Massive China — huge prospects
[b]Minsk visit by second most senior person in the official hierarchy of Chinese power confirms China as Belarus’ strategic economic partner[/b]In the past, the vastness of China’s population was mentioned to stress the country’s greatness. The figure currently surpasses a billion (1,350,000,000) — making it the most densely populated nation on the Earth. However, other figures also tend to be highlighted now, most often dealing with its economic successes. China is a rare example of a country emerging from the global crisis with more confidence and strength than in the past.
In the past, the vastness of China’s population was mentioned to stress the country’s greatness. The figure currently surpasses a billion (1,350,000,000) — making it the most densely populated nation on the Earth. However, other figures also tend to be highlighted now, most often dealing with its economic successes.
China is a rare example of a country emerging from the global crisis with more confidence and strength than in the past. China’s GDP continues to grow — by 10 percent last year, to reach about $3 trillion. Over half of its goods are exported to generate foreign currency, giving it the world’s largest gold and currency reserves — exceeding $3 trillion. Its permanent production growth and huge savings have made China a major creditor. Without exaggeration, it is the hope of the global economy. It’s enough to see how affable Washington is in its relations with Beijing. Similarly, various European states feel no shame in asking China for financial assistance.
In 2010, the country set a record for incoming foreign investments, which totalled $106bn. Meanwhile, China is quickly turning into a capital exporter, with experts predicting direct investments into foreign states reaching well over $100bn in the years to come. There isn’t a nation on the planet which isn’t keen to establish partner relations and economic collaboration with the huge Asian market. Belarusian diplomacy began developing in this direction in the late 20th century, well before some other nations. Today, Belarus is among China’s footholds in Europe, as vividly confirmed by the arrival of a large Chinese delegation to Minsk in late September — led by the Chairman of the Standing Committee of the National People’s Congress of China, Wu Bangguo.
Credit of trust
In September, the Chinese delegation made a large Moscow-Minsk-Tashkent-Astana tour, with the second most senior person in the official hierarchy of Chinese power paying an unprecedented four day visit to Belarus. In the language of diplomacy, this indicates China’s supreme degree of interest in Belarus. During his stay, he held numerous meetings in the Parliament, talking to government officials, and visited Chinese sites in Minsk: the modernised TPP-2, the Beijing Hotel (under construction) and the Confucius Institute at the State Linguistic University. The meeting with the President at his Residence in 38 Karl Marx Street drew a line under the series of Minsk talks.
Mr. Bangguo noted that his visit aimed to check up on progress made on previous agreements by our heads of state, and he certainly kept journalists busy. Moreover, new initiatives were announced, such as a Chinese-Belarusian Industrial Park to be built in our country. Beijing is allocating a $1bn loan on privileged terms to Minsk to finance joint projects. Previously, Beijing launched a $15bn credit line to Belarus to realise its projects and over $4bn of projects are now being implemented here, with credit support from the Chinese Government and banks.
20 years on
Alexander Lukashenko thanked the Chinese leadership for their ‘immense support — both moral and material’. Both sides agreed that ‘our relations are stronger than they have ever been before in our bilateral relations’.
Economic figures of co-operation objectively indicate the level of our co-operative development. However, political impetus inspires business ties. The Belarusian President has visited China six times, while Chinese leaders have regularly come to Minsk. In January, our two countries will celebrate their 20th anniversary of diplomatic relations, with turnover rising almost 70 times over that period — reaching $2.3bn in 2010. Bilateral relations have now reached a strategic level — as the two states’ leaders have announced.
In his welcoming speech, Mr. Lukashenko stressed, “We’re grateful that, at a moment’s notice, China is ready to offer its friendly shoulder of support. Belarus is hugely thankful to China for its assistance in developing our macro-economic situation. In this respect, I’d like to thank the People’s Bank of China for its efforts; the agreements and contracts signed over the past few days will drive forward some ‘breakthrough’ projects. I’m convinced that the launch of the first Belarusian communication satellite and the establishment of a Chinese-Belarusian Industrial Park will create a solid foundation for long-term partnership in the field of high technologies, while becoming a calling card for China in Europe.”
His last visit to Minsk took place in the last century. On meeting the President, Mr. Bangguo said, “14 years on, I’m again in Belarus. Huge positive changes have occurred in your country over this period of time. What I’ve seen over the past few days in Minsk is hardly comparable to the situation observed back in 1997. Importantly, all these successes have been achieved despite complex external conditions — including huge pressure from the USA and the West. In recent years, Belarus has faced certain difficulties as a consequence of the global financial-economic crisis, including increased gas prices and tougher sanctions from the West. We know that you’ve taken measures to counteract these challenges, as the results are already evident. Being your sincere friends, we’re glad to observe the successes achieved under your leadership and are convinced that the country will overcome its temporary hardships, continuing its advancement.”
