Belarus-China trade may exceed pre-crisis level in 2010

13 September 2010

MINSK (BelTA) – The bilateral trade between Belarus and China in 2010 may exceed its pre-crisis level, said Belarus First Deputy Prime Minister Vladimir Semashko as he met with Jiang Shusheng, Vice Chairman of the Standing Committee of the National People's Congress of China on 13 September.

Vladimir Semashko said that in 1990 Belarusian-Chinese trade turnover made up $34 million. In 2008 the figure was $2.2 billion. In 2009, amid the crisis, the bilateral trade plummeted, but the results of H1 prove that trade turnover in 2010 may be the same as in 2008 and even exceed this figure,” said Vladimir Semashko. He added that $2.2 billion is not a big figure and it can be increased.

China is one of Belarus’ major trade partners of. In 2009 China was 5th in the list of Belarus’ foreign trade partners (11th in terms of export and 2nd in terms of import).

The main items of Belarusian export to China are potash fertilizers, caprolactam, dump trucks and spare parts, integrated circuits and chip assemblies, and chemicals. The main items of Chinese export are equipment, complementary parts and materials for the export-oriented Belarusian companies, and consumer goods.

Speaking on Belarus-China investment cooperation, Vladimir Semashko said that the previous year the two countries established a number of joint ventures on the basis of such strategic Belarusian companies as BelAZ, Gomselmash and MTZ.

The investment cooperation intensified in 2008-2010. The two countries are utilizing the direct investments. In 2008 a Midea-Horizont joint home appliances manufacturing venture was established. In 2009, the Chinese co-founder increased its stake in the company from 30% to 55%. In 2010 the Minsk Wheel Tractor Plant and the Chinese company of Xingjian established the Volat-Xingjian joint company, thus extending their successful cooperation (in 1997 the two companies created a joint venture, the Xingjian-Volat Company Ltd., in China).

In recent years Belarus and China has considerably increased the establishment of joint ventures in China. In 2009 the Avik-BelAZ Mine Trucks (founded by BelAZ and Caltic Supply corporation), and the Harbin Dongjin Gomel joint venture for assembling Belarusian forage harvesters were founded in China. In August 2010 a joint company, producing power intensive Belarus tractors was registered in Harbin.

The sides have also speeded up the implementation of the following investment projects: the establishment of a multifunctional facility China Town in Minsk, the construction of Minsk’s residential area, Lebyazhy and the Beijing hotel.

In 2010 the sides started working on the project of a special industrial zone for Chinese investors in Belarus. The sides are now looking for the Chinese companies who would like to invest in this zone.

The cooperation in credit and financial sectors has been vibrant of late. “Belarus has obtained big credit lines from China and has launched big projects including the construction of cement works, upgrade of CHP plants,” Vladimir Semashko said.

“Today we are discussing new projects, which are estimated to total $15 billion. The President of Belarus is scheduled to visit the People’s Republic of China in the second half of October. In this connection, the Belarusian government is taking every effort to make sure that the agreements regarding at least 15 projects are signed during the visit,” Vladimir Semashko said. The First Vice Premier informed that the Deputy Economy Minister and Deputy Finance Ministry of Belarus have recently visited China. They held talks with individual Chinese banks and reached certain agreements on joint projects. At the same time a number of small issues emerged in the course of the preparatory work. But they can be resolved in a routine manner, Vladimir Semashko noted.

In 2008, the work was completed on the establishment of the mobile operator “Best” in partnership with Chinese Alcatel Shanghai Bell Company Limited ($50mn preferential governmental loan and $184mn credit from China Eximbank).

China National Corporation for Overseas Economic Cooperation started on the modernization of te Minsk CHP plant 2 in 2007, ($42mn preferential credit of the Government of China), and Minsk CHP plant 5 in 2009 (€260 million credit of the State Development Bank of China).

China’s CITIC International began upgrading the cement industry of Belarus in 2009 ($500 million loan from China Eximbank and the government soft loan of $30 million).

In 2009 a contract was signed with the Chinese XY Group to build a particle board production line at the Fandok company (a $9.1mn loan from China CITIC Bank).

The National Bank of Belarus and the People's Bank of China signed a swap agreement on the exchange of national currencies ($3 billion in equivalent) in Minsk in March 2009. To implement this agreement, the central banks of the two countries signed an agreement on the organization of settlements, allowing using national currencies in bilateral settlements in March 2010.

In December 2009, the Government of Belarus and the Export-Import Bank of China signed a framework agreement on development of long-term comprehensive cooperation. According to the agreement, the Export-Import Bank opened a credit line of $5.7 billion for the Government of Belarus to finance several investment projects in Belarus with the participation of Chinese companies.

A framework agreement on financial cooperation between the Finance Ministry of Belarus and the China Development Bank was signed in Minsk in March 2010. Under the agreement, the Chinese bank opened an $8.3-billion credit line to the Belarusian Finance Ministry.

A general agreement on $1-billion preferential consumer loan from the Export/Import Bank of China for the Belarusian government was signed in Beijing in June 2010.

The participants of the meeting stressed that the sci-tech cooperation between Belarus and China have been steadily developing. “We are currently discussing an opening of a Belarusian-Chinese technopark jointly with Sinomach,” he said. The preparation of the necessary documentation is underway.

Minsk hosted the Days of Chinese Science and Technologies in June 2008 where over 120 latest achievements in biotechnology, electronics, transport and resource-saving were displayed. In October 2009 the Belarusian National Technical University held an exhibition, Chinese technologies, equipment and materials for Belarusian companies. A general agreement on the first Belarusian-Chinese innovation center was signed in Harbin in November 2009. In July 2010 Minsk played a host to a scientific and technical week of the Province of Guangdong.

Regional cooperation is vital for intensifying the bilateral sci-tech cooperation. Relationship between Belarus and the North-Eastern Province of Heilongjiang can be cited as a good example of such cooperation. A delegation of the National Academy of Sciences of Belarus and Belarusian leading universities has been taking regular part in the Harbin annual sci-tech exhibition since 2007.

Vladimir Semashko also pointed to the prospects of further bilateral cooperation within the Customs Union of Belarus, Russia and Kazakhstan. “If Chinese companies come to Belarus they will be able to work on the Customs Union market,” the First Deputy Prime Minister said. A wide package of documents on the single economic space is to be signed by 2011, according to him.

Vice Chairman of the Standing Committee of the National People's Congress of China Jiang Shusheng stated that apart from economic cooperation China is also interested in developing humanitarian relations with Belarus. “We need humanitarian contacts. We believe that the relations in education and culture will promote all-round cooperation between Belarus and China,” he said.

Ministry of Foreign Affairs of the Republic of Belarus