Ukraine Inks Infrastructure Deal with China After Biden Snubs Zelensky for Putin

Ukrainian President Volodymyr Zelensky talks to journalists in his office in Kiev on June 14, 2021 before his interview for three international agencies, including AFP, prior to a summit with US President Joe Biden and Russian President Vladimir Putin on June 16. (Photo by Sergei SUPINSKY / AFP) (Photo by …
SERGEI SUPINSKY/AFP via Getty Images

Chinese government media outlets confirmed Sunday that Beijing’s Ministry of Commerce had recently signed a reportedly expansive deal to invest in nationwide infrastructure in Ukraine, following the latter’s decision not to co-sign a statement at the United Nations condemning China for committing genocide.

The Global Times and China Daily offered no details as to the new infrastructure deal between Kyiv and Beijing, reportedly signed June 30, just days after Ukraine’s surprise exit from the genocide statement. The outlets instead emphasized that the deals showed that the government of President Volodymyr Zelensky was willing to increase China’s influence in his country in the name of growing Ukraine’s economy. Ukraine has been a partner in China’s Belt and Road Initiative (BRI), a global infrastructure debt trap program, since at least 2018, when China established a BRI “promotion center” in the country.

Zelensky, who became president after a long career as a television comedian in 2019, began his tenure with hostility towards China, particularly opposing a Chinese state-affiliated corporation’s attempt to purchase Motor Sich, a strategic company that manufactures jet engines and other valuable technology used in the Ukrainian armed forces. Zelensky imposed unilateral sanctions on China over the deal this year.

The Zelensky administration’s abrupt shift in attitude towards Chinese investment follows the president’s condemnation of American counterpart Joe Biden last month for failing to impose sanctions on Russia’s Nordstream 2 fuel pipeline. When completed, the pipeline will grant Russia essentially unobstructed access to key European markets, icing out Ukrainian competition and making key American allies like Germany more dependent on Russian natural gas. Zelensky has asserted the pipeline is a national security threat to Ukraine — currently at war with Russian-backed separatists in its east and partially colonized by Russia in Crimea — and to the United States.

Biden rejected an urgent request from Zelensky to meet in person prior to his summit with Russian leader Vladimir Putin on June 16. Shortly after meeting Putin, Washington, DC, publications began to report that Biden had chosen to freeze lethal aid to Ukraine, pivotal in the eastern Donbass war against Russian allied militias.

Shortly after reports that Biden froze aid to Zelensky, Ukraine withdrew from a statement condemning China at the United Nations. On Sunday, the Global Times revealed the signing of a new economic deal between Kyiv and Beijing.

“The two countries will encourage domestic enterprises and financial institutions to actively cooperate on road, bridge and rail transit projects,” according to the Chinese propaganda outlet, “and provide necessary help and support for the implementation of cooperative projects, which are expected to have broad development prospects, according to the agreement.”

The Global Times claimed the deal had already been signed last week, but provided no other details on any specific transit projects, how much they would cost, or how Ukraine would pay for them. China Daily, another Chinese government newspaper, also failed to identify any new projects Kyiv had just signed up for, but identified one major project currently in development: a waste power plant.

“The project, valued at about $238 million, includes the construction and design of two waste power generator units. Each unit is able to process 750 tons of waste a day to generate electricity in the country’s Oblast region,” China Daily claimed. An oblast is an administrative regional unit in Ukraine; no such unit is actually named “Oblast,” so it not clear what region China Daily was referring to.

BRI projects are notoriously secretive, but the little that has trickled out to international media suggests China forces developing nations to sign contracts that require them to take out extremely large loans at high interest rates with Chinese banks, then use that money to pay Chinese companies to do the work the projects require. Many countries cannot pay the debts when the project is done, leaving them vulnerable to property seizures. Chinese officials have refused to forgive BRI debts even in the face of significant economic stress on nations affected by the Chinese coronavirus pandemic, which began in the country in late 2019.

The Global Times did note that Ukraine has already signed over $2 billion in deals with Chinese companies.

“New contracts signed by Chinese companies in the Ukrainian engineering market have exceeded $2 billion for two consecutive years, making positive contributions to the country’s economic development, data from the [Chinese Ministry of Commerce] showed,” according to the paper.

Chinese “experts” celebrated the deal with Ukraine in remarks to China Daily.

“The growing involvement of Chinese companies in Ukraine’s infrastructure market will strongly support the Eastern European country’s major construction program and help build closer bilateral economic ties in the coming years, experts said,” according to the propaganda outlet. “As the Ukrainian government pushes hard on the Big Construction program to promote the upgrading of its infrastructure, in particular transport and power generation, there is more space for the two economies to work together over the coming years.”

While Ukraine has been a BRI member for years, Zelensky’s administration had proven far less friendly to the Communist Party, a Russian ally, than its predecessors before Biden’s meeting with Putin. The Motor Sich incident had resulted in outraged statements from Beijing and at least one legal action against Ukraine in an international court, according to Chinese state media. Zelensky chose to sanction Beijing Skyrizon Aviation, a Chinese-affiliated company believed to have ties to the People’s Liberation Army (PLA), for its attempts to buy out Motor Sich — a rare instance of a moderately-sized country imposing sanctions on the world’s second-largest economy. A Skyrizon statement referred to the sanctions as a “barbaric robbery.”

As Skyrizon already owned a controlling stake in Motor Sich, purchased under Zelensky’s predecessor Petro Poroshenko, Zelensky seized Motor Sich as a government company in March of this year to prevent further Chinese intrusion in its operations.

Kyiv appeared to warm up to the Chinese Communist Party after Biden passed on sanctioning Nordstream 2 and declined to meet Zelensky before meeting with Putin. Zelensky requested the meeting in an interview with the Washington outlet Axios, stating he was “very unpleasantly surprised” by Biden.

Biden went forward with the meeting with Putin. Shortly after, Politico reported that Biden had chosen to freeze up to $100 million in lethal aid to Ukraine.

Biden reportedly invited Zelensky to the White House for a summit in July. Ukrainian Foreign Minister Dmytro Kuleba told reporters on Monday that the two countries are currently working out the details of the summit but that the two sides have not yet chosen a date or confirmed any details about the visit.

“We do not know the dates yet. We were offered the end of July, but we have not received specific days when this visit will take place,” Kuleba reportedly said. “However, we are waiting for confirmation of the date soon and the U.S. administration is already actively working with us to prepare for this visit.”

Kuleba played down the importance of meeting with Biden.

“It’s not just a visit to President Biden. It’s a visit to America in the broadest sense,” he asserted.

Follow Frances Martel on Facebook and Twitter.

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