Last Monday, a report claimed that China has granted Belarus a loan amounting to $500 million to be received from China Development Bank. It was revealed that the grant is necessary for Belarus and that the same help is offered by China although the former is in conflict against China's strong ally Russia.
The Ministry of Finance of Belarus was granted a loan from the Shanghai Office of the China Development Bank, reported US News.
The report indicated that a Belarusian media outlet claimed that the loan was not subject to any specific project. It was also perceived that the loan may be used for general purposes including Belarus's repayment of its public debt. It was also suggested that the budget may be used as a maintenance of its gold and foreign currency reserves.
The report also claimed that the much-needed cash assistance may also be used for the purpose of Belarus' effort to promote trade ties with China in the hopes of making the deal an introductory alliance between both countries.
According to the Belarusian newsagent Belta, the deal also manifested that both countries may reach a new level of trade relations since Chinese financial institutions consider the Republic of Belarus as a reliable creditor.
It was also emphasized that the Belarusian government had been in talks with China since June wherein it was originally proposed that Belarus would borrow about $600 million USD. However, the initial deal was denied by Russia.
Last October, the Eurasian Fund for Stabilization and Development (EFSD) which was a Russian-managed fund created by the Eurasian Development Bank also denied Belarus's request concerning the seventh loan amounting to $200 million USD. The said loan was an addition to the two-billion USD dollar loan that Belarus already had with Russia.
Furthermore, it was also revealed in the report that China had been shedding off cash grants to Central Europe in recent years. The aids were said to be by virtue of the 17+1 format in 2012 that was a Chinese foreign policy initiative. The said initiative stated that China along with 17 countries would form a Central and Southeastern Europe deal that would support China's Belt and Road initiative.
In other news, the New York Times also reported that Belarus currently relies on Russian energy and loans to alleviate its financial troubles. However, it was discussed that Russia had raised its energy prices and cut some of its subsidies in Belarus making it harder for the latter to stay afloat.
As a condition, it was revealed that Russia's Minsk suggested that Belarus should accept closer economic integration of Russia into its country to be granted lower energy rates thereby lowering its financial burdens in the future.
