For Ukrainian lawmakers visiting Shanghai and Beijing this week, $7 billion in joint infrastructure ventures that have already been planned with Chinese investors might only be a starting point.
Eyeing further cooperation and looking to secure more of China’s spending power and experience in rapid infrastructure expansion, politicians and company bosses from Ukraine are pitching new projects at roundtable discussions with their Chinese counterparts throughout the week.
At the first China International Import Expo, or CIIE, taking place in the country’s two most important cities this week from Nov. 5 to 10, the Chinese are mostly looking for opportunities to further improve food security and boost imports.
Chinese President Xi Jinping said he wants his Silk Road initiative to pump $30 trillion worth of imports into Chinese markets over the next 15 years.
To start achieving such a huge surge in imports, the Chinese leadership are staging an exposition that has so far attracted 300,000 visitors from 172 different countries, according to organizers.
And while dozens of Ukrainian companies have traveled to China to promote their products and services, attract strategic partners and buyers, bureaucrats like Viktor Dovhan, Rayivs Vetskagans and Pavel Ryabikin have bigger priorities as they look for a new injection of financing to advance what has been called Ukraine’s “Infrastructure Revolution”.
Pitching more infrastructure projects
Dovhan, Deputy Minister of Infrastructure, was joined on Nov. 6 by Vetskagans, Chairman of the Seaports Administration of Ukraine and Ryabikin, Director of Kyiv’s Boryspil International Airport, when he met with Chinese counterparts led by Fu Jing, the Chinese Deputy Minister of Commerce.
According to social media posts from delegates in attendance and a statement issued by Ukraine’s Ministry of Infrastructure, or MOI, on Nov. 7, new investments were discussed and deals struck; notably a draft loan agreement of unknown value for the construction of a new bridge over the Dnipro River near Kremenchug, in Ukraine’s central Poltava region – an agricultural heartland and strategic location for food exports.
But it’s not only Chinese lawmakers – who ultimately control the ruling Communist Party’s purse strings and investment decisions – who are being courted by the Ukrainian delegation, led by First Vice Prime Minister Stepan Kubiv.
Minister Victor Dovhan has also led discussions with state-owned or state-backed Chinese companies like the China Pacific Group, the China Road Bridge Company, the telecommunications giant Huawei and ZTE Technologies to talk about “promising infrastructure projects”, according to the Ukrainian MOI.
Other Ukrainian delegates and decision-makers are aiming to meet through the week with China’s biggest and most powerful companies across the infrastructure sector: the Pacific Construction Group, the China Railway Corporation and the China National Electric Engineering company top the list of targets that Kubiv will hope his team can secure commitments from.
China spends big on New Ukraine
So far, few parties have been willing or able to compete with China’s spending power here in Ukraine and while western countries and institutions like the European Union and International Monetary Fund have often placed moral or political conditions on their financial support to Ukraine, the Chinese don’t.
In the last year or two especially, China has been stepping up their focus on Ukraine, with billions of dollars in investment and low-interest loans up for grabs.
On Ukraine’s Black Sea coast, China Harbor Engineering has completed a $40 million dredging operation to expand access to Yuzhny Port and other ports like Odesa, and Chornomorsk are widely expected to receive similar attention.
In November 2017, the China Pacific Construction Group signed a $2 billion deal with Kyiv Mayor Vitaliy Klitschko to construct a fourth metro line – a Chinese bank will cover 85 percent of the cost with loans but it’s not yet clear when construction will start or what the repayment terms of the loan are.
“We can expect more such projects to be undertaken by the Chinese,” said Infrastructure Minister Volodymyr Omelyan in a recent interview with the Ukraine Business Journal. “They’ve become very interested in Ukraine.”
From the Black Sea to Kyiv, Chinese companies are planting red and gold flags on projects that modernize Ukrainian infrastructure but ultimately benefit China too.
Chinese investments into Ukrainian infrastructure make sense: the country’s coastline, 170,000 kilometers of road and 22,000 kilometers of interconnected railway are a tempting opportunity to boost exports and imports with Europe, where China has made $318 billion in investments over the last 10 years, according to Bloomberg.
As Stepan Kubiv and Victor Dovhan lead negotiating teams into yet more infrastructure meetings throughout the week in Shanghai and Beijing, they’re likely to find plenty of willing partners who are ready to see the opportunity in Ukrainian roads, railways and ports.
