 billion US Dollars have been opened by the Chinese government and banks, for the financing of joint investment projects in Belarus. Many of those financed by China are almost complete, while others have just begun. Truly, their scale is unprecedented in Belarus.Solid portfolio
Chinese capital and technologies have been introduced into major sectors of the Belarusian economy: communications, energy, construction, and transport. Most projects are being funded by Chinese loans granted on profitable terms, with preferential interest rates (much lower than, for instance, those Minsk receives for its Eurobonds) and with longer payback periods. Belarusian mobile operator BeST was created with a loan from Eximbank of China while equipment and software were provided by Alcatel Shanghai Bell.
Minsk has been developing its co-operation with ZTE (a telecommunication company) for many years. Belarusian company Promsvyaz has entered into joint production of modems with ZTE, and the Chinese company is keen to take part in the privatisation of Belarusian telecommunication assets, expanding its presence on the Belarusian market.
Moreover, ZTE and the State Science and Technologies Committee of Belarus intend to create a ‘clever’ logistic system. “The idea of the joint project is to trace various strategic goods, including through customs, with the help of RFID technologies, which place electronic marks on goods,” explains the Chairperson of the State Science and Technologies Committee, Igor Voitov. This should help to improve management of goods and transport flow. The project is expected to be implemented with a Chinese preferential loan.
Chinese companies and financial institutions are actively participating in updating the Belarusian energy sector. The upgrading of Minsk’s heat-electro power stations 2 and 5 has been carried out with Chinese loans on good terms. Meanwhile, two major hydroelectric power plant projects, in Lukoml and Bereza, were launched in 2011, with construction and equipment of steam-gas plants contracted out to the Chinese Machinery Engineering Corporation and mostly funded by Eximbank of China ($633m).
The design, procurement and construction of new production lines at the Belarusian Cement Plant and at Krasnoselskstroimaterialy and Krichevtsementnoshifer enterprises have been funded by Chinese credit totalling $1.3bn. Belarus has been able to raise its production of cement, supply its own construction sector and enlarge exports.
Another major Belarusian-Chinese project is the construction of a bleached cellulose production plant in Svetlogorsk, in Gomel Region. Cellulose is widely used to produce paper and cardboard. The main objective is to satisfy the home market and export the remaining capacity. US $676 million has been set aside for construction: one of the largest investment projects that Belarus intends to carry out within the next five years.
Sky-high level
Besides co-operation in traditional economic sectors, Minsk and Beijing are liaising in advanced branches. During his visit to Minsk, Mr. Bangguo signed contracts and agreements that, according to Mr. Lukashenko, ‘will initiate projects which break the mould’. The launch of Belarus’ first communications satellite by China and the creation of a Chinese-Belarusian industrial park are at the heart of our joint efforts. The President of Belarus is convinced that these projects lay foundations for long-term partnership between Minsk and Beijing in the sphere of advanced technologies, which could ‘become China’s original business card in Europe’.
The President of the Chinese Great Wall Corporation, Yin Liming, agrees with his Belarusian counterpart. The corporation is the only one of its kind in China, having the right to build and launch commercial telecommunication satellites for foreign customers. “The contract with Belarus represents the beginning of satellite launch services provided by China to the European market,” asserts Yin Liming. China Daily notes that the contract signed with Minsk to launch a satellite is the seventh signed by China with a foreign country, and the first with a European state. The telecommunication satellite for Belarus is based on China’s ‘Dunfanhun-4’ device, which can remain operational for up to 15 years. The launch will take place within two years, from Xichang space launch site, in Sichuan Province. China is also to build a ground satellite control station in Minsk, while training technical personnel for its operation.
The Chinese-Belarusian industrial park will contribute to the development of such advanced technologies as biomedicine and fine chemistry, alongside traditional branches — such as machinery construction, electronics, and domestic appliance production. The park could become the largest Belarusian project to be implemented jointly with foreign partners, with an estimated cost of $30bn. It will cover 80 square kilometres and employ 600,000 staff, who’ll enjoy unparalleled benefits. The park will encompass not only Chinese but European manufactures, with exports aimed at the CIS and EU.
Belarus’ Prime Minister, Mikhail Myasnikovich, tells us, “We are placing our greatest hopes on the Chinese-Belarusian industrial park, which is a major infrastructural project. It will be unique worldwide in its range and volume of investments.” The Belarusian government hopes to duplicate the success of the industrial park in Suzhou, built by China and Singapore. Dozens of the world’s largest corporations, from the Fortune-500 list, implement projects there, aiding the park’s gross output of over $1bn.
Two-way traffic
In 2014, Belarus is to host an important international competition: the Ice Hockey World Championship. Although it is not the most popular game in China, Chinese companies are keen to help organise the event, making it another example of extensive and many-sided co-operation between Belarus and China.
New, high-class hotels are being built in Minsk to accommodate guests, including the five-star Hotel Beijing — one of the largest. Construction is being funded by Chinese investors, with the hotel due to launch by the beginning of the Championship. The building will be notable in its beauty and will showcase China’s achievements in the field of advanced technologies and modern architecture.
Minsk National Airport is to gain another runway by 2014, aided by Chinese investments, allowing it to accept the world’s biggest passenger airliner: Airbus A-380. Furthermore, a modern international passenger air terminal is being constructed by Chinese investors, giving passengers a comfortable and pleasant environment in which to wait.
Belarus and China have a solid portfolio of joint projects and future plans, running into billions. According to professional economists, this is mutually profitable, as China is freely offering loans at reduced rates of interest while generating employment. Moreover, Belarus is being enabled to update its technologies, improve infrastructure and raise its competitiveness, thanks to its strategic partnership with China.
By Vladimir Vasiliev
