China Q Belarus Relations: Politically Strong,

C O N F I D E N T I A L MINSK 001286 SIPDIS SIPDIS E.O. 12958: DECL: 10/21/15 TAGS: PREL PINR ECON BO CH SUBJECT: China Q Belarus Relations: Politically Strong, Economically Weak Classified by Ambassador George Krol for Reasons 1.4 (B,D) ¶1. (C) Summary: On October 14 the newly arrived Chinese Ambassador candidly discussed Chinese-Belarusian relations. He asserted his main task is to increase Belarusian Q Chinese economic ties to balance the strong political ties between MINSK and Beijing. He complained that this would be an impossible task, as Belarus' deteriorating command economy has nothing to offer China's growing market economy. A recent Chinese business delegation toured Belarus looking for investment opportunities and went home empty handed. Despite a close political friendship, the Chinese Embassy faces the same highly bureaucratic hurdles faced by the Western embassies in securing a meeting with GOB officials. The Chinese Ambassador said the GOB was more bureaucratic now than ten years ago, and was even worse than Tadjikistan. End summary. ¶2. (C) On October 14 the new Chinese Ambassador to Minsk, Wu Hong Bin, paid a courtesy call on Ambassador. Wu had previously served in MINSK in the mid-1990s. Most recently he served in Tajikistan. Wu speaks excellent Russian and was surprisingly candid in his remarks. Close Political Ties, but No Good Food -------------- ¶3. (C) China and Belarus already have strong political relations, for which Wu made no apologies. China has no qualms about supporting "Europe's Last Dictator." [Note: As a sign of these close ties, a Chinese delegation is currently in MINSK discussing terms for a USD 60 million soft loan to renovate the TETS-2 power plant in Minsk.] However, this close political friendship is a source of much aggravation for Wu and his embassy. Many Chinese delegations come to MINSK to prove their friendship, but, given the lack of decent Chinese restaurants, Wu complained his embassy has to feed them all. Therefore he goes to Vilnius every ten days to purchase food. Economic Ties a Problem -------------- ¶4. (C) Wu claimed his main task is to improve trade and economic relations between Belarus and China, to bring them to the level of the political relationship. However, Wu anticipates this will be an impossible task. Compared to ten years ago, Wu said the Belarusian economy now has little to offer China. The Soviet economic mindset remains, and Belarusian technology that may have been of interest ten years ago has deteriorated, while Chinese standards and demands have risen. A recent delegation of businessmen from China's regions toured Belarus for over a week. When they returned to Minsk, they told the Ambassador they could find nothing of interest in the country for purchase or investment. Wu said that when he presented his credentials, Lukashenko urged him to attract Chinese businesses to buy Belarusian goods and invest in Belarusian companies, "as a window to the European market." Wu said he realized he could not tell Lukashenko Belarus has nothing to offer China, nor did China need Belarus as a window to European markets, and so he simply nodded. Wu worried how he can satisfy both Beijing and MINSK and build economic ties when the Belarusian economy has nothing to offer China. He anticipates a difficult tour. ¶5. (C) Wu believes soon even Russia will lose interest in inferior Belarusian goods. Belarus cannot keep pace globally with its command economy. Russia keeps Belarus afloat through energy subsidies, a growing market and a preferential trade relationship. Wu speculated that should Russia ever force Belarus to pay world prices for energy, and if Russian buyers shopped elsewhere, the Belarusian economy would collapse. Belarusians Still Must be Belarusian -------------- ¶6. (C) Despite the close friendship between their countries, Wu complained about how bureaucratic official Belarus has become. He is unable to approach Belarusian ministries or officials directly, but must instead work through the MFA, which is very argumentative and slow. Shaking his head, he commented that things are much worse now than ten years ago, and claimed even the Tajiks were more open and less bureaucratic. Wu stated all the officials he has met suffer from arrogance, and added, "While it is good to be proud, one should have something to be proud of." ¶7. (C) Comment: It would be hard to imagine Beijing giving the Lukashenko regime any sort of tough political message. China seems to think that domestic politics are not a matter for foreign policy concern. However, the fact that Chinese diplomats and businessmen are critical of Belarus' command economy and are no doubt passing some of these feelings to their Belarusian interlocutors reinforces the message that Lukashenko is isolating Belarus from the world. Belarus' potential export markets are shrinking. Given time this could become a catalyst for change. Also telling is how the GOB treats its "close friends" in the Chinese Embassy. The regime seems determined to face the world proudly but increasingly alone. KROL