Ukreximbank – the state import-export bank of Ukraine – is to receive $500 million worth of trade credit from a Chinese company.
The contract was signed in Kyiv on April 17 and will support the Ukrainian bank over a 15-year timeframe for several projects – among them construction, transportation and agriculture.
The general purpose of the credit line is to stimulate international trade and the development of major sectors of the Ukrainian economy.
The deal comes only two weeks after the China Export & Credit Insurance Corporation – a state-owned enterprise also known as Sinosure – gave Ukrainian state company Naftogaz a $1 billion guarantee on debt financing.
Established in 2001, state-owned Sinosure is strongly tied to the Chinese Communist Party and was as the result of a merger between now-defunct parts of the People’s Insurance Company of China and the China Export and Import Bank.
This new Chinese investment into Ukraine comes after the countries discussed strengthening their relationship during the China International Import Expo held Nov. 5-10 in Beijing.
Ukrainian Economy Minister Stepan Kubiv and Chinese Vice-Premier Liu He at that time started preliminary discussions over a potential future Ukraine-China free trade agreement, or FTA, during their meeting on Nov. 8.
Experts estimate that Chinese companies have invested at least $318 billion into Europe, demonstrating China’s intention to further its interests through soft power.
The total trade turnover for China and Ukraine was around $8.7 billion in 2018 and is likely to reach $10 billion by 2019, according to official estimates. Kubiv wrote on Nov. 8 that it could increase to $20 billion before the end of 2023 – even without an FTA.
