On the peculiarities of doing business in China, joint projects and prospects for cooperation

In early March, the President of Belarus paid a state visit to the People's Republic of CHINA, where he held official talks with the Chairman and top officials of the PRC. Deputy Minister of Economy Alesya Abramenko told BelTA about the agreements reached, joint projects, peculiarities of doing business in China, as well as about the prospects for further cooperation.

- Alesya Nikolaevna, how do you assess the current level of development of trade and economic cooperation between Belarus and China?

- Belarus and China have entered a new stage of cooperation, raising the level of relations to an all-weather and comprehensive strategic partnership. This step confirms the common desire to deepen bilateral cooperation in all areas.

China is our most important strategic partner. Over the past year, the mutual trade turnover reached $5.8 billion, exports amounted to $1.6 billion. The number of accredited domestic enterprises to work in the Chinese market is constantly growing.

The economic content of the state visit to China, the signed package of documents indicates that China, like Belarus, is striving for openness and building up trade and economic cooperation.

Particular emphasis is placed on strengthening interregional cooperation: the extension of the Year of the Regions of Belarus and China has been announced . The corresponding action plan contains more than 80 bilateral agreements and initiatives. In fact, it is the basis for the implementation of the Directive of the President of the Republic of Belarus to attract at least $150 million of direct Chinese investments by each region and MINSK by 2026.

During the state visit, an agreement was also signed between the Ministry of Economy of Belarus and the Ministry of Commerce of the People's Republic of China on deepening trade and economic cooperation between the regions of the Republic of Belarus and the People's Republic of China. The document establishes the priority areas of trade and economic cooperation between Belarus and the cities of Tianjin, Qingdao and Chongqing - major economic and logistics centers of China.

- What goods, services from Belarus are now most in demand in China?

- Over the past year, the EXPORT of our goods to China has almost doubled. In my opinion, this is the best demonstration of the demand for Belarusian products. The interest of domestic enterprises in the growing and capacious Chinese market is also increasing.

Last year, we significantly increased in poultry MEAT (3 times), rapeseed oil (3.1), MILK and cream (1.4), timber (1.6). Currently, 148 Belarusian manufacturers are accredited for deliveries to China in 171 categories of goods.

The main export items also include potash fertilizers, cellulose, integrated circuits, polyamides, etc.

As for the service sector, in fact, foreign trade in services with China is formed by five types: these are transport, construction, educational, ICT, and other business services. It should be noted that last year there was an increase in services in the field of tourism, culture and recreation, even despite the protracted period of the pandemic.

At the final stage - preparation of a draft agreement on trade in services and investment between Belarus and China, which will optimize certain trade procedures, create a free trade area in services between the two countries. A memorandum of understanding was signed between the Ministry of Economy of Belarus and the Ministry of Commerce of China on the completion of negotiations on the text of the agreement. In fact, we have become one step closer to signing the main document. We plan that this significant event will take place this year.

- What are the prospects for investment cooperation?

- With China, we are aimed at creating joint innovative production facilities. A well-developed engineering base, a modern system for training highly qualified personnel, many years of advanced experience of leading Belarusian design bureaus - all this forms the basis of future high-tech industries.

Last year, over $100 million was invested by Chinese investors in the implementation of projects in Belarus. Over 40 projects were implemented with the participation of Chinese companies. Currently, about 20 more promising initiatives are being developed.

Traditionally, the industrial park "Great Stone" is the center of attraction for Chinese and international investments. Over $820 million has already been invested in the project, 107 residents from 15 countries with high-tech projects worth $1.3 billion have been registered.

- Continuing the topic… The Chinese-Belarusian industrial park "Great Stone" is one of the largest joint projects. How does it develop in modern conditions?

- The industrial park is not just a large-scale joint project, it is a huge opportunity for doing business on the Belt and Road platform. The development of the park does not stop.

Over the past year, by 2021, production volumes have grown by 1.5 times, proceeds from the sale of goods by 1.9 times, exports by 1.3 times, taxes, fees and payments paid by residents by 2.2 times. Investments in fixed assets exceeded Br120 million.

In total, about $320 million was spent on the infrastructure of the park. To date, more than 70 buildings and structures have been built on its territory. Another 14 facilities are on the way, and design and survey work is underway for 20.

Last year, Belarusian resident enterprises launched the production of glasses for all types of land transport, innovative photographic printed products, automated process control systems in industry and energy. The scientific and technological park "InKata" was put into operation, where companies engaged in scientific research and experimental development are located.

- How would you characterize the level of Belarusian-Chinese relations in the industrial sphere? How successful is scientific and technical cooperation?

