China and Belarus Sign Free Trade Deal, Other Agreements On Security And Energy

Sanctions-hit Belarus has announced that it will sign a free trade deal with China for services and investment, as well as agreements to strengthen cooperation in security, energy, and finance.

The new pact was announced in a joint statement released on August 23, a day after a visit by Chinese Premier Li Qiang to Minsk where he met with Belarusian Prime Minister Raman Halouchanka and authoritarian leader Alyaksandr Lukashenka, and promised to deepen cooperation to improve industrial supply chains and reduce costs.

“One of them can definitely be called historic -- an agreement on the creation of a free trade zone for services and investment,” the statement quoted Lukashenka as saying about the agreements.

Belarus said that the trade deal would create “transparent and predictable rules,” which would help the country’s economy by increasing its exports to China by at least 12 percent and boosting Chinese investment into Belarus by 30 percent in the next five years.

Speaking with Li, who arrived in Minsk after a multiday visit to Moscow, Lukashenka said he wanted to see a “large influx of Chinese technology” into Belarus over the coming years -- a move that could signal an increasing reliance on Beijing for trade and economic growth moving forward.

China is already Belarus’s second-largest trading partner after Russia, with the state-run China Daily saying that bilateral trade surpassed $8.4 billion in 2023.

Belarus has been one of Russia's closest allies following its 2022 full-scale invasion of Ukraine, providing logistical support and air bases for the war and recently deployed Russian tactical nuclear weapons on its territory.

But while Minsk still relies heavily on Moscow for political and financial support, it has also looked to balance that dependence with closer ties with Beijing.

That need for diversification has grown in the aftermath of Russia’s invasion of Ukraine with Moscow directing its political and economic resources toward the war.

Cut off from Brussels in 2020 following a crackdown triggered by his disputed reelection that the opposition and the West denounced as rigged, Lukashenka has courted China for loans, investment, and, increasingly, military and political support.

In July, Belarus became the 10th member of the Shanghai Cooperation Organization (SCO) and also hosted Chinese troops for joint military exercises in the western part of the country, some 5 kilometers from the Polish border.

Once an active investor in Belarus for infrastructure, manufacturing, and technology ventures, China had not offered a new project or loan to Minsk since 2019 and seemed to have stepped back from the country amid its domestic crisis, which cut Lukashenka off politically from the European Union and made him a less appealing economic partner for Beijing.

But despite the years of limited economic engagement, Beijing and Minsk have maintained close political ties, which have now led to Lukashenka securing fresh Chinese investment.

Among the various agreements included in the series of deals, five industrial projects totaling $1 billion are set to be launched and 12 more industrial projects worth $2 billion are under approval, according to the joint statement.

Theagreements signed also plan to set up closer cooperation between Belarus and Chinese provincial governments in Chongqing and Shaanxi.