Although Belarus and China established diplomatic relations in 1992, and adopted a joint declaration on establishing a comprehensive strategic partnership in 2013, the most dynamic cooperation between Minsk and Beijing has been developing over the past few years. Its activation coincided with the start of the Russian- Ukrainian conflict in 2014. It was this conflict that served as one of the main reasons for China’s increased strategic attention to Belarus, forcing Beijing to reconsider its initial plans for promoting the “Belt and road” initiative in Eastern Europe, where Ukraine was given a special role.
So, since 2014, Belarus and China have implemented a comprehensive strategic partnership development program for 2014–2018. Since August 2015, Presidential Directive No. 5 “On the Development of Bilateral Relations of the Republic of Belarus with the People’s Republic of China”, has been implemented, which has identified the development of a comprehensive strategic partnership with China as one of the main foreign policy priorities. The Treaty of Friendship and Cooperation, signed in May 2015 during a state visit to Belarus of President Xi Jinping, entered into force in September 2016. Finally, the highest level in the history of bilateral relations with China was established in 2016. During Aliaksandr Lukashenka’s visit to China, held on September 28–29, 2016, the heads of Belarus and PRC reached an agreement on establishing a new special level of bilateral relations: a trustful comprehensive strategic partnership and mutually beneficial cooperation. Until recently, China had achieved a similar level of relations only with Great Britain, Pakistan, and Russia.
Thus, in the conditions of destabilization of the military-political situation in Ukraine due to Russian aggression (the annexation of Crimea and the conflict in the Donbass), China’s attention was shifted to Belarus as a more predictable and stable state. For Minsk, in the context of the growing crisis in relations with Russia since 2014, China has been an important strategic partner, cooperation with which allows balancing Russia’s pressure, as well as strengthening national sovereignty and independence. However, for Belarus, the specific prospects and results of participating in the Chinese initiative “Belt and road”, as well as the prospects for Chinese- Belarusian cooperation as a whole, will largely depend on Minsk’s ability to meet Beijing’s expectations in terms of hedging internal and external risks and creating the necessary business climate for Chinese and Western investments, as well as gaining access to promising, i.e. Western markets.
The impact of the Russian-Ukrainian conflict
Judging by the intensity of negotiations between Ukraine and China until 2014, it was Ukraine that should have become a key partner in the implementation of the “Belt and road” initiative in Eastern Europe. The project involved large Chinese corporations like:
• Xinjiang Production and Construction Corps - an agreement on the lease of
100 thousand hectares of agricultural land with the prospect of expanding
the transaction to 3 million hectares, a memorandum on investments in
the infrastructure of the Crimea, including the construction of highways,
housing and a bridge across the Kerch Strait;
• CNCEC and its subsidiary Wuhan Engineering Co. - agreement on the
construction of plants for the production of synthesis gas from coal using
Shell technology;
• Beijing Interoceanic Canal Investment Management (BICIM) - a
memorandum on the implementation of a major infrastructure project
related to the construction of a deep-sea port and industrial park in the
Crimea; etc.
The activity of Chinese corporations in Ukraine has its own explanation. The Ukrainian authorities were negotiating with the European Union (EU) on the conclusion of the Association Agreement and the Comprehensive and Deep Free Trade Area in 2012-2013. China’s access to Western markets is one of the priorities of the “Belt and road” initiative. So, during the visit of Viktor Yanukovych (at this time Ukrainian President) to China in December 2013, the parties talked about the possible allocation by China of USD 15 billion loan to Ukraine. Earlier, in November 2013, the Eastern Partnership summit was held in Vilnius (Lithuania). There Viktor Yanukovych was supposed to sign the Association Agreement and the Free Trade Area with the EU, but at the very last moment he refused to sign because of pressure and blackmail from Russia. However, the Chinese during negotiations with Viktor Yanukovych told him that the signing by the Ukraine of agreements with the EU is a condition for investing in Ukraine. This once again emphasizes the importance and priority of access to the European market for China.
In March 2014, Moscow began a covert operation to annex Crimea to the Russian Federation and prepared for an invasion of the eastern regions of Ukraine (Donbass). Officially, China did not recognize the annexation of Crimea, and Chinese corporations that planned investments in Crimea and the eastern regions of Ukraine abandoned their plans. So, in a special statement of BICIM dated May 31, 2014 it was said that the company’s specialists were recalled from the Crimea and stopped working on the project, as the company respects the fundamental principles of international relations and is still going to be guided by them in its activities.
