Belarus intensifies cooperation with China

Chinese government decided to provide Belarus with a soft loan of USD 1 billion, as well as with Yuan 70 million of a gratuitous grant. Chinese money can be spent on the modernization of factories and infrastructure, for implementation of a multi-vector privatization policy and to demonstrate competition.

A Chinese governmental delegation visited Belarus. As a result of the visit a series of agreements on the establishment of Sino-Belarus industrial park, on economic and technological cooperation have been signed by the governments, as well as a framework agreement between the Government of Belarus and the Export-Import Bank of China on financial cooperation in the area of privatization and attracting Chinese investments to the Republic of Belarus in 2011-2012, inter alia, a number of investment agreements.

The Chinese government decided to provide Belarus with a soft loan of USD 1 billion for implementation of the existing joint projects, as well as with Yuan 70 million of a gratuitous grant.

Comment

The authorities are trying to diversify portfolio of potential investors in the privatization process.

Belarus needs the loan money for the modernization of industry and infrastructure. Therefore regardless of the fact that the Chinese loans are conditional their importance should not be underestimated. The authorities are trying to diversify portfolio of potential investors in the privatization process. Regardless of everything, Russian investors are trying to bring down the prices for the Belarus assets, buying small objects in the regions. China may become a competitor, allowing keeping the prices up. However, the dependence of the Belarusian leadership on Russia is too significant, challenging the efficiency of the Eastern dimension.