Belarusian-Chinese Relations: From Great Promise to Failure
In the near future Minsk and Beijing plan to sign the main contract for the China-Belarus Industrial Park. Once a project that used to hold great promise, now appears to be a failure.
Lately, Belarusian-Chinese relations have gone through a number of stumbling blocks, including the delay of the industrial park near Minsk and a manufacturing plant in the Homel region. And Chinese Geely cars have yet to become a popular commodity in Belarus.
The lack of expertise and knowledge about China is the primary reason why Belarus cannot benefit from its relationship with the economic giant. Propaganda, as a surrogate to any fact-driven discussion, has brought Belarus more harm than good. The authorities continue to restrict access to information from independent journalists and experts.
If the authorities fail to develop their own strategy for their ties with China and adapt joint projects to the real needs of the Belarusian economy, the crisis in its relations with Beijing will only deepen.
Plants, Potash and Geely
On 3 April, Belarusian deputy Prime Minister Anatol Tozik agreed with Lee Kheysin, Vice President of the Chinese corporation CAMCE, to sign the primary contract for the Sino-Belarusian industrial park in the near future. The Park will occupy about nine thousand hectares of the Smaliavichy region (Minsk district) and host high-tech and export-oriented companies. In February, Alexander Lukashenka described the pace of construction as "a disgrace to the government", so Belarusian officials are trying to speed it up. Tozik promises to start construction on the first buildings in May or June this year.
The park remains important for the Belarusian economy, but it is unlikely to become a breakthrough project. The park will host only large-scale producers and will lack research laboratories for new companies, one of the most crucial elements that the economy needs. The authorities set the minimal amount of investment at $5m. China wants Belarus to finance 40% of this overall contribution on its own, but Minsk has no money to do so.
Previously many rumours circled around the park, particularly its enormity. State media reported about $30bn in investment, while the independent press got caught up in writing about the arrival of 600,000 Chinese construction workers. Today’s the rumours that are circulating mostly describe the failure of the project. Yury Ziser, the owner of popular web portaltut.by, writes that Russia and the EU could resist any expansion of Belarusian-Chinese products to their markets.
The Industrial Park is not the only evidence that Belarusian-Chinese relations were mired in a state of crisis. China buys potash fertilisers from Uralkali, the main competitor of Belaruskali, and remains reluctant to invest even in small projects in Belarus.
In 2013 the Belarusian Geely automobile plant sold fewer than 2,000 cars, far fewer than was anticipated. Generally, the public authorities, such as the police, were the primary owners of these new cars. Other cars were delivered to Kazakhstan. When refering to the situation with Kazakhstan, Geely employs the vague terminology that the cars were "supplied", not "sold."
A joint plant building porject, which costs about $800m, remains behind schedule. Earlier this year, Prime Minister Miasnikovich hinted to Chinese partners that if construction was not completed on time, the Belarusian party would have a problem with its loan repayments.
Even the Belarusian state media began to write about the two countries' ties with extraordinary caution. On 4 March, the Belarusian Telegraph Agency reported that "Huawei does not preclude a new project in Minsk." While Lukashenka`s regime claims that both parties are successfully working together in accordance with the prescribed program of the development of the Comprehensive Strategic Partnership Between Belarus and China for 2014-2018, few have seen this road map. The Belarusian Foreign Ministry has denied the author of this article access to the document.
What Went Wrong
The Belarusian authorities are facing the consequences of their own miscalculations. China never planned to invest in Belarus, a country with a small market and an expensive labour force. China wants to make a profit and remains reluctant to serve as a counterbalance to Russia or the EU. Orban`s Hungary, which also had some high expectations for cooperating with China, made no significant progress in this regard. China prefers to cooperate with less conflicted countries like Poland than with scandal-prone Hungary.
It seems that the Belarusian authorities have become victims of their own propaganda. The state media has long exaggerated the financial benefits of Belarusian-Chinese ties. Belarusian state media is beginning to describe relations of a strategic nature being back in 2005, but in reality the parties signed the Joint Declaration on the Establishment of Relations and Comprehensive Strategic Partnership only in 2013.
The government remained reluctant to support any analytical and academic discussions on ways to improve cooperation with the economic powerhouse. China, an authoritarian country like Belarus, relies on analytical centres. Thus, the Belarusian authorities lack the necessary information and expertise to make competent policies in this arena.
Without access to the documents it remains quite difficult to say whether Belarus has its own strategy for dealing with China. However, the results of cooperation in the form of a $2.5bn negative balance and the absence of investment rather indicate that Minsk has no idea what to do with China.
Will the Authorities Improve Cooperation?
Despite all the problems in their relations, Belarus receives certain benefits from China. The Chinese help Belarusians in the energy sector, China remains an important partner for Belarus' military industry, Chinese loans help Belarus keep its economy afloat. Only Beijing proposed Belarus cheap lines of credit that have amounted to $16 bn. However, this dependence on China limits Belarus` ability to demand more from Beijing officials.
Deputy Prime Minister Tozik and Lukashenka`s advisor Rudy, have worked in China and know it better than anyone else, but are both in limbo. On the one hand, when Tozik was an ambassador to China, he regularly praised China. On the other hand, he remains responsible for Minsk`s policy towards the Middle Kingdom. In this situation he should sober his colleagues up and have them recognise that the Belarusian-Chinese venture has been unsuccessful.
The Belarusian authorities should adapt an industrial park to the needs of Belarusian business, promote discussions about China at think tanks and universities, and its cooperation strategy should emerge sooner, rather than later. These small steps can help Belarus achieve a balance in its relations with China more positive.