Kiev “snoozed” during China’s offensive on Ukrainian economy


June 21st, 2017 – Fort Russ News –
– Sputnik Italia – – translated by Frederick Assar –

China is the largest investor in a number of sectors of the Ukrainian economy, writes

While authorities in Kiev are fighting against an imaginary “Russian aggression,” the Ukrainian resource leader has become China with a clear purpose and strategy. Chinese loans and investments have surpassed those of the IMF, along with the three billion dollars, obtained by Russia. The risks are minimal and loans are securities of the product itself.

Thus, alternative energy has proven attractive to Chinese investors. By the end of 2016, the Chinese CNBM was granted ownership rights in 10 of the largest solar power stations in Ukraine, with a total capacity of 267 Mw, with a total investment of about one billion dollars.

Financing came in the form of commercial credits: the high tech equipment is the key. After the Ukrainian company could not pay for it, it became the property of Chinese society. “The acquisition of asset control was carried out in exchange for a non-recoverable repayment and unsecured debt for the sum of equipment supplies,” said CNBM General Manager, Junshi Chen.

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The same scheme was used with Ukrtelecom, which in 2015 signed a contract with China Development Bank, China Development Bank and Huawei for the modernization of telecommunications and Internet networks. According to the agreement, Chinese investors would hand over to Urtelecom equipment at a cost of $ 45 million. Ukrtelecom received a $ 50 million loan by the China Development Bank, to be repaid by 2023. At the end of 2016, debt for the loan had already reached nearly $ 13 million. Meanwhile, the total amount of Urtelecom’s guarantees now amounts to 11.8 billion hryvnia, more than 450 million dollars. The entire property of the company is estimated at about 4 billion hryvnia, 154 million dollars.

The Chinese interest lays also in the energy sector. At the end of 2012, Naftogaz reached an agreement with the China Development Bank for a $ 3.6 billion credit for the natural gas substitute program. The company has not used this line of credit. However, four investment offers were presented at the Ministry of Economic Development in 2015, some including the purchase of gas production equipment. At the end of August 2016, China Development Bank extended the credit availability period for Naftogaz until December 25, 2017.

The possibility that Naftogaz will be sold in exchange for equipment can’t be ruled out. In case of non-payment, the Chinese counterpart will have control of the company’s activities.

In addition to this, China’s plans include the set-up of high-tech companies in Ukraine. This is advantageous, firstly, because of the low wages and also because Kiev acts in the free trade zone with the EU, which in turns would allow Chinese products to enter the European market. Chinese capital can also reach the property market. Thus, the growth of Chinese influence in Ukraine seems inevitable.

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