- Industry is one of the most promising areas for the Chinese side in terms of developing joint business with Belarusian partners. Recently, the industrial departments of the two countries developed and signed a Comprehensive Strategy for Joint Industrial Development, which provides for the creation of incentive mechanisms for Belarusian and Chinese enterprises to intensify and strengthen their technological cooperation. A roadmap has been prepared for its implementation with specific projects and initiatives. It is planned to create joint ventures in China, use Chinese technologies and competencies to modernize Belarusian production facilities and attract Chinese investments to implement projects in Belarus.

Scientific and technical cooperation as the basis for the development of all other sectors of the economy is also among the key ones. A whole block of events of the Year of the Regions of Belarus and China is devoted to this issue. It is important to note that a quarter of the projects of the Great Stone Industrial Park residents are implemented in the field of R&D. The Chinese-Belarusian Innovation Center for Cooperation in the Transformation of Scientific and Technological Achievements also functions there. This is a comprehensive platform for innovative entrepreneurship, the creation of research laboratories, zones for incubation and acceleration of start-ups, testing centers and small-scale production.

- What other projects would you note among the most important in the trade and economic cooperation between Belarus and China?

- The construction of a closed-cycle agro-industrial complex of BNBK CJSC deserves special attention. The launch of the project marked the creation of a new industry of industrial biotechnology in the country and testifies to the highest relations between Belarus and China.

Currently, all facilities are put into operation. The company manufactures products that meet international standards: amino acids (lysine, threonine, tryptophan), animal feed and premixes. Long-term export contracts have been signed.

It is necessary to mention the most important Belarusian-Chinese project for the assembly of Geely cars on the basis of SZAO "BELGI". Over the past years, cars of this brand have taken a leading position in the Belarusian market. In 2023, it is planned to produce and sell 38 thousand cars in the markets of RUSSIA and Belarus. This is 35% more than last year.

- Recently, e-commerce tools have been actively used. In particular, last year the first National Electronic Pavilion of Belarusian Goods was opened on the JD.com and Douyin platforms. What prospects did it open for Belarusian enterprises?

- The first National Electronic Pavilion of Belarusian goods on the Chinese electronic platforms "DingDong" and "Dowin" opened in July last year, and the number of subscribers of the pavilion on the platform "Dowin" has already exceeded 800,000. More than 180,000 orders have been placed for about 150,000 buyers . Chocolate and confectionery, biscuits, juices and ALCOHOL , powdered milk are sold well .

To expand the coverage of the pavilion, work is underway with 7 new major electronic trading platforms in China. In September last year, a memorandum of cooperation was signed between the Ministry of Economy of Belarus and the Ministry of Commerce of the PRC in the field of electronic commerce, which will further enhance trade and economic cooperation with China using new trade mechanisms.

- How does Belarusian business work in China? Are there any peculiarities of doing business with Chinese partners? What difficulties do you have to face?

- The volume and pace of trade interaction between the countries demonstrate the desire and interest of the Belarusian business to work in the Chinese market. Despite the significant geographical distance and difficult supply chains under the sanctions, cooperation between the business circles of our countries is advancing.

Due to the high level of political partnership, there is a steady growth and development of joint trade and economic initiatives. Undoubtedly, the Chinese market has its own characteristics, rules, requirements and preferences. But if we do not move forward and do not resist the emerging challenges, the niches and promising areas open to us will gladly be occupied by other countries.

Of course, the last few years have not been easy. The pandemic and a number of economic restrictions have complicated the work of enterprises, especially logistics and settlements. However, the government of Belarus has taken prompt measures to optimize and establish routes, to maximize the load of rail and road transport. We also worked on mutual payments: we more often use national currencies, the Chinese yuan in settlements, and connected to the CIPS international settlement system.

- How do you assess the prospects for bilateral cooperation? What areas have untapped potential?

- Our countries have a great unrealized potential in various fields, but above all in trade and economic cooperation. This year, we have every chance to increase exports to $2.2 billion, significantly increase the supply of food, fertilizers, and woodworking products.

The economic challenges associated with the withdrawal of Western companies from the Russian and Belarusian markets create advantages for Chinese business, in particular, in the field of localization of the production of medical and technological equipment, transport, and agriculture.

Within the framework of interregional cooperation, it is very promising to develop production and logistics initiatives with the city of Tianjin, production and medical - with the city of Qingdao. Belarus and Chongqing have a good base for the development of e-commerce, industrial and agricultural cooperation.

In addition, the plans are to effectively use the dialogue platform of the Shanghai Cooperation Organization, the benefits of the global development initiative, etc.

BELTA.