Center for Strategic Assessment and forecasts

Autonomous non-profit organization

Home / Politics and Geopolitics / China and its role in the new world order / Articles
On the border with the European Union would be "a branch of China"?
Material posted: Publication date: 11-06-2018
The Belarusian economy is becoming increasingly dependent on China. But does this mean that Minsk will be able to completely "break away" from the influence of Moscow?

Chinese in Qingdao, held a summit of the Shanghai cooperation organization. In parallel there will be a meeting of the leaders of the Organization of collective security Treaty and the CIS. Alexander Lukashenko also went to China. But on the eve of the event, he tried to dot the "I" in Belarusian-Chinese relations.

May 28 at his country residence he had a meeting with Deputy Chairman of China Wang Qishan. The meeting was held in the format of a working dinner, according to the press service of the Belarusian President. And many said that "Lukashenko gave Wang Qishan water from a local spring" what "for dinner guest were treated to pancakes, Belarusian dumplings and duck ... for dessert, the President treated the guest for its speciality cheese bars with ice cream and strawberries" and that "in a country residence, the President takes only the most respectable ones guests." But not a word was said about the topics of the talks — except for the standard "discussed the world situation and international relations".

It is unlikely the second man in China on the eve of important international summit came to Minsk to "talk about the weather". Informed sources said that the sides agreed on very important issues, including those directly concerning Russia. The fact that China now proceeds to the main stage of the implementation of its global project of a New silk road, TRANS-Eurasian transport and logistics route connecting China with the European Union. This route will pass through the post-Soviet space. And Belarus, due to its geographical position and developed transport and customs infrastructures, becomes a real "bottle neck" — the interface NSHP its final destination, the EU.

Silk road is accompanied by a no less ambitious project "One belt, one road". This is the Chinese investment in enterprises and logistics infrastructure along the entire route. Here, too, and Belarus was one of the largest recipients. Near Minsk on Chinese money created huge industrial Park "Great stone" which, in fact, will play the role of a large warehouse of Chinese products at the border with the EU.

It is understood that China is now trying to invest in the Belarusian economy, in order to ensure loyalty to the official Minsk — it is fundamentally important to the work of the New silk road. On the one hand, is at hand, Alexander Lukashenko, who has long been seeking greater economic independence from Russia, but not willing to do the economy of their country is fully a market. On the other — around the business projects of China in Belarus there are more problems.

As soon as the direct economic influence of Russia in Belarus weakens, there is growing influence of China. China has long been ahead of the Russian Federation, in particular, the volume of investment and credit inflows into the Belarusian economy. But China started from a very different — in the period from 2000 to 2017 the export of goods from China to Belarus increased in 58 times. If at the end of 2017 Belarusians sold the Chinese goods on $362,7 million, or 1.2% of the total exports of the country, back proceeded the various goods of $2,744 billion — 8% of the total Belarusian commodity imports. While the lion's share of Belarusian exports to China is a potassium salt, instead of China is, above all, electronics and cheap consumer goods, "killing" the Belarusian industry.

"The share of Belarusian commodity supplies in the Chinese market in 2017 amounted to 0,02%. Two-hundredths of one percent! We are always talking about strategic partnership with China that rely on Chinese investments, as great progress submit letters of intent to sell to China of goods a couple of million dollars, — writes in his blog a well-known Belarusian economist, former presidential candidate Yaroslav Romanchuk. — Our officials fawn on the Chinese party and commercial bosses to get them some good: cheap a line of credit, but subject to the supply of Chinese goods, the supply of investment goods is also under the Belarusian government guarantees. In practice, working with China on the line of credit is the supply of such equipment and the Belarusian state Director even plants take up his head, but on top they are commanded to be silent. After all, China is almost our second new big brother".

Today is Chinese business is the largest real estate development projects in Minsk. It is a residential complex "the Promenade" (investor — the building company "Busisi", the investment amount of $250 million), hotel and business complex "'shanter hill" in Minsk (the investor — the company "CiticGroup", the amount of investment is $120 million), student residence (investor 25 company of China railway construction, the investment amount of $40 million), the hotel "Beijing" (the Chinese state-owned investors "Beijing uni-construction", Beijing capital tourism Corporation, the investment company "Chengdong", Beijing capital Corporation, real estate development, investment amount $100 million).

