"Technological alliance is to be", an interview by Alexander Shumilin for Nauka I Innovatsii
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"Technological alliance is to be", an interview by Alexander Shumilin for Nauka I Innovatsii
Efficient science and making of competitive high-tech products on its basis are both impossible without the deep integration of national scientific and industrial spheres into global research and innovation networks. One of the key partners of the Republic of Belarus in the science and technology segment is the People’s Republic of China. We asked the Chairman of the State Science and Technology Committee, Doctor of Economic Sciences Alexander SHUMILIN how the interaction between two countries is developing and what the prospects are.
- Cooperation between Belarus and China is characterized by a stable positive dynamics. Ambitious joint projects implemented both at the state level and at the level of individual enterprises and research teams. It couldn't be done without a serious legal basis. How was it created?
- The institutional base of bilateral relations between Belarus and the PRC is highly developed. To date, there are more than 80 bilateral international treaties, including about 40 interstate and intergovernmental agreements covering trade and economic, military-technical cooperation, investment, health care, protection of intellectual property rights, etc. The scientific and technical sphere is regulated by agreements between the Government of the Republic of Belarus and the Government of the People’s Republic of China on cooperation in science and technology, on the protection of intellectual property rights, on the establishment of the Belarusian-Chinese Intergovernmental Committee on Cooperation, the Memorandum of Understanding between the Committee on Science and Technology under the Council of Ministers of the Republic Belarus and the Ministry of Science and Technology of China in the field of innovation, the Treaty on Scientific Cooperation between the National Academy of Sciences of Belarus, the Belarusian Republican Foundation for Fundamental Research and the Chinese Academy of Social Sciences, as well as other documents. In addition, contacts at the regional level have been established with the governments and departments of science and technology of six Chinese provinces - Shandong, Henan, Jilin, Guangdan, Zhejiang, Heilongjiang and the city of Shanghai. A momentous document was the Directive of the President of our country dated August 31, 2015 “On the development of bilateral relations of the Republic of Belarus with the People’s Republic of China”, where cooperation in the trade, investment, financial and innovation spheres, creation and implementation of joint projects and enterprises are determined as the main areas of cooperation. Following the visit of the Head of State to the People's Republic of China in 2016, a Declaration was signed on establishing a trusting all-round strategic partnership and mutually beneficial cooperation, which envisages the expansion of ties between scientific and innovative organizations and institutions of higher education in the field of science, technology and innovation.
- What mechanisms of cooperation and commercialization of scientific developments of Belarus and China have proven to be the most effective?
- First of all, these are joint research and scientific and technical projects carried out with the financial support of the governments of the two countries in the framework of the list approved for a two-year period; creation and development of infrastructure to promote bilateral science and innovation cooperation - joint centers, laboratories, technology parks, funds and similar initiatives at the national level, at the provincial, city and individual organizations, as well as exhibition and fair activities and joint activities aimed at finding partners and commercializing the results of scientific activities, advertising potential, etc. For example, Belarus is preparing to present a collective section of science, technology and innovation developments in the second international exhibition of imported goods and services, which will be held in November 2019 in Shanghai. A joint Belarusian-Chinese competition proved to be a good platform for identifying promising scientific products. For example, following two such events held in 2018, the SCST received 84 projects and in the near future 20 of them will be funded. We are currently negotiating with the Chinese side on the number of proposals and the amount of funding for the second competition. It must be said that their implementation by Belarusian performers is controlled by the SCST. Thus, of the 28 projects included in the list for 2016–2017, 15 are completed or nearing completion. Half of them are made in the form of contracts with partners from the PRC, while the development is transferred to the Chinese side. The results of the other projects are used in Belarus, in particular at the enterprises of the Ministry of Industry and Gorremavtodor, as well as in scientific research. As part of the implementation of the “Belt and Road Initiative” in July this year, the International Forum “Open Park “The Great Stone” - an example of global opportunities” was held. It was a continuation of the second forum of international cooperation “Belt and Road”, held in April 2019 in Beijing. During the event, the products of Belarusian and Chinese companies that operate in industries such as engineering and industrial equipment, energy, transport and logistics, construction, woodworking, science and technology, IT and telecommunications, pharmaceuticals, as well as the investment potential of the park were demonstrated.
