Chinese investments are on approach to Ukraine

Chinese investments are on approach to Ukraine

On May 23, the investment session «Ukraine - China: New Silk Road» gathered UA and Ch. officials and businessmen, in the frames of preparations for Kyiv International Economic Forum

The prospect of Ukraines integration into the project "New Silk Road" became the subject of lively discussions between Ukrainian and Chinese businessmen and officials at the Investment session which took place in the capital Kyiv city on May 23, 2016 under the auspices of the Kyiv International Economic Forum.

In 2015, the trade turnover between Ukraine and China amounted to more than $ 6 bln. China is in the top three trade partners of Ukraine and is one of the largest partners of Ukraine in current investment projects, according to Deputy Minister of Economic Development and Trade of Ukraine Yulia Kuznetsova. As of present, there are several jointly held projects amounting to about $7 bln undergoing on various implementation phases being coordinated at the highest state levels. However, both Ukrainian and Chinese businessmen are sure that these amounts can be increased substantially.

Mister Liu Jun, adviser of Office on trade and economic section of Embassy of People’s Republic of China in Ukraine, mentioned that between Ukraine and China there was a great number of the unrealized possibilities for development. There are lots of perspective spheres for expansion of intergovernmental collaboration: energy (in particular the construction of hydropower plants), railways, ports, roads, electric vehicles, utilization of garbage, public transportation and others.

The participants were in agreement that the trade turnover between the countries can be increased multi-fold provided to establish a meaningful dialogue between Ukraine and China at all levels. Creation of the Association of Economic Cooperation of the New Silk Road, which unites 21 states, including Ukraine, would be one of the instruments of this process. The official launch of the association project will take place in Beijing in June, 2016.

Xiong Meng, the vice-President and Secretary General of China Federation of Industrialists, announced the all-expected event in China during the Kyiv venue. The amount of $ 46bn is collected to finance the project activities, and online communication platform has already been launched for the participants, told Xiong Meng.

Chinese investments are on approach to Ukraine

Mr. Zhang Zhonghua, a representative of the Chinese company "Anhui foreign construction corporation," mentioned South Korea, where the trade turnover with China makes $ 300bn, that is, in 50 times exceeding cooperation with Ukraine, despite the fact that Ukraine is several times larger in area, and on the amount of population equals to South Korea.

Also Zhang Zhonghua explained why the Chinese investors do not hurry to Ukraine, winning applauses for that from the participants: «At first the fundamental issues must be solved. Investments are not coming because we don’t quite understand you, and you don’t understand us. Firstly, being in China, we often see MPs fighting in the parliament. And we believe that it is mandatory to be very strong and know how to fight in order to conduct business successfully here. Secondly, in China all people think that now it’s war in Ukraine. And a lot of them dissuaded me to come here. And I am glad that we have a big delegation from China of those who are not afraid to die (joking).

Every day I send multiple messages and pictures to my wife and friends saying that it’s beautiful and quiet in Ukraine now. Next, we do not understand why your ministers are so young - they are about 30-35 years old replacing one another too often. And the most uncertain thing for us is why the corrupt officials are not shoot and executed here at all (the whole room loudly applauded and laughed, realizing that in China the death penalty for such crimes is widely put into practice. Meantime a few representatives of Ukrainian authorities, who always stay at ranks despite changing powers, silently dropped their heads).

In turn, Zhang Zhonghua blamed that in Ukraine there was a common perception of low quality of products coming from China and emphasized, «Soon, Huawei will be like Apple».

Despite the negative investment remarks, Zhang Zhonghua offered to negotiate investments prospects after the venue with the governor of Cherkasy region (quarrying sites) and representatives from Lviv (construction of high-speed railway line to Poland and launching a business tourism center) right after the performance of the Ukrainian representatives.

Ukrainian officials and businessmen offered to consider industrial heritage of Ukraine and proposed Chinese counterparts to start modern manufacturing enterprises here. On their part, Ukrainians promised to provide the necessary infrastructure, including Bila Tserkva INDUSTRIAL PARK from UDP, as well as qualified and inexpensive labor (labor costs lower than in China) and a minimum of interaction with officials.

According to Vladislava Rutitska, Deputy Minister of Agrarian Policy and Food of Ukraine, Chinese investment in the Ukrainian agricultural sector in aggregate amounted to only $ 100mln, and agricultural products exported to China cost only $ 1 per capita a year, while other developing countries supply agricultural products worth $ 5. The Ukrainian side tried, in every possible way, to convince the Chinese partners to invest in the Ukrainian agricultural products processing.

Recently, Chinese company Cofco invested $75 mln into a grain terminal in the Mykolaiv region of Southern Ukraine.

Chinese investments are on approach to Ukraine

After all, Sergei Savchuk, the chairman of the State Agency on Energy Efficiency and Energy Savings, called to invest into the renewable energy revealing $ 16bln national plan drafted by 2020, for the sector. There are about 6,5mln individual households in Ukraine. It allows, in the prospect, to create a huge market of residential solar panels that can be produced in Ukraine.

The Chinese representatives of delegations were headed by the dignitaries of Chinese federation of industrialists (CFIE). It also included representatives of the Chinese Embassy in Ukraine and about two dozen large Chinese companies, such as COMPLANT, and Anhui Foreign Economic Construction Group (AFECG), delegates from Office of foreign affairs of Heilongjiang Province.

On the part of Ukraine: Vladimir Omeljan, Infrastructure Minister; Yuri Vaskov, his deputy; Vladislava Rutitska, Deputy Minister of Agrarian Policy and Food; Yulia Kovaliv, Deputy Minister of Economic Development and Trade; Roman Chuprinenko, Deputy Minister of Regional Development, Construction and Housing; Anatoly Kinakh, president of the Ukrainian Union of Industrialists and Entrepreneurs (UUIE), as well as delegates from business and regional authorities have attended the venue.

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