hile the West remains focused on the Russo-Ukrainian energy disputes, as well as on the Donbass conflict in the east of the former Soviet republic, China is actively increasing its economic activities in the Eastern European country. Beijing and Kyiv have recently signed a deal to strengthen cooperation in the infrastructure sector, and the trade turnover between the two nations continues to grow.
Although the level of direct Chinese investments in the Ukrainian economy at the beginning of 2021 was relatively low and amounted to only $107 million, China remains Ukraine’s largest trade partner. The People’s Republic is also the greatest importer of Ukrainian agricultural products. Since the beginning of 2021, China has spent $2.9 billion purchasing Ukrainian food and Beijing is actively developing high-tech cooperation with Kyiv. China’s tech giant Huawei, along with Vodafone, Ukraine’s Finance Ministry, and UNIT.City—Ukraine’s first innovation park—is working on the construction of the 5G network in the Eastern European country. In addition, the Chinese company opened a research and development unit in Kyiv, and mobile operators in the Ukrainian capital have chosen Huawei as their supplier and network adjuster in the implementation of 4G technology in the Kyiv metro. Such moves came despite the United States’ pressure on European nations to exclude the Chinese tech corporation from 5G networks, claiming national security risks such as key information ending up in the hands of Chinese authorities, something Huawei has denied.
Ukraine has been in the U.S. sphere of influence since 2014, when pro-Russian President Viktor Yanukovych was overthrown, but that did not prevent Kyiv from developing close economic ties with China. Still, the case of Ukrainian engine manufacturer Motor Sich shows that both Kyiv and Beijing should be aware that Washington has its red lines when it comes to Sino-Ukrainian business. Since 2016, China’s aerospace company Skyrizon has been pursuing a controlling stake in Ukraine's famed engine-maker. In March 2021 Ukrainian authorities, pressured by the United States, decided to nationalize the aerospace manufacturer, which drew strong opposition from Beijing. Previously, Ukrainian President Volodymyr Zelensky signed a decree imposing sanctions on four Chinese companies, including Skyrizon, that were seeking to gain control of Motor Rish, but such a decision did not have a major impact on relations between the two countries.
What threatened to jeopardize Sino-Ukrainian cooperation was Kyiv’s decision to support an investigation into alleged human rights abuses against Uighurs in China’s Xinjiang region. Some reports suggest that Ukraine succumbed to Chinese pressure to remove its name from an international statement about the position of Uighurs in China’s western province. As a result, Ukraine got access to Chinese-made COVID-19 vaccines, and Beijing has agreed to an infrastructure deal with Kyiv. According to the agreement signed in July, the priorities of cooperation include railway transit, airports, ports, communications and municipal engineering, and the parties will approve potential cooperation projects to be supported by Chinese funds.
Beijing is expected to make Ukraine a key node of its Belt and Road Initiative (BRI), in an attempt to secure access to Ukrainian infrastructure assets, especially its ports. The Ukrainian government, on the other hand, hopes for the active participation of Chinese companies not only in the field of infrastructure, but also in terms of developing industrial parks, as well as the nation’s energy and agriculture sectors. It is worth remembering that in 2016, Chinese CNBM company signed a $168 million deal to purchase a park of solar power plants in the Mykolaiv region in southern Ukraine, and in 2018 Xinjiang Beiken Energy Engineering corporation won the tender for the drilling of 24 gas wells in Poltava and Kharkiv regions. However, despite the Ukrainian government efforts to deepen economic ties with China, the results of a global survey of perceptions of superpowers and their policies at the end of 2020, show that 29 percent of the respondents in Ukraine think that China's overall global policy was destabilizing. On the other hand, another poll conducted in March 2021, shows that 54 percent of citizens in Ukraine report the EU as their preferred international economic bloc.
Ukrainian authorities are, however, quite aware that their country will not become an EU member any time soon, if at all. That could be one of the reasons why the country aims to develop close relations with other major global players, including China. In an attempt to strengthen political ties with Beijing, Olha Stefanishyna, the Deputy Prime Minister for European and Euro-Atlantic Integration, recently said that Ukraine cannot afford to participate in “geopolitical intrigues” against China. Moreover, Davyd Arakhamia, the head of the political council of the ruling Servant of the People political party, said that Chinese President’s Xi Jinping’s book on public administration "made a strong impression on him," pointing out that China is an important strategic partner of Ukraine.
Indeed, Beijing and Kyiv signed an agreement on a strategic partnership in 2011, but the world has dramatically changed ever since. Ukraine is no longer in Russia’s sphere of influence and relations between China and the United States are not as they were in the pre-COVID world. Ukraine, now firmly in the U.S. geopolitical orbit, is expected to continue developing economic ties with Beijing, but only to an extent that does not jeopardize Washington’s interests in the region.
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U.S.–China Balance of Power in Ukraine
Kiyv, Ukraine. Photo via Unsplash.
