Because Ukraine is coveted by China
Trade, investments, arms flows, expatriates: all the reasons that could lead China to move closer to Ukraine, despite its support for Russia. The article by Marco Orioles
After Chinese President Xi Jinping's phone call to his Ukrainian colleague Zelensky, and above all after Beijing's favorable vote in the UN General Assembly on a resolution referring to "Russian aggression" in Ukraine, the voices referring to the possibility that Beijing is distancing itself from Moscow in favor of relations with the invaded country.
Here are all the economic reasons that help explain this possible change of pace and tune on the part of China.
Ukraine-China bilateral relations since 1991
As Yurii Poita, head of the Asia-Pacific Section of the Center for Army, Conversion and Disarmament Studies in Kiev writes in a paper by the Institut Montaigne, the bilateral Ukraine-China relationship has gone through several phases since 1991, the year of independence of the Ukraine, with an intensification of political contacts that took place under the presidencies of Leonid Kuchma and Viktor Yanukovych and a slowdown when the pro-Western leaders Viktor Yushchenko and Petro Poroshenko were at the helm of the country,
The milestones of the report are represented by the 2011 Declaration on Strategic Partnership and a subsequent supplementary declaration signed in 2013 together with a long series of documents on cooperation. In the meantime, the commercial relationship has begun to develop and strengthen over time.
The commercial exchange
Drawing now on the pages of the Chinese Foreign Ministry dedicated to trade between Ukraine and China, let's see which sectors are most affected by cooperation.
The Ministry first of all notes that, on the basis of the 2021 trade, China was Ukraine's first trading partner before the war. According to data from the State Statistical Service of Ukraine, trade in 2021 amounted to almost $19 billion, of which $8 billion in exports of goods from Ukraine to China and $10.97 billion in imports from China to Ukraine.
The structure of bilateral trade in that same year saw the prevailing supply of minerals and ferrous materials, products of animal or vegetable origin such as oils, fats and cereals, machinery, boilers and wood products, as regards Ukrainian exports.
As regards imports of Chinese goods to Ukraine, we note the supply of electrical machinery and machinery in general, vehicles other than railways, plastic and polymeric materials, shoes, photographic machines and equipment, chemical products, furniture, ferrous materials and rubber.
Investments
The Beijing Foreign Ministry also reports that, according to data from the Ukrainian National Bank, at the end of 2021 there were 111 million dollars of direct investments from China to Ukraine.
The sectors most affected are industry, agriculture, forestry and fishing, wholesale and retail trade, vehicle repair, transport, construction, postal services and warehouses.
The ten reasons to keep an eye on the bilateral relationship according to the Kyiv Post
In a long article dedicated to the bilateral relationship between Ukraine and China, the Kyiv Post takes stock of the economic factors that discourage paying attention exclusively to the relationship between Russia and China.
First, China in 2019 replaced Russia as Ukraine's main trading partner. And this following a trend in trade which in the last 25 years has increased by an average of 20% per year, with exports from China to Ukraine going from 73.4 million dollars in 1995 to 7.46 billion in 2020. In fact, the newspaper reports, Ukrainian exports to China quadrupled between 2018 and 2021.
China then became one of the largest buyers of Ukrainian-made corn, barley and sunflower oil. In 2021, in particular, wheat exported from Ukraine to China accounted for 20% of China's total wheat imports, while Ukrainian maize accounted for 80% of China's total corn imports in 2019.
A further reason to pay attention to the exchanges between the two countries concerns the supply of arms by Ukraine, which began in 1998 when Beijing bought the Varyag aircraft carrier from Kiev, later renamed Liaoning. In the following years Ukraine became the second largest arms supplier to China after Russia.
We also note the financing of projects by China in important sectors of the Ukrainian economy such as maritime transport, including the works in the ports of Mariupol and Odessa, interventions in other transport infrastructures such as the renewal of the Kiev Metro and then investments in the fields of agriculture, energy and telecommunications.
Then there are the contracts in the construction sector that see China as the protagonist through companies such as China National Machinery Industry Corporation, China Hydropower, and State Grid for works that in 2021 amounted to 6.6 billion dollars.
Another reason to keep the bilateral relationship under a magnifying glass is Ukraine's accession to the Chinese massive infrastructure project of the Belt and Road Initiative, which makes Ukraine an important transit point for Chinese goods bound for Europe in the light of the free trade agreement between Ukraine and the EU.
The last factor that the Kyiv Post draws attention to concerns expats: there are 6,000 Chinese citizens living in Ukraine and up to 100,000 Ukrainian citizens residing in China.
The arms trade
It is again the Institut Montaigne that recalls how, on this front, the bilateral relationship is more than consolidated and dates back to the time when, after the Tiananmen events and the arms embargo launched against China, Beijing began to look at Kiev as a source of military technologies for its navy, air force and space industry.
However, the volume of Ukrainian exports to China is not impressive and is calculated by the Stockholm International Peace Research Institute at 80-90 million dollars a year.
Among the most important supplies we highlight those of the UGT 25000 turbine engines for the Chinese Type 055 cruisers and the Bison amphibious boats.
Together with the Turkish and Pakistani markets, the Chinese market represents one of the most important outlets for the Ukrainian war industry. However, the increasingly close ties between Kiev, Washington and the West mean that Ukraine is careful not to make available Beijing's lethal weapons that can strengthen the People's Liberation Army to the point of posing a threat to the US military in the Pacific.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/ucraina-cina-relazione-bilaterale/ on Sat, 06 May 2023 05:02:45 +0000.