Ukraine-China: the volumes of goods traded are tremendous. The same are opportunities
According to the results of the previous year, China took the second place in terms of trade of goods with Ukraine, in the total amount of US $7.7 billion. China is a strategic trade partner of Ukraine.
Stepan Kubiv, the Minister of Economic Development and Trade, posted this information on his Facebook page on 7th of August.
Truman Index experts as well emphasize the strategic importance of Chinese direction. As it was mentioned in the latest issue of the journal, the trade in goods with China added up to 8.28% of Ukraine’s exported goods. In particular, Ukrainian export to China increased by 11.3%. Import of Chinese goods to Ukraine increased by 20.5%, with negative balance of trade for Ukraine amounting to US $3.6 billion.
As of December 31, 2017, the economy of Ukraine attracted US $18.2 million of Chinese investments with equals to 0.004% of total investments. From the beginning of the year this index increased by US $1.7 million.
Trade and economic cooperation between China and Ukraine that took place in the last quarter (March - June) was by an array of events:
Ukrgazvydobuvannia declared Sichuan Honghua Petroleum Equipment the winner of a tender for supply power equipment to modernize 15 Uralmash 14E drilling rigs. On the side note, Ukrgazvydobuvannia has worked with Sichuan Honghua before: in summer 2017, the company ordered 10 drilling rigs for US $123.85 million.
China Harbour Engineering Сompany Ltd won the tender for two lots for dredging works in in the Port of Chornomorsk. During open bidding, the Chinese company made the best price offer for both lots. The amount of money saved on the first lot added up to UAH 4,620,365 excluding VAT, and the second one saved up to UAH 36,033,189 excluding VAT.
Ukravtodor, the state-owned roadways corporation, and China’s Xinjiang Communications Construction Group Co. Ltd. signed a contract for an overhaul of the Striy-Ternopil-Kropyvnytskiy-Zamianka section of the national highway network. The contract also includes issue of carrying out a number of the contracted works that Italy’s Todini failed to complete on the Kyiv-Kharkiv-Dovzhansk section.
Chinese company ZTE announced the issuing of a long-term loan to Ukrtelecom. The first phase of financial aid to the Ukrainian telecoms operator was US $10 million. These funds will be directed in financing the joint Ukraine-China projects.
On April 4, DTEK and China Machinery Engineering Company (CMEC) signed an agreement on designing and building a 200 MW solar electricity station (SES) in Dnipropetrovsk Oblast. Total investment in the project will reach €230 million.
In May, Zhongman Ukraine LLC with statutory capital of UAH 30 million was founded in Kyiv. The company is a wholly owned subsidiary of Hong Kong-based Zhongman Petroleum and Natural Gas Group, which participated in two tenders for providing drilling services for Ukrgazvydobuvannia. As a result, Zhongman is expected to sign two contracts worth UAH 981 million. This is the second Chinese contractor that has established a company under Ukrainian jurisdiction. In September 2017, Xinjiang Beiken Energy Engineering, the biggest foreign subcontractor working for Ukrgazvydobuvannia, opened a representative office in Ukraine.
On June 7, Minister of Infrastructure Volodymyr Omelyan met with Mr. Syn Jiu, a vice-president of China Communications Construction Company (CCCC)
Ziyu noted, “Given the FTA between Ukraine and the EU, development of transport infrastructure in Ukraine is a high priority for China because, together with the New Silk Road, this will make access to European markets for Chinese goods significantly easier.”
Therefore, trade and economic cooperation between China and Ukraine is extremely promising. The key is to use the presented possibilities properly.
TRUMAN Index Journal is available for free on demand via e-mail of curator of analytical projects Tetiana Gaiduk tetianagaiduk@truman.ua