Thus, the Russian-Ukrainian conflict forced China to make adjustments to the promotion of the “Belt and road” initiative in the region of Eastern Europe. First, military instability has increased political, economic, and security risks for Chinese investment in Ukraine. Secondly, due to the confrontation with Russia, the entry into force of the Association Agreement and the Free Trade Zone with the EU was delayed for an indefinite period (it entered into force only on September 1, 2017).
Against this background, China shifted its attention to Belarus as a more predictable and stable partner. A year after the start of the Russian- Ukrainian conflict, in May 2015, President of China Xi Jinping visited Belarus. Following the results of official negotiations between Belarusian ruler Aliaksandr Lukashenka and President of China Xi Jinping in Minsk, the heads of the two states signed the Treaty of Friendship and Cooperation between Belarus and China, which, in particular, notes that Belarus and China agreed on the basis of common benefit to jointly promote the creation of the “Belt and road” and expand cooperation in trade, economic, financial, investment, scientific and technical, energy, space, transport, information, technological, agricultural, humanitarian and other areas in the name of peace, security and stability in the Eurasian region. The parties reached an agreement on the interaction of Minsk and Beijing on issues affecting national interests, national security and sovereignty, as well as the position of China, which opposes any external interference in the internal politics of Belarus, supports the efforts of the Belarusian authorities to protect state independence, sovereignty, territorial integrity, additionally testifies to the importance of the Belarusian direction in the foreign policy of China. For the same reason, Belarus and China have recently been actively cooperating in the militarypolitical and militarytechnical sphere.
Belarus in the strategic plans of China: a window to Europe
One cannot disagree with the position of the Chinese expert Xu Liang from the Centre for International Studies of Beijing Second University of Foreign Languages, who believes that many countries of the “Belt and road” initiative space are involved in the great game of great powers, are on the verge of a authorities change, transition to political democracy, have interethnic conflicts and other various contradictions. Therefore, the political risks of the “Belt and road” states have already become the most important challenge for China to promote this initiative and for Chinese enterprises to enter the markets of these states.
According to his estimates (2015), Belarus faces the following political and economic risks: the dominance of a planned economy and the absence of structural reforms, the instability of the government’s economic policy, the deepening economic crisis and strong dependence on Russia, the risks of an unpredictable transit of power and a change of leadership, the likelihood of a “colour revolution” as a result of the actions of internal and external opposition groups in order to weaken the political system, the negative impact of the Ukrainian crisis and the potential “import” of the political crisis into Belarus from Russia.
Mikalai Lukashenka playing the piano / intex-press.by
However, Xu Liang also notes the fact that “Belarus has a favourable location, a relatively good industrial and agricultural base. In the west it borders the EU market, in the east – Russia. It has convenient transport links, and the cost of transportation is low”. Also, “the political situation in Belarus is stable, the geographical position is favourable, there is access to the CIS and EU markets, a good educational base, highquality workforce, certain possibilities to develop the industry, which is suitable for implementing the strategy of Chinese enterprises’ “entering”.
During his visit to Belarus in May 2015, President of China Xi Jinping said that Belarus is an important strategic hub located in the centre of Europe on the “New Silk Road”, and also has unique advantages for developing this initiative. Also, Xi Jinping visited the “Great Stone” Chinese-Belarusian Industrial Park and called it the “Pearl of the Belt and road”, which is very symbolic and emphasizes the strategic importance of this project for the Chinese. In turn, Aliaksandr Lukashenka noted that by opening production in Belarus, Chinese business will be able to take advantage of unhindered access to the market of the Eurasian Economic Union, adding: “To be honest, China can enter the large Eurasian Union without Belarus in terms of economy, but to cooperate with the EU, which is essential for PRC today and can be a determining factor in world development in the future, such a platform is extremely beneficial for the PRC. And Belarus acts in this field”.
The intensification of cooperation between Belarus and China coincided in time with the onset of the Russian- Ukrainian conflict and theemerging crisis in relations between Minsk and Moscow in 2014. Belarus’s participation in the “Belt and road” initiative is an additional factor in the diversification of Belarus’s foreign policy and economic relations, aimed at reducing the geopolitical pressure from the Kremlin and dependence on Russia in both the economic and military-political spheres.