- It is known that the megaproject of the resurgent new Great Silk Road is not merely a trade route, but a channel for the movement of ideas and the joint creation of innovations. What are the most ambitious and major plans to be implemented in our country?
- In this context, the “Belt and Road Initiative” seems to be the most ambitious, one of the main elements of which is the Industrial Park “The Great Stone”. This is a subject with a special legal regime for doing business with an emphasis on high-tech and competitive innovative industries with significant export potential. Any company can become a resident there, regardless of the country of origin of the capital. For them, the park created a favorable investment climate, provided unprecedented privileges and preferences, and also formed a separate independent government body that provides comprehensive administrative services on the principle of one contact. As of April of this year, there were 43 residents in the park, including ones from the USA, the EU, Israel, Canada and Russia, as well as major Chinese corporations Huawei and ZTE. “The Great Stone” reveals the potential of Belarus as an important transport-technological, information and communication link between the CIS, Russia and Europe, and also provides an opportunity for duty-free entry into the market of the countries of the Customs Union and the Common Economic Space. Another major joint project is the creation of Belzhi CJSC, a full-cycle plant for the production of Geely cars, with a capacity of up to 60 thousand units per year. For 2019, the goal is to produce and sell up to 25 thousand cars. The plans include the manufacture of alternative medicine of Chinese medicine in Belarus on the basis of the Borisov Medical Products Plant; a modern enterprise is planned to be built with the Beijing Pharmaceutical Corporation in the industrial park "Great Stone". Its products will be sold both in Belarus and abroad. A major contribution to the implementation of joint projects is made by the Chinese corporation CITIC Group, whose area of interest is enormous: finance, construction, information technology, industry and trade. Supported by Chinese partners in Belarus, three cement plants built on a turnkey basis, the Belgi enterprise created, and the assistance was made in the modernization of the Orsha Flax Plant. There are plans to produce specialized fire robots in the Great Stone industrial park.
- Are organizations of the Ministry of Industry of the Republic of Belarus involved in joint scientific and technical projects?
- Domestic business entities are gradually becoming involved in cooperation with Chinese partners. In 2017, LLC MAZVeychay and LLC ZumlionMAZ registered joint ventures for the production of diesel engines, special construction and utility vehicles in the Republic of Belarus. In October 2017, LLC MAZVaychay became the resident of the Chinese-Belarusian industrial park "Great Stone". PlanarSO and the Chinese Electronic Technology Corporation CETC were contracted to supply 12 sets of ultrasound systems for $ 20.2 thousand as part of the project concerning the joint development of the technology of automatic aluminum lead seal wires connection in electronic products. In 2017 the products were shipped by the Belarusian side to the customer. Currently work is underway to conclude contracts for the current year and for the future. In December 2017, a Memorandum was signed between OJSC MTZ and JV LLC Harbin Don Jing Minsk Tractor. In accordance with the document, an agreement was reached on conducting marketing, testing and certification of energy-saturated tractors and supplying 50–100 units in 2018–2019.
- Which products are most attractive for the Chinese side and how is the trade cooperation of our republic with the PRC developing?
- In general, we can describe the current trends as positive ones. For example, in 2018, the trade turnover between the countries grew by 17.1%, Belarusian exports by 33.4%. Potash fertilizers, electronic integrated circuits, petrochemicals, machinery, logging, and textiles are in great demand in China. We have ambitious plans. For example, in 2020 OJSC Integral is going to increase exports of electronic components to the PRC by 30%, and OJSC Belarusian Potash Company has signed a memorandum on deliveries to China of more than 500 thousand tons of potash fertilizers in 2019-2023. The Chinese Association for Trade in Timber and Wood Products has shown interest in the products of Belarusian timber industry enterprises. We consider the possibility of organizing its direct deliveries to the Chinese market. The important stage of the accreditation of Belarusian producers is now completed, and as a result meat and dairy products became a new growth driver for domestic exports. Its sales in the PRC last year increased 4.4 times compared to 2017, the share in the volume of foreign trade increased from 5.2 to 17.1%. In the first quarter of this year, our country imported such products by 15.3 million dollars to China, which is 2.7 times more than during the same period of 2018. Favorable conditions for increasing the volume of foreign trade are created by expanding the railway transit of container trains through Belarus, as evidenced by the statistics: from 2015 to 2017, their number increased 10 times and reached 2,742. In addition, we were the pioneers in establishing a high-quality agricultural production that permanently loads trains returning from Europe to China. In order to deepen cooperation on the organization of China-EU-China transportation, the Belarusian Railway signed a seven-party agreement between the relevant departments of China, Germany, Kazakhstan, Mongolia, Poland and Russia. In April 2018, a joint working group meeting was held in Minsk, a Memorandum of Understanding between the Belarusian Railway and DHL Global Forwarding was signed.
