China-Belarus Industrial Park

The China-Belarus Industrial Park (Russian: Китайско-Белорусский индустриальный парк, Chinese: 中国-白俄罗斯工业园) is a special economic zone in Belarus,^[1] established under the intergovernmental agreement between the People’s Republic of China and the Republic of Belarus.^[2] The industrial park was created in the territory of Smolevichsky district, Minsk region, near the Minsk National Airport.

History

The China-Singapore Suzhou Industrial Park has become the prototype of the China-Belarus industrial park.^[3] In 2010, the Ministry of Economy of the Republic of Belarus and the «Chinese Engineering Corporation CAMC (CAMCE)» agreed to cooperate on the creation of a China-Belarus Industrial Park in the territory of the Republic of Belarus.^[4] In November 2011, the park was also discussed at the meeting of the Belarusian-Chinese intergovernmental commission.^[5] For the initial creation of the park the following documents were developed and signed:

• Cooperation agreement on the establishment of the China-Belarus Industrial Park in the territory of the Republic of Belarus between the Ministry of Economy of the Republic of Belarus and the «China Engineering Corporation CAMC (CAMCE)», dated October 11, 2010.
• Agreement between the Government of the Republic of Belarus and the Government of the People’s Republic of China about the participatory development of the China-Belarus Industrial Park from the 18th of September, 2011 (ratified by both countries and entered into effect on the 30th of January, 2012).
• On June 5, 2012 the President of Belarus, Alexander Lukashenko, signed decree № 253 «On the China-Belarus Industrial Park».^[6]

Documents to establish a joint venture for the development of the park were signed in Minsk on August 27, 2012.^[7] As a result, a China-Belarus JSC «Industrial Park Development Company» (IPDC)^[8] was established. The company was incorporated with a registered capital of $10 million.^[8] In April 2013, presentations of the park were held in the Chinese cities of Harbin and Guangzhou.^[9][10] On the 4th of June, 2013, the Government of Belarus approved the master plan of the Park (Resolution number 447).^[11] In July 2013, a government delegation from Harbin visited Minsk for negotiations on participation in the capital of the management company of China-Belarus Industrial Park.^[12] The talks involved Economy Minister Nikolai Snopkow.^[13] A group of businessmen from the southern Chinese province of Guangdong also declared their intention to participate in the development of the project.^[14] July 17, 2013, Alexander Lukashenko, at a meeting in Beijing with Premier of the State Council of the PRC Li Keqiang, asked the Chinese government «to provide maximum assistance» in the development of the industrial park.^[15]

Description

The park is located 25 km from Minsk^[14] and comprises 8,048 hectares of the Smolevichsky area between the Petrovichi reservoir and the national airport "Minsk" (MSQ).

In this area a special legal regime is being introduced. The park is planned for high-tech and export-oriented production. According to Alexander Lukashenko, high-tech enterprises from all over the world and the «production of tomorrow» will be concentrated on this territory.^[16][17] The construction period of the park is 30 years, the number of employees: 120 thousand people. Park development will focus on electronics, biomedicine, fine chemistry, engineering and new materials.^[18] Planned markets are the CIS countries and the European Union.^[19]

The typical structure of an industrial park (China)

The infrastructure of the park will include industrial, transportation facilities, residential zones, including social sites,^[20] office and shopping complexes, and financial and scientific research centres.^[21] Within the territory it is planned to create separate sub-parks of Harbin City^[22] and Guangdong Province.^[23]

According to the British newspaper The Financial Times, Belarus plans to attract foreign investors into the project «through tax incentives, liberal laws regarding foreign ownership and a well-educated labour force».^[24]

According to the presidential decree, the park has the largest tax exemption in the country. For example, personal income in the form of wages received under the labour contracts from the joint management company and residents of the industrial park will be subject to income tax from individuals at the rate of 9%.^[25] Park residents are excused from paying three of the most important taxes: land tax, property tax and income tax.^[26][27] Residents are also exempt from the payment of customs duties when importing equipment. They will operate on a preferential policy for imports of materials and on payment of VAT and customs duties. An investor can get plots of land on the territory of the park for up to 99 years or purchase it as private property.^[21] The master plan of the park, as well as information about the benefits and guarantees of the residents are available to the public.^[21]

