Belarus chasing Chinese cash

By bne IntelliNews July 17, 2013

bne -

Scouting for Chinese cash to help stave off a slide into another severe crisis, Belarus President Alexander Lukashenko has overseen the signing of 36 agreements worth $1.5bn during his current visit to Beijing, Minsk announced on July 17.

"During the visit 36 documents have been signed. They run the gamut from projects and agreements to memorandums and boast the total value of $1.5bn," Foreign Minister Vladimir Makei told reporters, according to Belta. "What is most important is that these are not some ephemeral memoranda of intent but concrete projects, agreements and investments that will begin working for the benefit of the peoples of our countries literally tomorrow."

The agreements are related to cooperation in space and defense technologies, and the industrial and financial sectors, reports BTR. Even more importantly for Minsk, the Chinese have agreed to supply Belarus with a soft loan of $323m to finance construction of a nuclear power plant being built by Russia.

Belarus' efforts to cozy up to Beijing come as its economy is in increasingly dire straights. Hard currency and exports are falling, moving the it closer to default and devaluation. Minsk badly needs cash to alleviate the pressure, and China - with the world's largest sovereign reserves - has plenty.

Little wonder then that Lukashenko has suggested elaborating a road map of bilateral cooperation, and he will have taken heart from comments from Chinese President Xi Jinping. "Our relations are advancing steadily, step by step. At present our relations have reached an unprecedentedly high level.," Xi said, according to Prime A new age of the rapid development of the bilateral relations has begun."

However, Beijing is notorious for playing hardball with those eyeing its money pile. While it has been happy to move closer to many countries of the Commonwealth of Independent States (CIS) to tap their natural resource base to feed its factories, Belarus has few raw materials to offer, apart from potash.

That has seen China set up the Chinese-Belarusian Industrial Park (CBIP) in Minsk, designed to act as a manufacturing bridgehead into Europe - whose markets it has lusted after for some years. One of the agreements signed by the two leaders will see an associated park established in the Chinese city of Harbin.

Makei underlined the importance Belarus attaches to its president's visit. "Today we see that China is a quickly developing country, a space power and one of the stabilizing poles of power. In the future it will be the leading world's power from technological, military and political point of view," the minister said, without mentioning it's vast horde of ready cash.

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