Mr. Bangguo believes that very favourable conditions for bilateral co-operation have been established, with our economies complementing one another. “China boasts huge consumer and investment demand, with our companies increasingly investing in foreign nations. I’ve visited some Belarusian enterprises to see the strong industrial base present. Your country occupies a leading position worldwide in the spheres of micro-circuitry, quarry machinery and tractor production. Moreover, you boast huge deposits of potassium salt. We have great potential for co-operation in these fields. The Chinese Government will encourage our most powerful companies to invest in your country,” he emphasised.
Mr. Lukashenko assured the top level guests that China can rely on Belarus as a foothold state in Europe, irrespective of other countries’ reactions. As ever, favourable business conditions are to be created for Chinese companies in Belarus.
The consistency of Belarusian-Chinese relations shows that each jointly realised project sets an example to businesses, encouraging further ventures. At present, Chinese companies are modernising Belarusian TPPs, cement plants and transport infrastructure. Moreover, joint ventures successfully operate countrywide, including those focusing on white goods production. In Minsk, Mr. Bangguo visited TPP-2, which uses Chinese money and technologies, also signing several co-operative agreements.
‘Road map’ for privatisation
Belarus’ Prime Minister, Mikhail Myasnikovich, admits that he is pinning great hopes on a Chinese-Belarusian Industrial Park. He views this as a huge infrastructure project and stresses that ‘few such sites exist worldwide — in their scale of activity or volume of investment’. “We consider that, taking into consideration our national features, we’ll be able to match the success of the Chinese-Singapore Industrial Park in the city of Sudzou,” Mr. Myasnikovich added.
A framework agreement has been signed between the Belarusian Government and the State Development Bank of China envisaging modernisation of Dobrush Paper Mill. Additionally, a facility to produce sodium carbonate is planned near Mozyr (with a capacity of 300,000 tonnes a year) and a credit agreement has been signed to construct a hydro-electric power station on the Zapadnaya Dvina River.
China also plans to produce a communication satellite for Belarus. The State Military-Industrial Complex of Belarus and the Great Wall Chinese Industrial Corporation have agreed to create a national satellite communication system in Belarus.
The most intriguing Chinese-Belarusian framework agreement has been signed between the Belarusian Government and Eximbank, envisaging financial co-operation to privatise Belarusian companies and attract Chinese investments into the Republic in 2011-2012. This has been much commented upon by foreign analysts, such as Moscow’s Kommersant, which states: ‘Russia has a powerful rival in its fight for control over Belarusian enterprises. As a result of the visit by the Chairman of the Standing Committee of the National People’s Congress of China — Wu Bangguo — to Minsk, an unprecedented agreement on co-operation regarding the privatisation of Belarusian companies has been signed by Chinese investors. As the Press Secretary of Russia’s Prime Minister, Dmitry Peskov, tells us, Belarus has no similar agreement even with its Union State partner Russia. Experts are convinced that China’s battle for Belarusian companies will significantly aggravate Moscow’s efforts to take over its neighbour’s enterprises’.
Although Moscow journalists are certainly keen to create a story, it’s hardly possible to overestimate the significance of the Belarusian-Chinese ‘road map’ to privatisation.
Energy related collaboration
Co-operation in the field of energy is of special significance. Belarus has invited China to take part in a tender to realise energy projects worth $2.5bn; this will be double the figure seen by Belenergo and China currently. In 2008, Belenergo joined Chinese partners in implementing six investment projects to modernise the Belarusian energy system. Two are now finished: Minsk TPP-2 has been reconstructed and a 1.5MW wind facility has opened in the village of Grabniki. Specialists say that the reconstructed TPP-2 should generate an additional 325m kW/h of electricity annually (with total capacity reaching around 460m kW/h), saving an incredible $15m of fuel every year.
Quite soon, a steam-gas facility at Minsk TPP-5 is to launch, while Chinese steam-gas facilities at Bereza and Lukoml TPPs are to open in 2014 and at Vitebsk TPP — in 2015. In the coming eight years, about $500m of direct Chinese investments are to be allocated towards the construction of six hydro-electric stations countrywide.
As Energy Minister Alexander Ozerets tells us, China has also been asked to develop a coal deposit, launching an electricity station (using solid fuel). Belarus is also keen to co-operate with Chinese firms in constructing electric transmission lines for the first Belarusian nuclear power station. During his visit, Mr. Bangguo noted that China leads regarding the length of these lines, having rich experience in the field.
The dynamism of our joint projects is impressive, with many billions of dollars of investments forthcoming. It inspires us to believe that the plans outlined during the recent visit will be realised.
By Igor Kolchenko