November 23, 2021
The West remains focused on Russian activities in Ukraine, but China is actively increasing its influence in Ukraine through investment and trade agreements. This situation deserves more attention from U.S. officials, writes political analyst and journalist Nikola Mikovic.
W
hile the West remains focused on the Russo-Ukrainian energy disputes, as well as on the Donbass conflict in the east of the former Soviet republic, China is actively increasing its economic activities in the Eastern European country. Beijing and Kyiv have recently signed a deal to strengthen cooperation in the infrastructure sector, and the trade turnover between the two nations continues to grow.
Although the level of direct Chinese investments in the Ukrainian economy at the beginning of 2021 was relatively low and amounted to only $107 million, China remains Ukraine’s largest trade partner. The People’s Republic is also the greatest importer of Ukrainian agricultural products. Since the beginning of 2021, China has spent $2.9 billion purchasing Ukrainian food and Beijing is actively developing high-tech cooperation with Kyiv. China’s tech giant Huawei, along with Vodafone, Ukraine’s Finance Ministry, and UNIT.City—Ukraine’s first innovation park—is working on the construction of the 5G network in the Eastern European country. In addition, the Chinese company opened a research and development unit in Kyiv, and mobile operators in the Ukrainian capital have chosen Huawei as their supplier and network adjuster in the implementation of 4G technology in the Kyiv metro. Such moves came despite the United States’ pressure on European nations to exclude the Chinese tech corporation from 5G networks, claiming national security risks such as key information ending up in the hands of Chinese authorities, something Huawei has denied.
Ukraine has been in the U.S. sphere of influence since 2014, when pro-Russian President Viktor Yanukovych was overthrown, but that did not prevent Kyiv from developing close economic ties with China. Still, the case of Ukrainian engine manufacturer Motor Sich shows that both Kyiv and Beijing should be aware that Washington has its red lines when it comes to Sino-Ukrainian business. Since 2016, China’s aerospace company Skyrizon has been pursuing a controlling stake in Ukraine's famed engine-maker. In March 2021 Ukrainian authorities, pressured by the United States, decided to nationalize the aerospace manufacturer, which drew strong opposition from Beijing. Previously, Ukrainian President Volodymyr Zelensky signed a decree imposing sanctions on four Chinese companies, including Skyrizon, that were seeking to gain control of Motor Rish, but such a decision did not have a major impact on relations between the two countries.
What threatened to jeopardize Sino-Ukrainian cooperation was Kyiv’s decision to support an investigation into alleged human rights abuses against Uighurs in China’s Xinjiang region. Some reports suggest that Ukraine succumbed to Chinese pressure to remove its name from an international statement about the position of Uighurs in China’s western province. As a result, Ukraine got access to Chinese-made COVID-19 vaccines, and Beijing has agreed to an infrastructure deal with Kyiv. According to the agreement signed in July, the priorities of cooperation include railway transit, airports, ports, communications and municipal engineering, and the parties will approve potential cooperation projects to be supported by Chinese funds.
Beijing is expected to make Ukraine a key node of its Belt and Road Initiative (BRI), in an attempt to secure access to Ukrainian infrastructure assets, especially its ports. The Ukrainian government, on the other hand, hopes for the active participation of Chinese companies not only in the field of infrastructure, but also in terms of developing industrial parks, as well as the nation’s energy and agriculture sectors. It is worth remembering that in 2016, Chinese CNBM company signed a $168 million deal to purchase a park of solar power plants in the Mykolaiv region in southern Ukraine, and in 2018 Xinjiang Beiken Energy Engineering corporation won the tender for the drilling of 24 gas wells in Poltava and Kharkiv regions. However, despite the Ukrainian government efforts to deepen economic ties with China, the results of a global survey of perceptions of superpowers and their policies at the end of 2020, show that 29 percent of the respondents in Ukraine think that China's overall global policy was destabilizing. On the other hand, another poll conducted in March 2021, shows that 54 percent of citizens in Ukraine report the EU as their preferred international economic bloc.
Ukrainian authorities are, however, quite aware that their country will not become an EU member any time soon, if at all. That could be one of the reasons why the country aims to develop close relations with other major global players, including China. In an attempt to strengthen political ties with Beijing, Olha Stefanishyna, the Deputy Prime Minister for European and Euro-Atlantic Integration, recently said that Ukraine cannot afford to participate in “geopolitical intrigues” against China. Moreover, Davyd Arakhamia, the head of the political council of the ruling Servant of the People political party, said that Chinese President’s Xi Jinping’s book on public administration "made a strong impression on him," pointing out that China is an important strategic partner of Ukraine.
Indeed, Beijing and Kyiv signed an agreement on a strategic partnership in 2011, but the world has dramatically changed ever since. Ukraine is no longer in Russia’s sphere of influence and relations between China and the United States are not as they were in the pre-COVID world. Ukraine, now firmly in the U.S. geopolitical orbit, is expected to continue developing economic ties with Beijing, but only to an extent that does not jeopardize Washington’s interests in the region.
