The 2023 Belarus-China Comprehensive Strategic Partnership
There’s plenty in the deal for Belarussian development as Lukashenko and Xi join market forces
By Chris Devonshire-Ellis
As I discussed last week, the Belarus President Alexander Lukashenko has been on a two-day State visit to China to meet with President Xi Jinping. Discussions overran, with plenty of detail to get into as the two countries cement ties.
While much of the Western media content dealt with political hearsay about the potential for China financing weapons via Belarus to pass to Russia in its conflict with Ukraine, underlying the meetings were rather more longer-term issues, not least as Belarus represents the Western-most border for China trade with the European Union. Logistics and transport were always going to be the major discussion points. Here I outline the details of the Belarus-China Comprehensive Strategic Partnership and the developments that this will bring into play.
Intergovernmental Cooperation Committee
Firstly, the two sides agreed to continue making full use of the common coordinating role of the Belarus-China intergovernmental cooperation committee. The fifth meeting of the intergovernmental committee is scheduled for this year. It is the institutional body that discusses and co-ordinates strategy and development between the two countries.
The sides also agreed to expand direct links between each other’s Ministries and government agencies for the sake of promptly resolving urgent issues of bilateral cooperation. This small sentence has some pertinence as there has been suggestions that Belarus may be absorbed by Russia and lose its independence. While there is no doubt that Belarus and Russia enjoy extremely close relations, the actions of the Chinese in stepping up Ministerial connections with Belarussian Ministries suggests that any absorption of Belarus into Russia is unlikely.
Belarus and China both stated they will make joint efforts to deepen comprehensive cooperation under the Belt and Road initiative, will continue to facilitate trade procedures between the two countries, unlock the potential of transit transportation, including between China and Europe by rail, and steadily increase bilateral trade. Belarus and China have agreed to continuously expand mutual investment and promote cooperation with assistance of the private sector and financial institutions.
This includes increased use of national currencies in bilateral cooperation in trade, investment, and finance.
The expansion of mutual direct investments, creation of joint high-tech innovative manufacturing enterprises, promotion of joint business between commercial entities of the two countries, encouragement of entrepreneurial initiatives are defined as priority avenues of cooperation, while China will accelerate the shipments of high-quality agricultural products from Belarus and China.
Great Stone Industrial Park
The sides will also jointly promote the development of the China-Belarus ‘Great Stone’ Industrial Park, situated close to Minsk airport. The Chinese side encourages large Chinese manufacturing and high-tech enterprises to start operating in the industrial park as resident companies. The Great Stone park (the author has visited the site) was intended to produce competitive auto vehicles for the Eastern European market. With Belarus now partially sanctioned by the EU, that role has had to shift.
What will probably happen is two-fold: Great Stone to be re-purposed for the production of certain auto components, and to link with other Chinese-owned auto manufacturing parks elsewhere within the Commonwealth of Independent States (CIS) of which Belarus, along with Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Turkmenistan and Uzbekistan. The CIS is a loose collection of ex-Soviet states that have Free Trade Agreements between each other (but not as a collective whole).
China has already invested in auto manufacturing plants in several of these, as it also has with Georgia, who Belarus also has trade agreements with. China will be looking at strategies to best utilize these agreements and which countries can provide the longer-term security in the manufacturing of specific components, with a direct eye on the EV auto market. Parks such as Great Stone are likely to be repositioned to create specific parts – either body work, or tires. Belarus already has a significant agricultural vehicle manufacturing industry and can make competitive vehicles ideal for emerging Asia’s agricultural needs.
Secondly, Belarus and China declared their readiness to advance cooperation in e-commerce and digital economy, and part of this industry could also be centered around the Great Stone facility.
Transportation & Logistics
Belarus and China will take steps to strengthen transport and logistics ties and speed up the processing of transported cargos. The sides will encourage Belarussian and Chinese air carriers to increase the number of direct flights from Belarus to China.
Interestingly, both declared in-depth trade and economic cooperation between Belarus and Chinese cities, in particular, Chongqing, Tianjin, and Qingdao. Chongqing is a large industrial city in the heartland of China’s Sichuan Province, and itself a significant agricultural and manufacturing hub. That suggests future Belarus-Chinese JVs in manufacturing agricultural vehicles and processing equipment, which can then be sold onto markets that China has specific access to. These include China’s free trade agreements with the ASEAN countries, including Vietnam, which Belarus already has a free trade deal of its own via the Eurasian Economic Union. That is significant as Vietnam has is also undergoing significant growth in its agriculture sector and needs development support.
While there’s nothing to stop Belarussian companies investing in Vietnam directly, they may feel more comfortable with a Chinese partner in doing so. China also has free trade agreements with India and the RCEP nations of Japan, South Korea, Australia and New Zealand. Lukashenko will have had his eyes on getting Belarussian exports to all of these markets.
Tianjin and Qingdao are ports on China’s Eastern seaboard and give direct access to the East Asian markets of Japan and South Korea and as such fit in directly with Belarussian eyes and trade policy looking east.
