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Geopolitical tensions, wars and sanctions have slowed the implementation of some Chinese projects at the Great Stone Industrial Park, Kiryl Karatseyeu, First Deputy Director General for the development of the industrial park, said in an interview with Belarusian television. According to him, Chinese companies that entered the park and launched projects before 2022 continue to expand actively, while residents registered later have been acting much more cautiously.
“When it comes to the progress of projects, I would highlight two trends. The first concerns companies that entered before 2022 and began implementing their projects before 2022. They continue to invest today. This includes purchasing machinery and equipment, modernization and expanding production. This trend is characteristic of all Chinese companies because they have gained an understanding of the market, they are developing and expanding their sales.
This applies to the production of diesel engines, gearboxes, Zoomlion construction equipment and carbon fiber products. It is an absolute trend. Moreover, the company SAS-Industrial, which manufactures aluminum radiators at our park, recently approached us with a request to acquire a neighboring land plot in order to expand,” he said.
Great Stone currently has 173 resident companies, 67 of which have Chinese capital. According to Karatseyeu, projects worth more than $1 billion are currently being implemented. About $650 million has already been invested, with another $400 million expected to be invested by 2030.
“At the same time, there is also a negative trend. Unfortunately, it concerns new projects. Again, the reasons are objective: the military conflict and the sanctions policy pursued by Western countries against Belarus. Chinese companies are assessing the risks. Most Chinese companies are multinational corporations with production and sales operations in the United States and Europe.
They need time to assess the possibility of secondary sanctions being imposed on production facilities located in Belarus at Great Stone. That takes time. Chinese regulators are assessing the risks in the same way. There are relevant procedures, and they also take time. Banks are also scrutinizing investment transfers and contributions to charter capital very closely. As a result, there are significant delays.
This is a certain problem, but we understand it. We are developing possible solutions. In the near future, in October this year, a working group on the development of the park will meet in Beijing between the Ministry of Economy of Belarus and China’s Ministry of Commerce, within the framework of the trade and economic commission. Possible ways of resolving this problem and accelerating these processes will be discussed,” Karatseyeu said.
He also noted that virtually all technological equipment currently purchased by the park’s resident companies is of Chinese origin. Karatseyeu said it is, in some cases, superior to equipment from Germany, Italy and Japan.
“Even in our own case, we are currently building the infrastructure for the second stage of development and are using equipment made by a Chinese company for stormwater treatment. Previously, we used German equipment. Now Chinese equipment has been manufactured to our specifications. By most parameters, it outperforms its German counterpart. We are very satisfied. It also allows us to save money because it is more affordable,” Karatseyeu explained.
He stressed that the Belarusian side is interested in increasing localization.
“We realize that it is unrealistic to create a completely new, ultra-high-tech production facility from scratch. Therefore, we are focusing on achieving greater localization, including through the acquisition of new technologies and equipment for existing production facilities, including Chinese ones. In other words, we want to move beyond even advanced assembly toward deeper localization.
This applies to engines, gearboxes and carbon fiber products. For example, instead of simply processing carbon fiber into hockey equipment, as is currently done, we want to produce and spin carbon fiber thread ourselves and ultimately manufacture the carbon fiber itself. That is our goal because the market has already taken shape, these manufacturers are already here, and this is something that can realistically be achieved in the short term,” he added.