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Apr 18, 2012 | 12:52 GMT

4 mins read

China and Belarus' Interests in Cooperating

Summary

China recently made $16 billion in credit lines available to Belarus for use on joint projects. Belarus' continuing dependence on Russia, its traditional patron for energy and economic assistance, coupled with economic sanctions from the West have left Minsk with few options to help it balance between Russia and the West. This increasing cooperation with China will give Belarus a new opportunity to carry out its strategy of balance.

Belarus' geographic location — between Russia and NATO and EU member Poland — makes it important to Russia's geopolitical interests. It serves as a buffer against Western expansion and as a transit country for Russia's energy flows to Europe (20 percent of Russian natural gas and approximately 30 percent of Russian oil exports travel through Belarus to Europe).

Meanwhile, 
Belarus depends on Russia for its economic and energy needs. Russia provides more than 80 percent of Belarus' oil imports and more than 90 percent of its natural gas consumption annually. Russia is also the destination market for roughly 50 percent of Belarus' exports. However, the Belarusian government does not want to be entirely dependent on Russia and in the past has flirted with Europe and the West to show Moscow that it has other options.

Russian aid has become more important for the struggling Belarusian economy since the West imposed sanctions on Minsk after elections and a crackdown on the opposition at the end of 2010. These ongoing sanctions have hurt Belarus by leaving Minsk with fewer options for economic partnership and weakening Belarus' position relative to Russia in negotiations. 

The sanctions have also made Minsk more susceptible to Moscow's economic influence. For example, Russia gained a 100 percent stake in Beltransgaz, the Belarusian natural gas transit company, in 2011 in exchange for a $14 billion rescue plan for Minsk. Unhappy with this situation, the Belarusian government has been looking for an alternative power to reach out to in order to sustain itself economically and counter Russia's influence. Recently, Belarus has looked to China to fill its needs.

For Belarus, China is an ideal alternative to Europe because of its large economy, surplus of cash, potential opportunities for partnership and investments in some of Belarus' strategic sectors. China's commercial interest in Belarus is ongoing and holds a great deal of promise for economic cooperation. China initiated $10 billion in investments and $5.7 billion in loans for Belarus in 2010. China also sees opportunities in Belarus' key state-controlled industries and is bidding to construct power plants in Belarus. Furthermore, China, which consumes approximately one-third of the world's supply of commercial fertilizers, has expressed interest in acquiring a stake in Belarus' state-owned potash firm Belaruskali.

Besides showing keen interest in helping Belarus economically, China has an advantage in that its investments do not come with pro-democratic political obligations and it does not have the same kind of interest as Europe in interfering in Belarusian domestic affairs. Thus, China is a useful economic partner for Belarus, both as a replacement for Europe and as an economic aid during a time of crisis.

For its part, China's leadership is aware of Russia's strength and its own limitations in Belarus and thus knows it is not a viable option to seriously challenge Russia strategically in Belarus. Unlike the former Soviet states in Central Asia, Belarus is not essential to China's geopolitical interests and is far from China's borders. China's interests in Belarus will be largely limited to commercial and business interests similar to those it has around the world (including in Ukraine). Although China's interests in Belarus are clear-cut, other players such as Russia and India have expressed interest in the same projects China is considering. Thus, it is unclear whether and when the larger long-term economic projects will be completed.

China's investments in and loans to Belarus are important in the context of the sanctions from Europe and Minsk's desire to find a counterbalance to Russia's influence. Although Belarus and China could deepen their cooperation — doing so would benefit China commercially and Belarus geopolitically — any further cooperation is unlikely to threaten Russia's established economic, political and security dominance in Belarus.

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