The most effective way to promote Belarusian goods on the Chinese market is to create joint ventures. Several such structures are already registered in the PRC. These are the Belarusian Food and Agriculture Company ‘Belarus Food and Agriculture (Shanghai) Co., Ltd’, AVIK-BELAZ Mine Machinery LLC, Harbin Dongjin Gomel Enterprise of Agricultural Engineering LLC, a joint venture for the assembly of Belarusian energy-saturated tractors. The largest domestic manufacturers in China have their own distribution networks, while in our country there are representative offices of Chinese corporations ZTE Corporation, International Furniture Co. Limited.
- As you know, the development and growth of relationships bring investment in. What industries are the most successful in that way?
- At the end of 2018, the volume of direct Chinese investment amounted to 190.1 million dollars, which is 1.67 times higher than the previous period. 42.2% of them entered the Industrial Park "Great Stone". In March 2019, a meeting of the board of directors and the annual meeting of the shareholders of the park took place in Beijing, where a decision was made to create an investment fund to support small and medium-sized businesses and venture projects implemented both in the park and in Belarus in general. The work of the fund is planned to be organized in a center for cooperation in the field of transformation of scientific and technological achievements, the construction of which will begin shortly. There will be a demonstration of samples and information on manufactured products for the subsequent registration of property rights, signing contracts. The center will be engaged in experiments, testing and small-scale production. Thus, a comprehensive infrastructure will be created to stimulate the innovative development of the park. The largest direct investments from the PRC to Belarus in 2018 were brought in by CJSC Belgi, CJSC Development Company of the Industrial Park, CJSC China Merchans SeychenBielar, MOO-Horizon SOOO, MAZVeychay LLC, the 25th company of the Chinese corporation railway construction, LLC SigikopBel, LLC Whitiow Technology Bieler, LLC BelkaliyMigao, CJSC BNBK. These 10 companies account for about 90% of all FDI from the PRC for 2018
- The global trend towards the widespread adoption of ICT and their deep penetration into the “traditional” industries has not bypassed Belarus and China. Are countries ready for a strategic breakthrough in real sectors of the economy based on digitalization?
- We see information and communication technologies as a point of mutual growth of the two states. The directions of the movement of Belarus in the ICT sector are the transfer of developments, inclusion in production chains, exchange of experience, joint projects, training of specialists. It is also promising to use the experience of China in the field of e-commerce, which is one of the main drivers of the Chinese market, the Internet+ development plan, Big Data, the Internet of Things, as well as 5G and 6G. By the way, the Internet of Things has already came in our country - in May 2018 the telecom operator Velcom A1 launched a network for this platform in Minsk, and it is planned to cover regional and large district cities of Belarus with it. The project "Digital City" for big data management is scheduled for implementation as well. The resident of the Industrial Park “Great Stone - thhe company “Tsifrograd Jianyi” LLC – is managing the project, and it is expected that services become available next year. Another resident - Institute Belgosproekt OJSC - with the participation of the Chinese company Beijing JianYi Investment and Development (Group) will ensure the introduction of BIM-technologies into the design activity during the development of the industrial park, as well as the implementation of other projects. The achieved level of scientific and technical cooperation and the implementation of joint projects will not only increase the research and innovation potential of our states, but also help the creation of new joint high-tech industries and enterprises both in Belarus and in China.