Bloomberg: China builds city in Belarusian forests

Former collective farmer Lukashenka is looking for new allies to reduce his reliance on Russia.

A Chinese city will appear in the forests near the Belarusian capital.

The project is intended to become China's manufacturing springboard to the EU, Bloomberg writes.

Lukashenka allotted an area 40 percent larger than Manhattan around Minsk’s international airport for the $5 billion development, which will include enough housing to accommodate 155,000 people.

Lukashenko, who’s led his former Soviet state of 9.5 million for two decades, is turning to China to help revive the country's economy. The new industrial centre will put Chinese exporters close to the EU members and give them tax-free entry into Russia and Kazakhstan, which share a customs union. It will also let them draw from a workforce that’s 99.6 percent literate and makes $560 a month on average, half the Polish wage.

“This is a unique project,” Gong Jianwei, China’s ambassador to Belarus, said. “Nobody will be able to build anything like this industrial park anywhere else in Europe anymore. The infrastructure is so powerful.”

The “modern city on the Eurasian continent,” as it’s called in marketing documents, will be built around the M1 highway that links Moscow and Berlin via Belarus and Poland. A speed-rail network will tie the airport to the center of the city, which will be powered by a $10 billion nuclear plant, Belarus’s first, which Russia agreed to finance and build by 2018. The first stage of the park is scheduled to be completed by 2020, with the second stage taking another 10 years.

Lukashenka, a former collective farmer, has sought to cultivate allies and reduce his reliance on Russia since the U.S. and EU intensified sanctions on him and other Belarus officials for jailing political opponents after the 2010 election that gave him a fourth term.

His isolation deepened after the deaths of two of his few supporters among world leaders, Libya’s Muammar Qaddafi in 2011 and in March Venezuela’s Hugo Chavez, for whom Belarus declared three days of national mourning.

Tax Breaks

Chinese companies are eligible for the tax breaks at the future park.

Chinese leaders have been seeking to establish a manufacturing base for their exporters within the EU for years. Talks with Bulgaria on establishing a park similar to the one Belarus has approved, though much smaller, started in 2010 only to stall after a change in leadership in both countries, Valery Andreev, who heads the company overseeing Bulgaria’s industrial zones, said by phone from Sofia.

“It would make sense for Chinese companies to build factories here, where the market is, but we are not in a position to wait for Chinese investors only,” Andreev said.

Then-Premier Wen Jiabao led a meeting with officials from several eastern and central European countries in Warsaw, Poland, last April during which he identified 12 steps they could take to improve relations with China -- one of which was to have China develop an economic zone in each of the countries, according to Andreev.