«Great Stone» industrial park trading centre / indastrialpark.by
Russia is trying to block the further development of Belarusian-Chinese relations at the institutional level through integration structures like the Eurasian Economic Union (EAEU), the Collective Security Treaty Organization (CSTO), and the so-called Union State of Belarus and Russia. For example, Belarus cannot conclude a bilateral agreement with China on a free trade zone. With the entry of Belarus into the Customs Union in 2010 and the EAEU in 2015, now the decision on concluding agreements on a free trade zone is in the supranational competence of the Eurasian Economic Commission. Further participation of Belarus in the EAEU with the adoption of the EAEU Customs Code, in fact, devalues the original plan of the Chinese-Belarusian Industrial Park “Great Stone” and other joint production in Belarus as “assembly shops”. Thus, the manufactured products will not be able to freely enter the EAEU market if they don’t comply with the terms of the EAEU Customs Code (in particular, if the cost of foreign materials exceeds 50 percent of the cost of the finished product and/or its product year does not change as a result of processing, it is not a product manufactured in the territory of the EAEU, therefore it is subject to additional duties).
A key project for economic cooperation is the Chinese- Belarusian Industrial Park “Great Stone”. It was founded in March 2010 during the visit of Xi Jinping, who then served as vice chairman of the PRC. However, the project practically did not develop for a long time. Only in 2014, the first resident company appeared in “Great Stone” – Huawei. In 2015, the visit of Chinese President Xi Jinping gave a new impetus to the development of “Great Stone”. Indeed, after the annexation of Crimea by Russia, the project for the construction of a similar industrial park and deep-water port on the territory of the Crimean peninsula for China has lost relevance. In this context, the “Great Stone” has become a replacement for Chinese projects in the Crimea and beyond. The existing transport and logistics capabilities of Belarus, located at the intersection of II and IX pan-European transport corridors (West - East, North - South) as well as not far from the Baltic (Klaipeda, Riga) and Ukrainian (Odessa) ports, create all the necessary conditions for the transformation of Belarus not only to the regional logistics hub, but also to the production hub with the subsequent promotion of the goods flows created in the “Great Stone” in a western direction.
In total, as of August 2019, the number of companies registered in the park increased to 56 residents. According to the Minister of Finance Maksim Ermalovich, more than 100 residents,USD 2 billion of investments, at least USD 1 billion of manufactured products and 6.5 thousand new jobs are planned to be achieved by 2020. However, despite the preferential regime of the “Great Stone” (which is a free economic zone), the main obstacle to its further development is the lack of promising sales markets for manufactured products.
So, the priority technologies that are planned to be developed and localized in the Great Stone include robotics, fine chemicals, bioengineering, IT, mechanical engineering, and transport logistics. The countries of the CIS and the EU are the markets declared by Belarus. However, while Belarus has the relevant agreements regulating trade and economic relations with the countries of the CIS and the Eurasian Economic Union, there are still no such agreements with the EU. In addition, Belarus is still not a member of the World Trade Organization (WTO), which complicates access to the markets of WTO member states. During the visit of President of China Xi Jinping to Minsk in May 2015, Aliaksandr Lukashenka said: “We will do everything necessary so that China can effectively promote its interests in Europe.” However, since then no progress has been made in this field. The Belarusian side intends to enter into the signing of a basic agreement on partnership and cooperation with the EU, as well as to complete negotiations on accession to the WTO only by the end of 2020. Therefore, at this stage, large Chinese corporations prefer to immediately enter the European market through EU member states (for example, Hungary) or have deep institutional ties with the EU in the form of association agreements or advanced partnerships (Armenia, Georgia and even Ukraine, which again is experiencing interest from China).
As an option to solve this problem, Belarusian Ambassador to China Kiryl Rudy proposed granting the “Great Stone” the status of an “industrial offshore”, which would be similar to the status of Hong Kong in China. This means that the industrial park could have a special status in order to independently conclude free trade agreements with the EAEU, the EU, China and other countries. However, for its practical implementation, it will take time and, most importantly, the interest of the target states.
Iron brothers: military and military-technical cooperation
Belarus began to develop military-political and military-technical cooperation with China almost from the very beginning of its independence. For many years, the Belarusian leadership sought to draw China into regional affairs as one of the external guarantors of stability, able to balance firstly the West, and after 2014, Russia as well.
Initially, China’s cooperation with Belarus in the militarytechnical sphere was motivated by Beijing’s desire to gain access to a number of Soviet military technologies that remained in Belarusian military-industrial complex after the collapse of the USSR. At the same time, by the late 1990s and early 2000s, it was Belarus that acted as a donor of military technologies for China. In 1995, Belarus and China signed an intergovernmental agreement on cooperation in the military-technical field. The document provided for the establishment of the Coordination Committee for Cooperation in the Field of Arms and Military Equipment.
