Updated at 14:03,27-06-2022

Chinese loans increase Belarus’ dependence on Russia

Stanislau Ivashkevich, “Belsat”

Chinese loans increase Belarus’ dependence on Russia
The more Belarus gets tied loans from China, the more money it needs to get from Russia to pay the installments for Chinese imports.

During the visit of Alyaksandr Lukashena to China on 13-15 May, state agency BELTA reports, Lukashenka convinced the company “CITIC Group” to invest in Belarus 1.5 billion dollars, and other companies agreed to invest a further 1.2 billion dollars in agriculture.

According to the National Bank, the total accumulated investment of China into Belarus have amounted to 141 million dollars. Last year only China entered the top 10 investors in Belarus.

Overall it is known that Chinese investment mainly tied loans. But it is interesting that even the allocation of these loans has decreased in recent years. Thus in 2015, when Beijing confirmed the allocation of a credit line of 15 billion dollars to Belarus, Minsk received 100 million dollars less than the year before. In the past year, the Chinese credit source declined by almost the same amount and accounted for less than half a billion dollars.

Tied loans is the payment in installments for imports of goods and services. The worse the economic situation in Belarus is, the less it can import by installments. Also, the more Belarus’ foreign debt grows, the less willing China is to sell us its goods without prepayment, fearing default.