Belarus and China stated they intend to encourage the creation of joint scientific research centers, laboratories and other platforms, to increase funding for projects within the framework of scientific and technological cooperation, and to promote joint research and development of new technologies, including in the field of artificial intelligence and 5G.
The top-priority measures for the development of cooperation in innovation are the deployment of joint research and innovation activities. The sides support the creation of joint centers and enterprises for commercialization of scientific and technological achievements of the two countries.
Belarus and China also intend to expand cooperation between experts and analysts in various formats.
Defense & Security
Judging from the text of the joint statement, Belarus and China will strengthen cooperation in defense, law enforcement and security, will deepen cooperation including in the training of military personnel, joint the fight against transnational and terrorist crimes and terrorism, and will fight against color revolutions together.
This last piece is a statement aimed at the attempts to destabilize Belarus in 2020, with the EU in particular involved in instigating mass protests against the Belarussian government after elections were declared invalid. Brussels attempted to impose its rule of law over Minsk.
Quite where else the defense issue went as concerns Russia and Ukraine is unknown, however Belarus has serious weapons smuggling issues on the border with Ukraine, and the anti-terror aspect of this will be related to internal security against a southern neighbour whose immediate future is becoming increasingly erratic and lawless.
Belarus and China also intend to step up exchange and cooperation in disaster prevention and mitigation.
Belarus and China are to intensify cooperation on green, low-carbon and sustainable development. This includes strengthening cooperation on the creation of statistical systems for recording and monitoring greenhouse gas emissions, on the creation of a greenhouse gas emissions trading market, on the promotion of adaptation to climate change, and on the implementation of green financing.
Culture & Education
Belarus and China declared their readiness to further intensify cultural and humanitarian exchanges and expand practical cooperation in culture, tourism, sport, movie industry, television, mass media, and other areas. The two countries will continue supporting students in learning each other’s national languages and expanding cooperation in language teaching. The sides will create a regional center for Chinese studies in Belarus.
The statement reads that the Belarussian side supports the common values of peace, development, equality, justice, democracy, and freedom proposed by China. The sides will jointly support the international system with the United Nations Organization at its core and follow basic norms of international relations based on goals and principles of the UN Charter.
Belarus and China strongly oppose any manifestations of hegemonism and brute force policies, including illegitimate unilateral sanctions and coercive measures.
The sides strongly condemn any alternative international rules, procedures and mechanisms that undermine fundamental provisions of the UN Charter. In addition, the intention to provide mutual support to mitigate negative consequences of unlawful unilateral coercive measures has been reaffirmed.
Belarus and China are also deeply concerned about the development of the armed conflict in the European region and are extremely interested in the establishment of peace in Ukraine as soon as possible. Belarus and China are interested in preventing an escalation of the crisis and are ready to make efforts to restore regional peace and order.
Belarus also supports the global security initiative proposed by China. Belarus and China agreed to strengthen cooperation within the framework of the global security initiative and jointly confront such global challenges as terrorism, climate change, and cyber and biosecurity.
Expedited SCO Membership
The two sides will continue comprehensive cooperation within the framework of multilateral structures such as the Shanghai Cooperation Organization and the Conference on Interaction and Confidence-Building Measures in Asia. China supports the accelerated accession of Belarus to the Shanghai Cooperation Organization as a full member.
While Western analysts can pore over the ‘Peace’ angle – typically done with jaundiced eyes – the longer-term impacts are the reining in of Belarus to be very much part of China (and Russia’s) orbit. This means there will be no repeat of the West’s attempts to subjugate Belarus into being part of the European Union bloc. It also means that should a new Cold War come into being as a result of the current impasse between East and West – or China and Russia versus the European Union and United States – then aside from Russia, Belarus will be part of the de facto border, along with the Baltic States, to the north, and Romania.
Until the Ukraine situation is settled, that section remains entirely fluid.
In reaching an agreement of this type with China, coupled with Russia’s considerable support, Lukashenko has effectively both guaranteed the survival of Belarus as an independent country, and tied its fortunes to the East. While the situation in Ukraine continues to be a significant concern, the Belarussian borders themselves have received a significant boost, as has the countries immediate productivity future. With access to inexpensive Russian energy, significant experience in agriculture (Belarus is not just an agricultural manufacturing hub, it is also one of the world’s largest producers of fertilizers) and an inexpensive labour force,
Lukashenko has managed to turn what were seriously difficult times just three years ago into a win for the nation. Asia is hungry for Belarussian products and has a huge market. Linking up with Russia for energy and military support and China for Asian market access is likely to make Belarus an investment hotspot in the near future.
Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates. The firm assists foreign investors, including from Belarus, into markets throughout Asia. For assistance, please email firstname.lastname@example.org
During these uncertain times and with sanctions in place, our firm helps Russian companies relocate to Asia. We also provide financial and sanctions compliance services to foreign companies operating in Russia. Additionally, we offer market research and advisory services to foreign exporters interested in doing business in Russia as the economy looks to replace Western-sourced products. For assistance please email email@example.com or visit www.dezshira.com