New Revelations of China’s Growing Interests in Ukraine

Chinese billionaire and co-founder/former executive chairman of the Alibaba Group, Jack Ma, visited Ukraine on November 7. During his trip, which, started in Kharkiv, he attended the Kyiv International Economic Forum, where he delivered a keynote speech (Kh.suspilne.media, November 7). While in Kharkiv, Ma met with students of the Karazin Kharkiv National University. The event highlighted immense public interest in the Chinese guest: approximately 700 students completely packed the university’s auditorium to hear Ma’s reflections on various business-related topics, education, and the place and role of individuals in the new digital world. During his speech, Ma expressed his admiration of Ukraine and pledged to boost and promote the East European country “as a business venue that wields huge potential” (Delo.ua, November 8). Later, while speaking at the Kyiv International Economic Forum, he addressed many similar issues and explicitly alluded to the necessity to deepen ties between Ukraine and China (Thepage.com.ua, November 9).

It is not only Alibaba Group’s co-founder, but his entire corporate enterprise that has been enjoying increasing popularity among Ukrainians. Specifically, during the last ten months, the number of orders made by Ukrainians on AliExpress (an online retail service based in China that is owned by Alibaba Group) has increased by 70 percent. Consequently, Ukraine is now the world’s second-largest source of growth in the number of orders on AliExpress (Epravda.com.ua, November 11).

Within the scope of his visit, the Chinese billionaire also met with Ukrainian President Volodymyr Zelenskyy. Ukraine’s leader expressed vivid interest in establishing joint educational projects, particularly in the area of information technologies. And he proposed to Ma to open a research-and-development (R&D) center in Ukraine for expanding Alibaba’s operations in Europe (President.gov.ua, November 8).

Aside from visiting universities and holding top-level meetings, the Chinese businessman visited Ukraine’s first innovation park, UNIT.City; he was also awarded the title of “honorary professor” at Petro Tchaikovsky National Music Academy of Ukraine. Although the initial idea for Jack Ma to visit the Music Academy apparently came from the students, it was organized with the help of Chinese partners—specifically, Zhejiang Yongchangli Co. Ltd., headed by corporate President Zhao Yongqian. The latter also arrived in Ukraine for an official visit. The main purpose of Zhejiang’s trip was reportedly to discuss the next steps of Ukrainian-Chinese cooperation (Knmau.com.ua, November 14).

Bilateral relations (both cultural and economic) between China and Ukraine have increased dramatically during the past few years. In the first quarter of 2019, their trade turnover grew to $2.55 billion, making China the largest single trading partner of Ukraine. China’s total share of Ukraine’s foreign trade reached 10.6 percent in early 2019. Thus, among the countries with which Ukraine has the highest volumes of economic exchange, China, for the first time, overcame Russia (Russia’s share during the same period equaled 9.7 percent). But this trade relationship remains rather lopsided: Ukraine’s trade balance with China is negative, with $1.93 billion in imports from China between January and March, and $621 million in exports to the East Asian country (Hromadske.ua, September 26). Moreover, Ukraine was hoping to attract foreign direct investments (FDI) from China, but Beijing, despite many loud statements about numerous planned projects, remains a relatively minor investor, with less than $18 million (2018), or just 0.06 percent of the total FDI in Ukraine (Silkbridge.info, December 14, 2018). Most such projects either remain only “on paper” or frozen. Some are developing extremely slowly (see EDM, September 6).

Certainly, economic involvement in Ukraine forms the foundation for a broader promotion of China’s influence in the East European country. And Japanese commentator Eiji Furukawa argues that Ukraine has become a geopolitical battleground, where China and the United States are competing for influence (Nikkei.com, September 3). By increasing its economic influence, Beijing is also boosting its geopolitical impact on Kyiv. As part of a wider strategy, China uses multiple tools and elements of soft power in Ukraine, including the development of strong educational and cultural ties, promotion of the Chinese language, educational exchanges and media expansion.

The policy of “soft power” is perceived by the Chinese leadership as one of the most effective means of implementing its foreign policy strategy. During the last year, several new Chinese cultural and research centers opened their doors in Ukraine. Among them are the Ukrainian-Chinese Center for Engineering Innovation at the National Technical University of Ukraine “Igor Sikorsky Kyiv Polytechnic Institute” and the Confucius Music Center at the National Music Academy of Ukraine (Ukrinform.ru, May 24; Knmau.com.ua, accessed November 17). Apart from that, it was recently announced that a new Confucius Institute (widely considered to be an integral element of Chinese soft power abroad—see China Brief, July 6, 2012) is to be opened in Vinnytsia National Technical University, which will make it the seventh in Ukraine (Day.kyiv.ua, October 9). Also, in order to be able to spread foreign policy propaganda abroad, special attention has been given to strengthening Chinese influence in the foreign media space. On November 15, a meeting between representatives of the State Committee for Television and Radio-Broadcasting of Ukraine and a delegation from the People’s Republic of China was held in Kyiv. Members of the China Commerce Association (which was established in Ukraine in 2015 with the support of the government of China) were also present during this meeting. The participants discussed the possibility of cooperation and establishing broadcasting exchanges (Comin.kmu.gov.ua, November 18).

During the last five years, Beijing has multiplied efforts to increase its presence in Ukraine. Namely, China extensively relies on a combination of means consisting of both tangible (seemingly lucrative economic projects) and intangible (cultural and scientific cooperation) instruments. Theoretically, Ukraine, with its strong need for FDI and scientific expertise, would benefit from expanding economic and scientific cooperation with China. But one aspect the government in Kyiv may need to keep in mind is the cost Ukraine should be expected to pay if (or most likely when) it finds itself tightly embroiled in various China-led projects.