Although the overall volume of Ukraine’s international trade has decreased during the pandemic, with some trade partners, relations have only improved.
China was Ukraine’s largest single nation trading partner for the second year in a row, according to the State Statistics Service. The Ukraine-China trade turnover accounted for $15.4 billion in 2020, which is $3 billion more than in 2019.
Ukraine exported to China $7.1 billion worth of goods, including agricultural products and metals. Ukraine imported $8.3 billion from China, consisting mainly of nuclear reactors, machinery, electric cars, and minerals.
China has been the leader among Ukraine’s international partners since the first quarter of 2019, when it replaced Russia as the top trade partner.
Today China buys Ukraine’s agricultural products and invests in the country’s rails and roads to have better access to other European marketplaces, experts said.
Selling to China
Agricultural products remained Ukraine’s largest export sector, accounting for $9.4 billion in 2020 — $20 million less than in 2019. Ukrainian exports to China, the world’s largest agricultural importer, consist mostly of raw agricultural materials and some food products.
Ukraine’s exports to China account for nearly 1% of the Chinese total import, according to Ruslan Osypenko, the head of the Chinese Commerce Association. Osypenko said that Ukraine still struggles to compete with other Chinese agricultural suppliers, including the United States, Russia and Brazil.
To ramp up the Ukrainian agricultural exports, the country’s government has to support the industry and showcase its potential to investors abroad, Osypenko said in a May 15 interview with news website APK-inform.
Buying from China
China is a huge market that hasn’t stopped growing even amid the pandemic, ramping up its export to the record $2.5 trillion in 2020.
Ukraine-China trade relations started to greatly improve in 2017, when the Chinese government promised to invest $7 billion in Ukraine’s roads and bridges. China needs Ukraine’s infrastructure to better trade with Ukraine and Europe, according to Danilo Bogatyrev, an expert from Ukraine’s institute of politics.
Some 4o million Ukrainians can be a big sales market for Chinese companies who sell machinery, electrical utilities and minerals, according to Ukrainian economic expert Valeriy Klochok.
Other trade partners
Ukraine’s total trade turnover in 2020 declined by 6%, reaching $103.4 billion.
The imports went 10.3% down to $54.2 billion, while exports of goods dropped by 1.7% to $49.2 billion.
The changes in import-export have halved Ukraine’s trade deficit in 2020, from $10.2 billion to $4.9 billion, according to Taras Kachka, deputy economy minister.
“For a crisis year, the results are not that bad,” Kachka said on Jan. 1.
According to him, prices for metal and ores have done well, bringing Ukraine $7.7 billion.
Ukraine exported 2.3% less grain in 2020 but still got $9.4 billion because the price for barley, wheat and corn went up, Kachka said.
Apart from China, Poland, Russia and Germany remained the main trade partners for Ukraine.
For years, Russia was Ukraine’s main trading partner, but the relations between the countries stagnated after Russia invaded Ukraine in 2014, starting its war in the Donbas. Last year, Ukraine exported from Russia $2.7 billion worth of goods compared to $3.24 billion in 2019. Russian’s imports in 2020 accounted for $4.6 billion compared to $6.99 billion in 2019.
Even though Ukraine started to limit its trade with Russia, it didn’t hurt the Ukrainian economy much — Ukraine signed a trade deal with the European Union that took effect on Jan. 1, 2016, which boosted trade between Ukraine and Europe by canceling customs duties for some exports.
Thus, Ukrainian businesses started to trade more actively on one of the world’s largest markets with nearly 500 million consumers.
Although the EU remained a big trade partner for Ukraine in 2020, the global pandemic took a toll on their trade relations. In the first quarter of 2020, the bilateral trade between the European countries and Ukraine reached $18.8 billion, which is 15% less than during the same period in 2019.
