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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

“Chinese” mathematics

Three ministers and the president will bring to Ukraine the agreements and memorandums worth eight billion dollars
9 December, 2013 - 18:14
Photo by Artem ZHUKOV

The Ukrainian media are exercising in publishing headlines reading that Viktor Yanukovych is leaving China empty-handed and the whole government delegation is coming back home. It is not true. The headings like “China will not give any money to Yanukovych because of his ‘revolution’” are mistaking the wish for the reality.

The planned range of documents on cooperation in energy, aircraft engineering, agriculture, and humanitarian sphere will not be replaced by a single formal Agreement on friendship and cooperation between Ukraine and China without any specific obligations of the two sides. Nearly all the abovementioned documents were signed on December 6. The detailed list of the signed documents can be found on the website of the Presidential Administration. We will only mention that among the number of framework agreements and formal memorandums there are very specific agreements, as a contract between PJSC Nizhynsky Oil-Fat Plant and Sinochem Guangdong Co Ltd providing the exportation of linseed oil (raw and refined) to the Chinese People’s Republic in 2014-15.

“Certainly, we signed the documents that had been prepared, they extend the economic cooperation. We have not calculated the money equivalent yet, but we count on about eight billion dollars of investments into the Ukrainian economy. The documents that are being prepared will significantly increase the amount of investments,” Viktor YANUKOVYCH commented on the signed agreements.

One of the memorandums concerns the engine-building for helicopters. According to the Minister of Economic Development and Trade of Ukraine Ihor Prasolov, the serious work is being done to prepare the cooperation between Ukraine in China in aircraft engineering (by the way, the president was accompanied to China by three ministers: the Minister of Energy Eduard Stavytsky, the Minister of Agro-Industrial Complex Mykola Prysiazhniuk, and the Minister of Economy Ihor Prasolov).

“This is a very important direction and we have serious groundwork and technological innovations. The president and I have visited AVIC plant in Xi’an [one of the largest Chinese companies in aircraft engineering. – Ed.], the questions of aircraft engineering and cooperation with Ukraine are also being discussed,” Ihor Prasolov told the journalists before the business forum.

Besides, according to the minister of economy, “China is interested in Ukrainian engines for military machines. The representatives of the Ukrainian defense industry have been here and the negotiations are in progress,” Prasolov summed up.

Also, according to the minister, Ukraine and China will build a deep-water port together. “The agreement concerning the construction of a deep-water port is going to be signed. The port infrastructure is not sufficiently developed in our country but the export volumes of agriculture products are growing and we really need the ports that will transship cargos. It is provided that we will receive very large investments that will help to increase our export and, accordingly, external accounts of our country.”

However, Ihor Prasolov did not specify the conditions of the project, in particular, the terms of its implementation and its cost. “Now everything is being discussed at the level of memorandums, meaning that specific terms, prices and things like that will be discussed later, when the contracts specifying the obligations of parties are signed,” the minister explained.

Prasolov’s colleague, the Minister of Agrarian Policy and Food of Ukraine Mykola Prysiazhniuk found it more difficult to report to the journalists about the trip. Terrible rumors about his agreements with China are being spread not only in Ukraine. The European and Chinese media have issued lots of materials that Ukraine is taking a loan from China secured on the lease of land for 50 years. The amount of land is shocking – from 100 to 300 thousand hectares that are equal to the surface of one or three Dnipropetrovsk regions. “The lease of the land by Chinese companies is not discussed at any level. We are discussing financial cooperation and mutual export of agricultural products,” the minister answered when asked a clarification question. According to Prysiazhniuk, It is very important for Ukraine to come to the Chinese market: “We are the third country that has the right to export cereals to the Chinese market. I believe that this cooperation will have the future.”

“According to the program of cereals corporation, we have the obligations to annually supply six million tons of cereals. As for the irrigation program, it is financially beneficial. We take a loan, restore our irrigation system and pay the loan off in 15 years: 2.5 billion dollars with 6.5 percent of interest per year. Today this interest is very advantageous,” Prysiazhniuk assured. According to him, this cooperation will allow Ukraine to solve the problem of irrigation by 85 percent. “The old equipment needs to be replaced at one million hectares of land. We will have additional 15 million tons of cereals,” the minister summed up.

The Minister of Energy and Coal Industry Eduard Stavytsky reported that Ukraine had signed the agreement on construction of plants for synthesized gas production with the Chinese CNCEC. “This is the beginning of the practical implementation of the common project. The agreement defines the terms of preparation works to start the construction,” he commented. It is planned that this project will be a part of the Ukrainian program aiming at replacing the consumption of the natural gas with the coal provided by the credit agreement between the China Development Bank and NSC Naftohaz Ukrainy worth 3.656 billion dollars, signed in December 2012. According to the minister, the implementation of this project will allow Ukraine to annually save up to four billion cubic meters of natural gas, ensure the market for 10 billion tons of coal every year and create over 2,000 working places.

By Artem ZHUKOV, The Day, Kyiv-Beijing; Alla DUBROVYK, The Day
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