Ukraine has become China’s new strategic partner / News / News agency Inforos
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Ukraine has become China’s new strategic partner

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06.12.2013 15:39 Valery Tkachev, a political commentator

Ukraine has become China’s new strategic partner
Context:

The visit of the President of Ukraine Viktor Yanukovych in China is over. Due to the political crisis in Ukraine the planned trip has upset the parties’ apple-cart, and Beijing made a pause watching the course of the situation development in Kiev. There is evidence thereof: Ukrainian President’s official visit began with an arrival not in Beijing, but in the Xian city – a center of Shaanxi Province – and with a tour of the Emperor Qin’s Terracotta Warriors and Horses Museum, a visit to Xi’an Aircraft Plant and other activities of little importance. The parties seem to have arranged the change of the official visit programme also to finalize a number of issues in ‘an emergency mode’ - from the wording of joint policy documents summarizing the results of the visit to concrete cooperation issues, including the question of granting a loan of $10 billion to address Ukraine’s external debt problems.

Chinese media before and during Viktor Yanukovych’s visit in Xian have covered in sufficient detail the course of political crisis in Ukraine, referring to reports and analytical materials of foreign news agencies, but refraining from their own comments and estimates. And only toward the evening of December 4 the Fenghuang Tv Channel cited a comment by the known and respected in China international affairs analyst Du Ping, who noted that “the implementation of a planned visit to China by Viktor Yanukovych is testimony to the fact that the political situation in Ukraine is under his control and cooperation with China reflects his desire to diversify the channels of economic cooperation with various countries in the world under the conditions of the European Union’s rejection of aid and uncertainty in relations with Russia on gas supplies.”

In general, it should be noted that the results of the visit for both parties – China and Ukraine – have proved fruitful, although the question that has been kept discussing in foreign media of a ten billion loan for which Viktor Yanukovich went to China did not appear in the documents signed following the results of the visit.

Each of the parties has achieved the planned results - China has expanded its influence in Ukraine, Ukraine will receive in addition to the existing $10 billion of investment a further $8 billion of Chinese investment in the development of its economy.

High mutual interest in the development of bilateral relations was reflected in the agreement on strategic cooperation and economic bloc documents, signed during the visit, among which we should take note of the memorandum on cooperation in the field of creating a deep-water port ‘Crimea’ on the Crimean peninsula with an investment of $3 billion. It may become the only deep-water port in the Black Sea and the main hub in the Black Sea for containerized cargo flows (up to 4.5 million containers per year) from China to Eastern and Western Europe countries, Ukraine and Russia’s southern regions, as well as for massive bulk cargo (grain, ore, chemical fertilizers) from Ukraine and Belarus to China and other countries. The importance of this project for China can hardly be overestimated, as for transnational companies having their manufacturing in China, and Chinese companies the problem of reduction of terms of goods delivery to Europe is especially acute.

In addition, China has become the second largest trading partner of Ukraine. In 2012 the trading volume amounted to $10 billion, and for 8 months of 2013 the trading volume that over the past few years has increased on average by 16%, reached $7.3 billion, while Ukraine’s exports grew by 46%, and imports by 9.2%. A task has been set to bring trade to $20 billion in 2017.

Ukraine’s exports are manufactured goods, food and spare parts for vehicles, imports from China are technology products, machinery and light industry products, which is slightly different from the structure of China’s trade with other countries that were once part of the USSR.

The question of granting a loan of $10 billion may be revived in the future, but not in the form and circumstances, as it was presented by the media before Yanukovych’s state visit to China.

Ukraine is attractive to China for several reasons: a convenient geographic location, an extended maritime boundary with ports, a common border with the Eastern Europe countries, a short exit through them to Central and Western Europe, a new large market (Ukraine’s population - 45 million people) for consumer products and industrial equipment. On the other hand, a great number of big problems in the economy brings the Ukrainian leadership to make quick decisions and act vigorously.

And regardless of the direction, in which the pendulum swings in Ukraine – of the European Union or the Customs Union, neither China nor Ukraine benefits will lose from the entered agreements and increasing cooperation.

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