Lukashenko Turns Belorussia into Beijing Regime's Province
The total scale of Chinese interventions in the Belarusian economy is hard to estimate. But it includes the number of interstate loans, private investments, government guarantees, and other financial constructs that may not be repayable by the small country.
On January 26, Belorussian dictator Mr. Alexander Lukashenko spoke on the telephone with First Secretary Chinese Communist Party, Mr. Xi Jinping. Mr. Xi, according to Minsk, promised him delivery of the Chinese anti-Wuhan virus vaccine. Chinese will send as many vaccines as is needed, a Belorussian official stated. However, as usual, Mr. Lukashenko had to make a political declaration that denies everything that the majority of Belorussians stand for. Belarus firmly stands with China on issues involving China's core interests such as Hong Kong, Taiwan, and Xinjiang, and firmly opposes all external interference, Mr. Lukashenko stated according to Communist China's readout.
Mr. Lukashenko does make such declarations whenever Beijing is calling. But also organises common drills of a Belorussian army with the Chinese army and Chinese armed police since at least 2017.
In the last ten years, the regime of Alexander Lukashenko made Belorussia dependent on one country. It has never occurred in its short history of independence. That country is Communist China. Only in the last five years, it invested the US $ 20-25 billion into the Belorussian economy.
But nobody has any illusions: Chinese money is destroying the Belarusian economy at high speed rather than stimulating its growth.
Just after falsified elections, on August 20 last year, Belkali-Migao LLC started construction of the first plant in Belarus for the production of potassium nitrate with a capacity of 160,000 tons per year. The volume of investments in the plant is the US $ 130 million, which will be invested by the Chinese investor, the Migao Corporation that controls 51 per cent of the project. The share of its Belarusian partner, JSC Belaruskaliy is 49 per cent.
In January last year, a big Chinese corporation from the Gansu province Sigicop begun construction of its own transport and logistics complex on the Western Belarusian border. The value of the investment, according to experts, is not less than the US $100 million. And it is not the first such Chinese logistics centre in Belarus.
Trade deficit and Inflated Real Estate Prices
With such investments, Chinese firms are colonising the local real estate market pumping up prices of average office spaces or construction areas. Chinese who are are moving to Belorussia en masse need to live somewhere. In the capital of Belorussia, Minsk, local authorities unconditionally vacate the areas they have designated for Chinese investors, shutting down operating enterprises and evicting residents, which causes more and more indignation in the Belarusian society.
The disparity in trade with Communist China so typical for such agreements with weaker nations is visible. The annual growth of trade turnover between Belarus and China is 10–20 per cent, with a colossal shift in favor of China.
In the first quarter of 2018, the trade turnover amounted to the US $ 1.335 billion, of which Belarusian exports constituted the only US $ 158.3 million, but Chinese imports were at the US $ 1.176 billion. In 2017, Belorussia-China exports rose to $ 362.7 million, or 1.2 per cent of the total volume. But the import of goods to Belarus from China - $ 2743.74 million, or 8 per cent of the total volume of Belarusian merchandise imports.
Communist China buys in Belorussia almost exclusively saline salt. But it imports its cheap consumer goods in huge quantities, thereby confidently killing the light industry of Belorussia itself. Hence, the outflow of currency from the country follows. Over the past five years, an average of over $ 2 billion a year has flown from Belorussia to China.
What about Chinese loans that first attracted corrupted, as Transparency International not once documented, Belorussian regime?
Unlike the credit lines offered by the International Monetary Fund, European Bank of Research and Development, and other international institutions, Beijing issues loans that are not dependent on political and economic reforms in the recipient country. The Belarusian leadership found it very beneficial because it is regularly imposed under Western sanctions for political repression. And it cannot get a new loan from the IMF because of its unwillingness to reform the economy.
Lukashenko realised rather late that the Chinese loans have other types of strong strings attached. The money itself was in Beijing banks Belarusian authorities could only purchase Chinese machinery and other goods and services in China. But to repay loans, it was necessary to give back in live currency or property.
Lukashenko repays Chinese loans with land
One of the conditions was the quota of 75 per cent of Chinese employees in new firms. Belorussia had to guarantee them visas for the period of employment and beyond.
Beijing tricked the Belorussian regime even to a greater extend. After five years since taking the first batch of loans, Minsk had to begin to repay them. Due to the lack of cash and gold, it was forced to sell the land under the train tracks. According to the reports, the land with two logistics centers looking like the airfields ready for combat helicopters and some areas, great strategic locations for other military bases, along the Western border, is also owned by the Beijing regime. The Lukashenko regime has also been repaying the debt with electric freight locomotives and a new train-track suitable for 9,000 tonnes cars and potentially for the train-based missile launchers. In the last five years, the transit of Chinese goods through the territory of Belarussia hiked by 250 per cent.
As a result, Communist China got what it wanted. It won a huge fortune. It has a country-wide logistics center, which is uncontrolled by any inspectors on the border with the European Union. And the Belarusian regime was silenced with investments and most probably bribes.