China’s interest in such cooperation was in obtaining Belarusian technologies related to multi-axis chassis for various Chinese missile systems, including intercontinental ballistic missiles. So, in 1997, a joint venture “Sanjiang Volat Company, Ltd.” was established in Siogang (Hubei Province). In 2009, in Minsk the partners created a joint enterprise for the production of hydromechanical transmissions for heavy vehicles and wheeled tractors – “Volat-Santszyan LLC”. A little later, another joint assembly production of the hydromechanical transmissions was organized at the “Sanjiang Volat Company, Ltd.” in Siogang.
Another area of cooperation in the early 2000s was the interaction in the field of space technology. In this area, the main emphasis was made on the exchangeof technologies in the field of creating aerospace optoelectronic equipment and photogrammetric systems for obtaining digital electronic maps of the Earth’s surface, and navigation support for high-precision weapons.
However, the greatest intensification of militarytechnical cooperation occurred in the period after 2010. At the same time, there was a change of roles. Since that time, China has become a donor of military technology for the defence industry of Belarus. So, thanks to cooperation with China, Belarus acquired its own satellite and missile programs.
In 2012, the China Aerospace Science and Technology Corporation (CASC) became a partner of the National Academy of Sciences of Belarus in the development of the satellite program. The main project was the creation of the National Satellite Communication and Broadcasting System of the Republic of Belarus BELINTERSAT.
The main project in the missile program was the development in 2014 ofthe “Polonaise” multiple launch rocket system (MLRS) by the Belarusian Precise Electromechanics Factory in cooperation with the China Academy of Launch Vehicle Technology (CALT, also known as the First Academy), which is a part of CASC. It was this Chinese corporation that donated technology for the production of A200 missiles (range up to 200 km), which are used for MLRS “Polonaise”. At the moment, the Precise Electromechanics Factory has mastered the modernization of the MLRS “Polonaise” V-200 to the new generation of the MLRS “Polonaise” V-300 capable of carrying missiles with a range of up to 300 km. In general, further development of the “Polonaise” project can go the way of its transformation into a single universal missile system GATSS (General Army Tactical Strike System), actively promoted by CALT and capable of carrying various types of ballistic and cruise missiles (from A100, A200, A300 and M20 up to CX-1).
On an ongoing basis, China provides free technical assistance to Belarus,supplying military equipment for the needs of the Armed Forces of the Republic of Belarus free of charge. For example, in October 2017, an agreement on the provision of such assistance in the amount of USD 4.5 million was signed. In 2012, China delivered 22 DongFeng Mengshi cross-country vehicles for the needs of the Belarusian Special Operat ions Forces, a nd in 2017-2018 – 30 armoured vehicles CS / VN3 Dajiang.
In general, five international treaties have been concluded between Belarus and China in the military-technical sphere. The coordination of bilateral military-technical cooperation is carried out within the framework of the work of the Belarusian- Chinese committee for cooperation in the field of armaments and military equipment.
Since 2011, special operations forces of the Armed Forces of the Republic of Belarus and the People’s Liberation Army of China (PLA) have been conducting anti-terrorism exercises on a regular basis (“Swift Eagle” in Belarus in 2011, 2015 and in China in 2012, “Attacking Falcon” in 2018 - in China). In 2017, for the first time Belarus hosted the joint anti-terrorism training “United Shield-2017” with the participation of special units of the Internal Troops of the Ministry of Internal Affairs of Belarus and the People’s Armed Police of China. The Commander of the Chinese People’s Armed Police, Wang Ning, then said that the event was designed to promote regional security.
In July 2017, a delegation of the PRC Ministry of Public Security (MPS), headed by the head of MPS Political Bureau Xia Chunyuan, visited Belarus. Following the visit, the law enforcement agencies of Belarus and China agreed to strengthen cooperation in the fight against terrorism (including the exchange of information and the provision of technical assistance to Belarus by China). In turn, China hopes that the Belarusian colleagues “will pay special attention to the terrorist groups operating in Eastern Europe, ensuring security in Belarus, including in the territory of the “Great Stone” industrial park. The Ministry of Internal Affairs of China also counts on cooperation with the Ministry of Internal Affairs of Belarus to ensure the security of the “Belt and road” facilities, transported goods, and the protection of public order in the Chinese- Belarusian Industrial Park “Great Stone”.
Xi Jinping / RIA Novosti
Also in July 2017, Belarus was also visited by the Chinese delegation, headed by Xiao Yatsin, Chairman of the Committee on Control and Management of State Property of the PRC State Council. During a meeting with him, Aliaksandr Lukashenka suggested that China should discuss the possibility of creating high-tech defence industry enterprises in “Great Stone”, both joint and 100% Chinese ones. The Chinese delegation included the heads of leading military-industrial complex corporations (СASIC, NORINCO, ALIT, AVIC, CATIC).
