Contracts worth over $3.4bn, soft credit of $1bn and 60m Yuans of free credit are the terms settled by President Alexander Lukashenko and the vice-chairman of the People’s Republic of China, Si Tzinpin, decided in March in Minsk. Belarus and China are strategic partners in the political and trade sphere, where both parties are on good terms
Chinese wisdom says that ‘one has to cross a deep river carefully, feeling the bottom and river stones’. Such is Beijing’s strategy concerning external markets. It investigates potential partners carefully, scrupulously weighing the pros and cons and only then agreeing commercial operations.
Negotiating at the Presidential Palace, Mr. Lukashenko noted that, in previous years, China and Belarus have had the chance to get to know each other. Moreover, they’ve learnt to overcome the difficulties of developing commercial and economic relations. This is confirmed by investment co-operation and rising turnover (from $714m in 2005 to over $2bn in pre-crisis 2008). There are several major projects being carried out by Chinese businesses in Belarus.
BeST mobile operator worked with Chinese Alkatel Shanghai Bell in 2008, while Minsk thermal power stations No.2 and No.5 were modernised with the aid of the Chinese national corporation for foreign economic co-operation. Chinese City Construction helped build three large cement factories in Belarus and Midea joint venture (with Belarusian Horizont) has been set up to produce household appliances. With reference to Midea, President Lukashenko noted, “It’s remarkable that even last year, which was critical for the global community, the Chinese holding increased its share in the joint venture from 30 to 55%, having evaluated the reliability and prospects of the Belarusian market.”
China clearly assessed the Belarusian market as offering promising opportunities and reliability at national and corporate level.
During his visit to Minsk, Si Tzinpin remarked, “We’ve always paid attention to the steps being taken towards developing your economy. Despite the global financial crisis, Belarus has managed to keep its political stability and economical growth, while improving standards of living.”
It’s obvious that China is feeling confident, despite the global recession. Its gross domestic product last year rose 8.7% while that of the USA fell 2.4%, that of the EU fell 4.2% and that of Russia dropped 7.9%. It’s building its economic power by investing abroad. Minsk, in its turn, welcomes Chinese investment and is interested in seeing this progress further. We are benefitting from low interest rates on loans used for modernisation and the purchase of modern equipment and technologies. Moreover, Alexander Lukashenko pointed out several times that Belarus is eager to assemble Chinese goods, which can then be sold on to the EU and Customs Union partners.
“We’re ready to co-operate on many projects, starting with the production of agricultural products,” Mr. Lukashenko stressed.
Investment and guarantees
A package of documents signed in March suggests that economic co-operation between Belarus and China is entering a new stage, with relations encouraged by inter-governmental agreements. ‘These include commercial and economic co-operation, financial co-operation between the Ministry of Finance of Belarus and the Public Development Bank of China, payment management between the National Bank of Belarus and the People’s Bank of China and agreements regarding definite commercial projects.
For example, the Public Development Bank of China is to grant a credit line of $60m to Belarusian Beltelecom — the national phone line operator — to pay for new equipment and the modernisation of the existing network. The press service of Beletelecom tells us that a reasonable portion of the sum is to be used to extend its coverage, while creating modern, high-speed, accessible Internet-infrastructure.
A protocol regarding the reconstruction of the existing Minsk National Airport details the creation of a modern international passenger terminal and a second runway — able to accommodate the biggest passenger planes, such as the Airbus A380.
The Deputy Director of the aviation department at the Ministry of Transport and Communications, Vladimir Kostin, tells us that the second runway should be operational by 2014, in time for Minsk’s hosting of the World Hockey Championship. “According to provisional agreements, about $650-660m is being spent on the creation of the second runway,” he explains. “It will bring additional income, since planes like the Airbus A380 pay fees several times higher than, for example, a TU-154.
During a visit to Minsk by Chinese governmental authorities and business circles, another dozen promising projects were approved. Negotiating with guests, Mr. Lukashenko pointed out, “As President, I guarantee whole-hearted support and safety for Chinese investments into the Belarusian state.”
by Vitaly Volyanuk
- Great friendship — great projects
Great friendship — great projects
[b]Contracts worth over $3.4bn, soft credit of $1bn and 60m Yuans of free credit are the terms settled by President Alexander Lukashenko and the vice-chairman of the People’s Republic of China, Si Tzinpin, decided in March in Minsk. Belarus and China are strategic partners in the political and trade sphere, where both parties are on good terms[/b]
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