Factbox: China's business and economic interests in Ukraine

China Longyuan Power

23/02/2022 12:12

BEIJING, Feb 23 (Reuters) - Ukraine, which is locked in a
security crisis with Russia, has seen growing investment from
China in recent years.
    China has a strategic interest in Ukraine because of its
location, a free trade deal between Ukraine and the European
Union, and the former Soviet republic's supply of mineral and
agricultural resources.
    China has expressed concern about the "worsening" situation
in Ukraine and called for all parties to show restraint and
resolve differences through dialogue.  urn:newsml:reuters.com:*:nL1N2UX0BK  L1N2UY0FZ 
    Below are some of China's main business and economic
interests in Ukraine. 
    
    TRADE TIES
    Trade relations between China and Ukraine have grown
significantly since a state visit to China in 2013 by then
President Viktor Yanukovych. 
    China leapfrogged Russia to become Ukraine's biggest single
trading partner in 2019, with overall trade totalling $18.98
billion last year, a nearly 80% jump from 2013, according to
data from the State Statistics Service of Ukraine. 
    Ukrainian exports to China, mainly commodities such as iron
ore, corn and sunflower oil, stood at $8.0 billion in 2021,
while imports from China, largely machinery and consumer goods,
totalled $10.97 billion, the data showed.     
    China became the largest importer of Ukrainian barley in the
2020-21 marketing year. About 30% of China's corn imports last
year, more than 8 million tonnes, came from Ukraine, Chinese
customs data showed. urn:newsml:reuters.com:*:nL1N2TY0B5
    Increased bilateral trade also facilitated the launch of
direct rail freight service between the two countries, although
the frequency remains low. Ukraine is also a stop on the
China-Europe Railway Express service, which has helped ease
logistics headaches for Chinese firms during COVID-19 pandemic. 
    
    BELT AND ROAD
    Ukraine is an important hub within the Belt and Road
Initiative, Chinese President Xi Jinping's signature
infrastructure and foreign policy project, which Kyiv joined in
2017. In 2020, the two sides signed an agreement to strengthen
cooperation in areas including the financing and construction of
infrastructure projects.
    Big Chinese companies with operations in Ukraine include
state food conglomerate COFCO Corp  CNCOF.UL , state-run
builders China Pacific Construction Group and China Harbor
Engineering Co (CHEC), and telecoms gear giant Huawei
Technologies  HWT.UL .
    Direct investment by Chinese firms in Ukraine totalled $150
million by end-2019, according to Chinese data. In the first
three quarters of 2020, Chinese firms invested $75.7 million on
projects in Ukraine, according to Ukraine's embassy in China. 
    COFCO in 2016 launched a grain terminal at Nikolaev sea port
worth of $75 million in southern Ukraine. In 2019, CHEC
completed a dredging project at the port of Chornomorsk.
    China Pacific Construction Group in 2017 signed a deal to
build a metro line in the capital Kyiv and Huawei, which has
helped Ukraine to develop its mobile networks, in 2019 won the
bid to install the 4G network in Kyiv's subway.
    Huawei was chosen in 2020 to help ensure and improve cyber
defence and cybersecurity in Ukraine.
    In 2021, China Longyuan Power Group Corporation  0916.HK  ,
the country's largest wind power producer, built and put into
operation a large wind farm in the city of Yuzhne.
    Not every investment has gone smoothly.
    Ukraine said last year that it would halt the takeover of a
local aircraft engine maker by Chinese aerospace company
Skyrizon due to U.S. concerns of forced technology transfers to
the Chinese state. 
    Power Construction Corp of China also signed a deal to
construct an 800 MW wind power plant worth $1 billion with local
partners in Donetsk which would be Europe's biggest onshore wind
park. 
    

 (Reporting by Stella Qiu, Hallie Gu and Tony Munroe, Editing by
Timothy Heritage)
 ((yifan.qiu@thomsonreuters.com; 86-10-66271289;))