Minsk wants China's help countering Russian and Western pressure
Next month, Belarusian leader Alexander Lukashenka will head for China. While he remains isolated in the West, this will be his tenth visit to Beijing. Addressing the Belarusian parliament on 21 April, Lukashenka gave much attention to Belarusian-Chinese relations and Belarus's key role in the Chinese 'Silk Road' project.
Political contacts between the countries look excellent. On 17-18 April, Zhang Dejiang, Chairman of China's National People's Congress, the third-highest ranked member of the Chinese government, visited Belarus. On 10-11 April, Guo Shengkun, Chinese Minister of Public Security, also came to Minsk.
Economic relations, however, have been somewhat rocky. The trade balance remains hopelessly unfavourable for Belarus. Even the pet project of the Belarusian leadership – a joint industrial park near Minsk – remains almost empty.
Chinese money for Belarus
Lukashenka is taking every opportunity to meet with Chinese leaders. In September 2016, he paid a full-scale state visit to Beijing. Not much later, on 14-15 May, the Belarusian leader will attend the international forum of 'One Belt, One Way' (the Silk Road project) in Beijing.
For Minsk, contacts with Beijing are a useful tool in its complicated balancing act between the West and Russia.
For instance, talking on 20 April to Valeriy Shantsev, the governor of Nizhni Novgorod Province in Russia, President Lukashenka lashed out at the 'fabrications' in the Russian media concerning Belarusian-Russian relations, and made ambiguous hints talking about China's role. According to him, speaking about credit loans granted by foreign countries to Belarus:
It is not Russia which holds the first place on these matters, the first place belongs to the People's Republic of China. It provided us with a credit line of about $15bn for projects to be implemented in Belarus, we have not yet used it in full. Most importantly, they do not reproach us for helping us.
Persuading the Chinese to buy Belarusian
Meanwhile, Belarusian officials have publicly articulated several problems with Belarus-Chinese economic collaboration. Belarusian prime minister Andrei Kabyakou, meeting the Chairman of the Standing Committee of the National People's Congress of China Zhang Dejiang, stressed: 'It is now time to bring our economic relations to as high a level [as political relations].' President Lukashenka told the visiting Chinese official more bluntly that he was 'very concerned' because of the lack of balance in bilateral trade.
For more than a decade, Belarus has suffered from a huge trade deficit with China. Belarusian and Chinese officials have discussed the problem on numerous occasions and it has been a subject of public discussion at least since 2015. Nevertheless, there have thus far been no results. Thus, last year the value of Belarusian commodities export to China made up $468.3m, while imports reached $2,114m.
The widely-publicised Belarusian-Chinese joint industrial park project near the Minsk airport perfectly illustrates the difficulties which persist in bilateral relations.
An empty park
At a press conference on 14 April, Chairman of Minsk Province Executive Committee Syamyon Shapira acknowledged existing problems in attracting companies to the Great Stone Belarusian-Chinese Industrial Park.
So far, just eight firms have registered there. As of mid-April, only three Chinese firms have started constructing their factories there.
Shapira even went to China in early April to look for solutions to the Park's problems. Although he admits that 'there are not many businesses eager to come [to the Park]' he promptly assured 'there is no catastrophe.'
However, the situation is highly precarious, as the case of Weichai Power – a major Chinese engine-manufacturing company – demonstrates. Last October, Belarusian industry ministry Vitali Vouk announced that Weichai Power signed a memorandum with Minsk regarding joint production of its diesel engines at Great Stone Park.
If implemented, the project would have brought significant gains to both countries. Belarus expected the new joint production line to give a boost to major national enterprises like Minsk Motor Plant (MMZ) and Minsk Automobile Plant (MAZ). China obviously wanted access to the markets of the Eurasian Economic Union.
However, on 19 April, the Russian daily Kommersant reported that the Chinese were considering another option – organising a joint venture with the Russian KamAZ. According to the Russian newspaper, Weichai Power's project in Belarus had failed to take off.
Representatives of the Great Stone Park administration immediately refuted these claims and insisted that the project was advancing. The next day, the Belarusian embassy in Beijing quoted a representative of Weichai Power saying that the firm was sticking to its plans to launch production in Belarus. Moreover, according to him, Weichai Power's joint project with KamAZ would not impact Weichai Power's cooperation with the Belarusian MAZ, a long-time rival of KamAZ.
At any rate, Weichai Power is still not on the list of companies registered in the Park. What's more, given earlier criticism of the idea to establish a joint production of Chinese cars in Belarus by Russian ambassador Aleksandr Surikov, this story looks very much like another case of Moscow's interests colliding with Minsk's.
The 'Chinese Caterpillar' helps Belarusian MAZ
Minsk can certainly boast some achievements in its cooperation with Beijing. Listing the recent economic achievements of Belarusian-Chinese relations on 15 April, Belarusian deputy prime minister Uladzimir Syamashka highlighted the construction of three cement factories (total investment volume - $1.5bn), two power plants ($800m), and BelGee, a soon to be launched car-manufacturing joint venture ($360m) implemented with Geely, a Chinese automotive manufacturing company.
The Great Stone project is – however slowly – advancing, too. Thus, on 15 April, the construction of a $45m-factory for the Chinese Zoomlion corporation started in the Park. Zoomlion is a large Chinese firm manufacturing construction machinery and sanitation equipment or, as Financial Times put it, 'China's answer to Caterpillar.'
Zoomlion has already founded a joint enterprise with Belarusian MAZ, and the two firms plan to instal Chinese equipment and machinery on a Belarusian MAZ chassis. The Chinese reportedly have plans for two production sites in the country: in the Great Stone Park and in an existing plant in Mahilyou.
Cooperation with China remains a challenge for the Belarusian government. In the early 2010s, some oppositional activists, experts, and various media sources made gloomy predictions about possible massive Chinese settlement in Belarus by means of the Great Stone Park. These proved baseless, as the park, like many other Belarus-Chinese enterprises, suffer from the opposite problem: lack of Chinese interest.
Political relations prove to be difficult to translate into economic cooperation. By cooperating with China, Minsk could advance its neutrality model masked as 'multi-directional' foreign policy, yet the Belarusian economy sets limits for how far this policy can go. And it is the Belarusian economy which the Chinese are most hesitant about. Minsk hopes that in the future this can change, as China becomes a global power.