Changes brewing at "Ukraine-China border"

14:30, 10 December 2015
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Opinion

The processes that Moscow launched after the annexation of the Crimea in early 2014, began to change the face of Eurasia, blurring older alliances and opening up new opportunities for different states, including Ukraine.

China continues to develop quite successfully remaining among the world’s leading powers, despite stock turbulence and economic crisis. At the same time, Russia is losing its way in China, slowly and "gently" turning into a 21st century China’s resource colony. Against this background, it’s appropriate to speak of a “Ukrainian-Chinese border,” as it seems the Chinese will not have to wait long until total absorption of the "Russian world.” The only power that can secure Russia from a "creeping" integration with China is the United States, but Barack Obama is too busy putting a spell on the Kremlin, which has been craving for ultimate confrontation.

The reports in Chinese media are worth noting of the recent transfer of part of the Russian territory (4.7 square kilometers wide, 60 km from Ussuriysk) to China. Russian authorities did not confirm this information, but there is no doubt that such processes have been launched across all Sino-Russian Border. Beijing is effectively using the fact that Russia has sunk into its "hybrid war" with the West. So, China is "softly" expanding its influence, moving closer to the Urals.

On the other hand, Russia’s relevance and its weight, including as an energy supplier, for China have decreased significantly. For example, China is actively building LNG terminals (aiming to receive up to 125 billion cubic meters of LNG per year by 2017), which seriously reduces the value of the possible Russian gas supplies to Chinese consumers. This is yet another blow to the increasingly weakening Gazprom. Moreover, this year, Russia has given to Saudi Arabia the title of the main exporter of "black gold" to China (about 15% of the Chinese market share). Russia is even slightly behind Angola in the Chinese market (both countries have about 12% of China’s oil market).

Thus, the "Chinese dragon" is already digesting pieces of Russian territory, not willing to accelerate the process of "creeping annexation" on the background of aggravated domestic problems. But the inability of Putin's Russia to somehow resist Chinese influence is obvious.

On the other hand, China's relations with Ukraine in recent years have been enhancing, but clearly not reaching the point of the full realization of their true potential. Trade turnover between the two countries in 1H 2015 merely totaled $3.2 billion. Meanwhile, Beijing started sending signals of interest toward Kyiv. One of those signals is the initiative for the increase of Asia-Europe-Asia intermodal cargo shipments. A draft agreement was signed recently on this project between the Ukrainian and Chinese companies, with the participation of Ukraine’s Infrastructure Ministry.

China sees Ukraine as one of the links in the chain of a New Silk Road. This opportunity should not be missed, and now the Ukrainian authorities, both central and regional, began searching for optimal variants of mutual cooperation. In addition, from September 7 a Chinese Trade Association started its work in Ukraine uniting 15 Ukrainian and Chinese companies. It is clear that ahead of the introduction of the Ukraine-EU Deep and Comprehensive Free Trade Area from January 1, 2016, Beijing began to really consider Ukraine as one of its possible bridgehead partners, to increase China’s trade turnover with the EU.

Negotiations between the parties on the assembly in 2016 of the Chinese Hongdu light fighter jets equipped with the Ukrainian engines at the Odesa-based Odesaviaremservice are another important aspect of Ukrainian-Chinese cooperation. If this project is implemented, Ukraine, together with China, will be able to compete with Russia in the market of light fighter jets, opening up new opportunities for own Air Forces.

Ukraine’s Energy Minister Volodymyr Demchyshyn announced intentions to attract Chinese partners to complete construction of power units at Khmelnitsky nuclear power station.

Ukraine’s Energy Minister Volodymyr Demchyshyn announced intentions to attract Chinese partners to complete construction of power units at Khmelnitsky nuclear power station.

Also, in January-September this year, Ukraine’s agricultural exports to China increased by 2.4 times to $1.055 billion, according to the Ministry of Agrarian Policy of Ukraine.

However, many experts and businessmen complain that the state assistance to develop real cooperation with China is still weak. The lack of an attractive investment climate is another problem. Unfortunately, this is not only an issue of Ukraine’s relations with China. It’s about generally low efficiency of government officials at various levels.

Anyway, amid China's increasing interest in Ukraine, as well as reduced Russian influence on relations between Kyiv and Beijing, Ukraine once again has a good chance to make up for the economic losses on the Russian market by developing trade and diverse cooperation with China.

Repeating old mistakes will cost too much.

Roman Rukomeda

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