One of the largest Chinese projects in Belarus — production of passenger cars Geely. 17 Nov 2017 Lukashenka himself launched Borisov plant of the Belarusian-Chinese company "Belgee", saying: "Our Chinese friends responded to my request and helped create this wonderful plant. Moreover, more and lent. So my dream is to make your car has come true." New enterprise is located between Borisov and Zhodino area of about 120 hectares, the Design capacity at the first stage will amount to 60 thousand cars a year, then to 120 thousand annually. They planned to sell in Russia as a private Belarusian market is too small.

Today, Chinese businessmen in Belarus is also active in "agricultural" area. In 2017 the Chinese Corporation DRex Food Group and Xinrongji Holding Group announced plans to invest $1 billion in the Belarusian agribusiness. The Chinese company has leased 20 hectares of land for the construction of dairy farm for 40 thousand heads. Chinese businessmen interested in Orsha meat-packing plant, the company "Dairy Goodies" and "Zdravushka milk". And for the financial support of its operations in Belarus the heads of the Chinese companies Xinrongji Holding Group and DRex Food Group decided to buy in Minsk Bank "Moscow-Minsk" (now being prepared for privatization).

"Belarus exports to China almost exclusively potash — other goods in the Chinese market is closed, there its manufacturers enough. I can recall how, 15 years ago, the Chinese came to Minsk tractor plant and stated that they are interested in Belarusian tractors. The Ministry of industry then with joy a little crazy is not gone — say, the Chinese market is a bottomless, now flunk his tractors and Sam. And the Chinese bought 10 tractors, gave them to ten of its plants — those copied and began to produce for its own market. And Belarusians were left with the beautiful Chinese words — but without the market — said Belarusian economist Andrew Feldman. — These were repeated more than once, for example, a wheeled chassis for heavy missiles. Minsk plant of wheeled tractors was trying to create in China and Assembly facility. But in the end the Chinese just copied the Belarusian design."

However, Alexander Lukashenko and Wang Qishan discussed in Minsk the other, much more important for China project in Belarus. Industrial Park "Great stone", which in 2014 creates at Minsk "Chinese engineering Corporation CAMC". Great stone — one of the links of the "New silk road", it was confirmed XI Jinping, linking the project with the initiative of "One belt and one road". The amount of Chinese investment in the Great stone — more than $1 billion, the main investor — Corporation Sinomach, ZTE, Great Wall. According to the forecasts of the Embassy of China in the future, the volume of direct investments from China development Bank in the industrial Park will amount to $5.5 billion.

"Now in the Belarusian-Chinese industrial Park "Great stone" near Minsk, the Chinese Finance the construction of a huge logistics center (warehouse with access roads), which has already invested more than $250 million, He become a transit point for Chinese goods going to the European market, — said Aksenov. — But when the Great stone was created, the Belarusian side hopes that China will place in the industrial Park of modern high — tech production of microelectronic, biotechnology, etc. the Chinese have promised to do so. But after a couple years changed my plans on a more pragmatic".

Minsk gets from China the money for the development of the railway infrastructure under it is preparing the loans of the Export-import Bank of China amounting to $500 million Since railway transport is the main all along the "New silk road". Also signed a package of loan agreements between Belarusian Railways and China's Eximbank. Allocated $175 million will go to upgrading the locomotive and wagon Park and electrification of the railway Molodechno-gudogay.

In General, it appears that in the past few years, China gradually occupies the place that the Belarusian economy has always occupied Russia. China is investing in the Belarusian infrastructure, and factories jointly developed new weapons, Chinese missiles in orbit satellites of the Belarusian and Chinese banks that are more profitable than the Russian one. The question now is, will this economic influence in the political, and how soon it will happen.

Mikhail Petrovsky


RELATED MATERIALS: Politics and Geopolitics