China-Belarus Industrial Park is the largest industrial park in Europe among the parks established by China.^[15] Singapore also plans to take part in the project.^[28][29][30]

Economy

Belarus plans to spend more than $500 million,^[20] the State Bank of China - $1.5 billion^[31] for the building of the infrastructure of the park. The estimated amount of direct investment in the project will amount to $2 billion, and as projected by the Embassy of China, may be increased to $5.5 billion.^[20] Russian and Singaporean investors are also involved in the project.^[15][32]

In the long term, the project might receive up to $30 billion worth of investment^[33] According to Alexander Lukashenko, the implementation of this project will allow receipt of up to an additional $50 billion annually from exports.^[24]

Governance

The geographical position of the China-Belarus Industrial Park (brown dot in the middle). EU is shown in green, China in red

The China-Belarus Industrial Park is managed by the State «Administration of the China-Belarus industrial park» (the leader – Alexander Ermak).^[34] The park administration is directly subordinated to the Government of Belarus and performs various administrative procedures based on the «one stop» principle. The China-Belarus joint JSC «Industrial Park Development Company»^[8][20] deals with attracting investment to the park, construction of infrastructure, real estate and land management, as well as a number of other functions. 60% of the shares are owned by China and 40% by Belarus:^[17][35]

• 60% is owned by CAMC Engineering Co. (CAMCE), a Chinese corporation^[8]
• 30% of the business belongs to the Minsk Regional Executive Committee,
• 10% is owned by «Horizont» holding.

Participants

Below is a partial list of the companies participating in the activities of the China-Belarus Industrial Park.

• China National Machinery Industry Corp (Sinomach).^[36] The company has more than 50 subsidiaries engaged in the export and import of equipment and the provision of services in the fields of telecommunications, metallurgy, shipbuilding, petrochemicals, machinery, and aerospace, among others.^[37] A plant for the production of cellulose, hydroelectric and two combined-cycle plants with a capacity of 400 MW each are being constructed at Lukolm and Bereza.^[38]
• ZTE Corporation^[39][40][41] is the second largest manufacturer of telecommunications equipment and mobile phones in China^[42]
• China Great Wall Industry Corporation^[34][41][43]
• CAMC Engineering Co. (CAMCE). The Company owns 60% of the share capital of JSC «Company for the development of the industrial park»^[8]

Criticism

The project has generated a number of critical objections in Belarus. The main conflict was caused by fears of the inhabitants of Smolevichsky district and Minsk by the possible demolition of property owned by citizens.^[44]

One of the leaders of the protest campaign, Andrey Dmitriev, noted that they succeeded in getting guarantees of property protection for citizens.^[45] The investment chief of the Ministry of the Economy, Kirill Koroteev, said that the lands of suburban cooperatives will not be confiscated without the consent of the landowner.^[46] Koroteev also noted that the 498 hectares of parkland will be reserved for green spaces and the industrial zone will be only 10% of the territory.^[20] According to his statement, the suggestions made during the public debate were taken into account in detail. In particular, there won’t be any polluting industries in the industrial park.^[20]

In response to criticism of the project, Alexander Lukashenko said:^[16] "There is no need to shout that there won’t be enough land or something else. Everyone will get everything. We will not infringe on or offend our people. If someone is uncomfortable about coexisting with this park, we will provide land for that person, with the best conditions, so as not to offend".

Alexander Lukashenko has called China-Belarus Industrial Park the country’s most important joint project.^[16] Also, according to him, the project will remove the problems of financial instability in Belarus,^[17] and will help the country to make a technological leap.^[47]

A columnist for the «Belarusian News», Nikita Belyaev, notes that this project may provoke a conflict between Belarus and Russia, because, in his opinion, Moscow is not interested in reducing the dependence of Belarus on the Russian economy.^[48]

According to Lenta.ru, the industrial park is «the most ambitious venture in the Minsk-Beijing connection».^[17]

According to Zhang Zhenzun, senior vice president of the Chinese ZTE Corporation, "the project has good potential for the development of high-tech industries".^[34]

See also

• Economy of Belarus

References

External links

• Official site

Coordinates: 53°51′51″N 27°58′32″E / 53.86417°N 27.97556°E / 53.86417; 27.97556