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Economy
06 December 2021, 17:32

Opinion: With West's sanctions Belarus looks east

MINSK, 6 December (BelTA) - The sanctions policy of Western countries creates powerful additional incentives for the dynamic development of foreign economic relations with China, Director of the Institute of Economics at the National Academy of Sciences of Belarus Vasily Gursky told BelTA commenting on Directive No.9 on advancing Belarus-China bilateral relations in 2021-2025.

"This step is a logical continuation of Belarus' foreign economic policy in relations not only with China but with the east in general. The global economic uncertainty, which has been growing rapidly recently, the sanctions pressure from the EU and the United States, the impact of the pandemic and other factors generate new economic and social risks, challenges and threats for all countries without exception. It is obvious that in the current international context, the need for constructive interaction and mutual support is significantly increasing for all. For Belarus, the objective need for geographical diversification and, in some cases, export reorientation is also growing. The sanctions policy of Western countries and the friendly attitude of the eastern neighbors create powerful additional incentives for the dynamic development of foreign economic relations with Russia and China," Vasily Gursky said.

"it is not only Western sanctions that force Belarus to look eastward. New centers of power, such as China, India, Brazil, Turkey, and Iran have been demonstrating outstripping economic growth. The U.S. GDP at purchasing power parity increased by 2 times from 2000 to 2020, the EU GDP - by 2.1 times. Meanwhile China's GDP expanded .6 times, that of Russia 4.1 times, India by 4 times, Turkey 3.9 times. There is a redistribution of markets and spheres of influence in the global economy," the expert said. According to him, the GDP indicator at purchasing power parity characterizes the aggregate demand in the country, which, in turn, is a force of attraction for trade flows and investments, a driver of innovations. The volume of aggregate demand in the country determines the depth of the division of labor, which is the main factor in increasing labor productivity, reducing production costs, in other words, the main factor in further economic growth.

Based on the importance of countries for Belarus' export and the general dynamics of their development, the eastern vector is more preferable for Belarus' foreign trade, according to Vasily Gursky. "China ranked third in Belarus' foreign merchandise trade accounting for 7.3% in 2020. It was 7th in terms of Belarusian merchandise export with a share of 2.6%, and 2nd in merchandise imports with a share of 11.5%. Belarus-China trade relations have been vibrant recently, reaching their historical maximum of $4.5 billion in 2020. Mutual trade between Belarus and China has increased by more than 1.4 times in the last five years. Further development of trade and economic cooperation with China is one of the priorities of Belarus' foreign economic policy alongside with the Eurasian economic integration,” the expert stated.

It is not only Belarus that has been actively developing the eastern vector. Partners in the CIS, the EAEU and the Union State have also been increasing their trade with China. “There is a steady drift of economic interests and reorientation of trade flows towards dynamically developing economies, such as China. These objective processes create much more powerful incentives for rapprochement with China,” Vasily Gursky said.

In his words, further expansion of Belarusian-Chinese economic cooperation requires new formats, which may include deeper interregional cooperation, bigger Belarusian economic presence in provinces and cities of China, increasing the attractiveness of Belarusian regions for Chinese investors and manufacturers of goods and services. “Directive No. 9 signed by the head of state on advancing Belarus-China relations will contribute to further deepening and fuller realization of the potential of the strategic partnership between the two countries, including creating the conditions for sustainable and comprehensive economic growth, cultivating the innovation and digital environment, improving the wellbeing and quality of life of people, building mutually beneficial and equal cooperation with external partners,” the expert said.

“The People's Republic of China has been Belarus' reliable partner, which continues to maintain friendly relations and seeks to establish mutually beneficial trade and economic ties despite external challenges and threats and unprecedented pressure from the collective West. The directive on advancing the bilateral relations between Belarus and China is an important step towards building confidence and mutual understanding between the two peoples, towards developing a solid foundation for long-term comprehensive ties between the two countries which seek to develop economic and political cooperation together based on the principles of mutual respect, equality, justice and mutual benefit. This is what is lacking in relations with the Western neighbors,” Vasily Gursky said.

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