China may not yet have acted upon the eurozone’s pleadings for a bailout, but that doesn’t mean Beijing is playing a passive role in Europe. Indeed, as it expands its economic presence and political influence in the EU, it is also rapidly enlarging its presence in (and attraction) to Eastern Europe. Indeed, while China’s interests and motives in Russia and Central Asia are well known, its growing stake in Eastern Europe generally – and Ukraine and Belarus in particular – have received much less attention.
By 2009, China had begun to show an economic interest in former Soviet republics in Eastern Europe, lending Moldova, for example, $1 billion at 3 percent interest over 15 years. But China’s interest in Ukraine and Belarus as production centers of advanced Russian technology – and as places where China could examine Russian weapons and recruit Soviet scientists – dates back to 1992.
As Russian arms sales to China continue to decline, maintaining access to, and commercial interaction with, these states gives China at least some access to Russian military and technological developments in the weapons field. Since Russia now sells many fewer weapons and technologies to China, drawing closer to Ukraine may offer it a back door into the Russian defense sector either through licit or illicit means. Ukraine needs China’s arms market, and China needs the systems it can buy. This mutual interest became apparent during President Hu Jintao’s visit to Ukraine in June 2011. At his meetings with Ukrainian President Viktor Yanukovych, plans were announced to sell China Al-222-25 aircraft engines and lightweight supersonic aircraft. Ukraine is also discussing selling the license for this engine’s production to China, a move that conforms to other Chinese arms buys from Russia, where China sought to buy the license for the product. The condition for this sale is that China buys 250 engines.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
But beyond arms sales, both sides have compelling commercial motives for coming together. If China is to succeed in building its version of the Silk Road, or railway ties straight through to Europe, it must traverse either Ukraine or Russia. Ukraine is a far less overbearing partner than Russia, and China is therefore deeply interested in positioning itself more in Eastern Europe as that area develops and as international transportation and communications projects bring it closer to China. In that way, it benefits from establishing ties to plants with lower production costs than in Western Europe, and takes advantage of large and growing markets in Ukraine, European Russia and neighboring countries.
Ukraine, for its part, is eager to elbow its way into those burgeoning Asian and Chinese markets to help secure a major economic partner beyond Russia to counter Moscow’s efforts to monopolize or dominate trade. Indeed, Yanukovych admitted that he hopes to expand what he calls tripartite cooperation among Ukraine, China, and Russia. Such projects would include railroad transit projects for more rapid delivery of products and selling Chinese pipes and compressors for the projected Russo-Chinese gas pipeline.
Yanukovych, meanwhile, is pursuing Chinese investments in Ukraine for massive infrastructural projects like those China has made in Central Asia, such as gas turbines and high-speed railroad tracks between Boryspol Airport and Kyiv. China acceded to Ukraine’s initiative for improved ties and the two presidents signed a strategic partnership agreement. They also signed accords on $3.5 billion worth of deals, including funding for the high-speed railway to Boryspol airport, unspecified energy deals and $12 million in financial aid to Ukraine.