Finally, in April 2018, during a visit by Wei Fenhe, a member of the Central Military Council, a member of the State Council, and the Minister of Defence of China to Belarus and his meeting with Mr. Lukashenka, it was announced that Belarus and China had reached the highest form of military cooperation and became “iron brothers”. Until recently, China had such a level of relations only with Pakistan - another key participant in the Chinese “Belt and road” initiative. At the moment China and Pakistan implement the joint project of China-Pakistan Economic Corridor. Then, at a meeting, Aliaksandr Lukashenka said that China played a decisive role in strengthening the defence capabilities of Belarus.
Instead of a conclusion: modest results, but ambitious perspectives
Thus, over the past few years Belarus and China have reached the highest level of interaction: trustful comprehensive strategic partnership, mutually beneficial cooperation (2016) and “iron brotherhood” (2018). The Russian-Ukrainian conflict indirectly contributed to this, which shifted China’s strategic attention from Ukraine to Belarus as the main element of the “Belt and road” initiative in Eastern Europe. Amid growing geopolitical pressure from Russia on Belarus in the context of the so-called integration ultimatum and coercion to deep integration, China plays an important role in terms of military-political and economic support for the national independence and sovereignty of Belarus. Preserving Belarus as an independent and stable state is China’s strategic interest.
However, despite the very high level of military-political interaction between Belarus and China, the level of trade and economic relations is still unsatisfactory from the point of view of the Belarusian authorities. The main problems are the growing negative balance of bilateral trade (at the end of 2018 it was USD 2.77 billion, with imports of USD 3.16 billion and exports of USD 0.39 billion); a number of failed projects (unsuccessful modernization of the Svetlahorsk pulp and paper mill, breaking deadlines for the construction of a cardboard factory in Dobrush, violations during the construction of the Battery Plant in Brest); low quality and quantity of Chinese investments, mainly “tied” Chinese loans, etc. However, these are mostly individual examples. These problems are largely due to the lack of professional Belarusian negotiators and experts, who understand how to provide methodological, analytical and legal support for cooperation with China.
In most cases, cooperation is quite successful. With financial support from Chinese banks, Belarus is implementing or has already implemented over 30 large infrastructure and investment projects in the field of transport, energy, industry worth more than USD 8 billion. Against the background of a shortage of financial and technological resources, Belarus is interested in modernizing the Belarusian industry and implementing a number of infrastructure projects. The key to success, in particular to improving the quality and increasing the number of Chinese investments, is understanding the strategic intentions of China in Central and Eastern Europe in the framework of the “Belt and road” initiative, which is gaining access to the European market through countries that have a high level of trade and economic and institutional cooperation with the EU.
Therefore, in order to use the even greater potential of bilateral cooperation, Belarus also has to do serious homework both in terms of hedging political and economic risks, conducting internal economic reforms, and gaining access to promising sales markets, primarily Western ones. Still, China sees Belarus as a window to the European market, the “Belt and road” initiative itself is aimed, among other things, at deepening economic cooperation with the EU. Therefore, it is quite logical that China determines the quality and quantity of its investments in the “Great Stone” industrial park by how successfully Belarus builds trade and economic relations with the EU. It can be said that China is pushing Belarus toward a rapprochement with the EU and to the implementation of its own version of the “policy of openness and reform”, which Deng Xiaoping launched in the PRC in the 1970s.
Finally, China will intensify and deepen cooperation with Minsk only as Belarus strives to strengthen its national sovereignty and independence in the face of increasing pressure from Russia and the Kremlin’s “integration ultimatum”. China still does not need one more broken large-scale plan (after Ukraine). Therefore, China will retain strategic interest in Belarus as much as Minsk will ensure its own political stability and security, as well as a predictable foreign policy environment (a way out of foreign political isolation in relations with the West, avoiding a full-blown crisis in relations with Russia).
If these conditions are fulfilled, it can be expected that the Belarusian-Chinese military cooperation will also expand and deepen. This is quite logical, taking into account the desire of Beijing to protect its largescale investments in Belarus. Against the background of a reduction in military-technical cooperation with Russia, Moscow’s reluctance to supply modern models of military equipment and weapons to Belarus, the interaction of the military-industrial complexes of China and Belarus will intensify. In addition to the development of satellite and missile programs, the ways of possible cooperation can include the creation of antiaircraft missile systems and air defence/missile defence systems, and the production of heavy combat UAVs. It is likely that if the Belarus and China find the optimal scheme for cooperation and profit sharing, we can expect the creation of joint ventures in military industry on the territory of the “Great Stone”.
Cover: tut.by
VARTA Belarus security magazine (November 2019)