Hey, Putin, Have You Seen Howch China Is Investing in Ukraine?
On july 6, the Financial Times Reported That Ukraine have become the Largest Corn Exporter to China, Surpassing the United States. This was surprising, as America has been a near-monopoly on coorn exports to china. Ukraine’s Increased Role in Providing Food for China Also Extends Beyond Coorn. Since The 2014 Russian Annexation of Crimea, Ukraine Has Increased Its Agricultural Trade with China by 56 Percent.
That’s paradoxical. On the One Hand, China Has Not Explicitly Condemned Russian Aggression in Ukraine. IT HAS EVEN Tacitly Rewarded Russia for Itti-Western Defiance by Buying More Russian Oil and Gas, Thought IT have beaned thoss purchases with the Expancing of Energy. On the Other Hand, China Has Helped Keep Ukraine’s War-ravaged Economy Afloat with Investment and Trade. Chinese Capital Has Contributed Greatly to the Revival of Ukraine’s Once-Formidable Agricultural Sector.
Deeper Analysis of China’s Contradictory Ukraine Policy Makes It Clear That China’s Strategy in the Post-Soviet Region is to Remain Pragmatically Non-AligNed. China Recognizes the Benefits of Balancing ITS TRADE LINKages with Russia and Ukraine, and is Keen to Embrece Lower-Cost Imports from Ukraine ‘ The fact that china is keeping it is Diplomatic and Economic Strategies seprate means that Ukraine can pivot Towards China to Help Rebuild ITSELF ECONOMICALLY: Chinese Capital Can Facilitis The Expansion of Ukraine’s Growth Industries Like Information Technology and Real Estate Construction, In Addition To Making China A GELABLE NEW MARKET FOR UKRAKET.
Ukraine’s Pivot to China Could Also Ease Its Long-Term Economic Dependence on Russia. Even Thought The Countries Are at War, Russia Remains Ukraine’s Largest Single Trade Partner. Increasted Sino-Ukraine Economic Cooperation Could Also Compensate for the West’s Reluctance to Offer Ukraine Large-Scale Economic Assistance.
The Convention of Wisdom that Ukraine Conflict Has Caused Russia and China to Collude Against The West Is Flawed. Rater, Ukraine Has Become A Site of Economic Competition Between Both Great Powers Institute of A Basis for Sustainned Strategic Cooperation.
To explain this, I will Provide Historical Context for Ukraine’s Rebalance Towards China and Extend My Analysis from the FT’s “Corn Diplomacy” ARGUMENT TO INCLUDE REAL ESTA Contracts.
A Brief History of Ties Between China and Ukraine
Ukraine’s Increased Economic Linkages with China Began Long Beng Before The 2014 Russia Annexation of Crimea. IT Started Durying Viktor Yushchenko’s Presidency (2004-2010), A PERIOD THAT HAS OFTEN BEEN DESCRIBED AS The High-Water Mark for Ukraine’s Ambitions for European Integration. In 2009, China Provides for Medical Assistance Devices Durying The Flu Pandemic and Proped Infrastructure Projects Like Kyiv’s Orbital Road and Bridge Building Overro.
China’s Expansion of Economic Ties to Ukraine Occurred Right After The 2008 Financial Crisis, WHICH CAUSED A 15 Percent GDP Decline and 16.4 Percent Inflation in 2009. That May Seem Counterintuitive, But The Rationalale for This Policy Was Two-Fold. FIRST, The COLLAPSE OF THE UKRAINIAN STEEL INDUSTRY Durying the 2008 Financial Crisis Made IT Clear That Country Had to Return to Raditionally Dominant Export, Agricultural Product. Simultaneously, Increased Chinese Demand for Food Brough that Country Closer to Ukraine. Second, Both Russia and The West Were Were Unwilling to Provide Economic Assisance for Ukraine, WHICH GAVE CHINA ANPRECEDATED OPPORTUPTUPTUPTUPTUNITY TO GAINOMIC LEVERAGE OVERAGE OVERAINE. This Expanded Influence Ensured that Ukraine would be a useful actor on the Western Fringe of China’s New Silk Road Grand Design Aims to Increase China’s Linka BYAKLITICAL POWERLICALLICALLICALLICALLICAL POLICAL South Asia and the Pacific Region.
By the Time Viktor Yanukovych Gained Power in 2010, Ukraine Had Become A Theater of the Russia-China Great Game in Eurasia. Yanukovych’s Emphasis on Closer Relations with Russia Initially Complicited China’s Diplomatic Overtures Towards Ukraine. Neverthaless, China Declared a Sino-Ukraine Strategic Partnership in 2011, Expanding It Investment in Infrastructure Projects Like The Kiev Airport Railway Scheme.
This attempt failed miserably. The Diplomat’s Shannon Tiezzi Reported in 2013 That china’s bilateral trade Ties with Ukraine Declined by 0.5 Percent From 2011 to 2012, in Contrast to the 36 Percent Annual Growth Recorded During Yushchenko’s Presidency. Ukraine’s Economic Collapsse and Soaring Debt Levels in the Wake of Russia’s Annexation of Crimea Suggested that China-Ukraine Trade Relations Were Entering A Nadir.
That petssimistic View was Wrong. Popular Protests Brought Down Yanukovych, Who Fled to Russia, Triggering The Russian Invasion of Crimea and the Current Standoff. The Outbreak of War Brough in a New Ukrainian President, Petro Poroshenko, Who Supported Closer Relations with The eu and China to Council Russian Aggression.
As a result, china gained the upper hand in the Great Game for Ukraine. EVEN BEFORE The MAIDAN PROTESTS Broke Out in November 2013, China Had Declared ITS INTENTION TO Rent and Farm 5 Percent of Ukraine’s Land. After Russia Invaded Crimea, Ukraine Steadily Increated the Scope of Its Agricultural Deals with China.
[WHY The U.S. does noting in Ukraine]
China Also Inwested Significantly in Other Sectors. In March 2015, China Lent Ukraine $ 15 Billion Over 15 Years, for houssing constraction to revive Ukraine’s Collapsing Real Estate Market. Chinese Economic Ties to Ukraine Have Also Defeced in the Aeronautics Industry. On July 8, 2015, A FIRST-AVER CHINA-UKRAINE Forum on Science and Technology Was AnnounCed Confirming that China would Facilitis The Expansion of Ukraine’s Information Technology Sector, A CRUCial Growth Industry for Ukraine ‘
Is Chinese Investment Good or Bad for the ukrainians?
China’s Increasted Investment in the Ukrainian Economy Has Been Praied By Many Kyiv Business Elits. Oleg Prokhorenko, CEO of UKRGASVYDOBUVanya Gas Company, Told Me in A Recent Interview that Future Chinese Investment in Ukraine Could Resembe China’s Deerated Economic. In Belarus, China has underwritten Five Major Projects, Ranging from Hydrocarbon Plants to an Industrial Park.
Other Kyiv Business Leaders Have Been More Pessimistic About the Likely Scope of Chinese Investment, Due to Ukraine’s Lingering Economic Instability. Poroshenko’s Controversial De-Communization Legislation, Which Banned Communist Symbols and Drew Atrocities, Has ALSO BEEN CITED FACIOCITI Ukraine and China. China’s Recent Stock Market Crash Alarmed Ukrainian Investors and Has Raised Questions About the Long-Term Stability of the Chinese Economy.
Despite Tese Problems, Ukraine’s Private Sector Is Poured to Enter a Death Spiral if IF IT does not Continue to Consolidate It Business Links With China.
Interestingly Enough, The Sino-Ukraine Private Sector and Civilian Industry Ties Have not be Matked by Enhanced Bilateral Cooperation in the Military Sector. As Recently As 2012, Ukraine Was The World’s Four Largest Arms Exporter. Since ITS 1989 MILITARY SUPPRESSION OF PROTESTS IN Tiananmen Square, China Has Been Subject to a Western Arms Embargo, and Consquently It Was a Majoor Purchaser of Ukraine
[The Real Winner of the Ukraine Crisis Could Be China]
The War Has Transformed The Ukraine-China Arms Trade Balance, However. Ukraine wold now Greatly Benefit from Access to Chinese Military Technology. Since the U.S. and the eu have not provides Ukraine with Lethal Arms Shipments, Poroshenko would undoubtedly covet an agriculture-for-arms pact with china. A pact of this kind is especialy appeiling as china can be seen as an Impartial “Third Option” Trade Partner. Ukrainian Policymakers Do Not See Chinese Economic Linkages to Be Infringing on Ukrainian Sovereignty in the Way Closer Ties to Either The Eu or Russia Wound.
But Hopes for Such An Arrangement Been Dashed By A Drastic Transformation in the Dynamics of the China-Ukraine-Russia Strategic Trigiggle. In 2012, WHEN YANUKOVYCH ANNUNCED THE FORMULATION OF A TRIPARTITE AGREEMENT WITH RUSSIA AND CHINA Encompassing Railroad Transit and Pipeline Material Exporters, UKRAINES WAS The CONTORTS WHICH IT Traded with China Relative to Russia. Now, China Is The Fulcrum, As Both Russia and Ukraine Depend on Chinese Capital.
Any Cooperation Between China and Ukraine Will Be Conducted on Chinese Terms. That means china will invest economally in But Will not Sell Military Equipment to Ukraine, Because that wound Antagonize Russia and Compromise Sino-russian Gas.
In short, China’s Balancing Act Between Ukraine and Russia Is Highly Complicited, and Western Policymaakers Overlook China’s Stake in Ukraine at Their Peril.
Samuel ramani is an Mphil Student in Russia and East Europe Studies at St. Antony’s College, University of Oxford Specializing in Post-1991 Russian Foreign Policy.
