Ukraine and China Moving Toward Free Trade

Consultations on the establishment of a free trade zone between the two countries started Friday


Ukraine and China have started talks on a future free trade agreement. In Beijing, on the sidelines of the China International Import Expo, Ukrainian Economic Minister Stepan Kubiv initiated discussions to start drafting the free trade pact during a meeting with Chinese Vice-Premier Liu He.

The deal is expected to take off after more talks in Beijing next year.

“We consider the 8th of November, 2018 to be the start of consultations regarding a free trade area between Ukraine and China. This will define Ukraine as a country of transit to the European Union,” Kubiv said.

Even without a trade deal, China-Ukraine trade turnover could increase to $20 billion by the end of 2023, Kubiv said.

China appears to be well on its way to becoming Ukraine’s top trading partner.

The Ukrainian Chamber of Commerce and China have also signed a memorandum of cooperation.

“The Chinese know that Ukraine makes the biggest planes, we have rocket technology, nuclear energy technology, and machine building. Ukraine is not (only) a bread basket. It can become one big international supermarket. People in China already know about Ukrainian sunflower oil. And its market share continues to grow,” Hennadiy Chyzhykov, the President of Ukraine’s Chamber of Commerce said.

More than 300 Chinese entrepreneurs gathered at the international expo’s Ukraine-China Business Forum. Some expressed readiness to invest in the Ukrainian economy in the immediate future.

Kyiv considers China to be a strategic partner. Over the past eight months, the turnover between the two countries exceeded $6 billion and it is expected to almost triple in the next five years.

“In the next 15 years, China will import $30 trillion worth of goods,” Gao Yan, China’s Council for the Promotion of International Trade said, “and $10 trillion worth of services. This creates massive opportunities for other countries, including Ukraine.”

In the coming years, Ukraine expects to attract over $7 billion worth of Chinese investment. Energy and infrastructure are named as the key areas.

“The European Union, which is the world’s biggest market is interested in Ukraine. So creating joint factories with Ukraine one can access the entire European market,” Volodymyr Stavniuk, the Head of Board State Finance Institution for Innovation said.

Another project discussed at the forum was the construction of the 4th metro line in the Ukrainian capital Kyiv. The cost is estimated at $5 billion.

“The documents for this project have just been received, they contain preliminary calculations for the feasibility study,” Dmytro Davtian, the Deputy Head of Kyiv Administration said.

A $500-million-investment project has also been signed at the Expo relating to the construction of the Dniester hydroelectric power station.

“If we build three units as discussed here, we will save from 1.1 to 1.2 million tons of coal and about $50 million worth of gas annually,” Ihor Syrota, the CEO of Ukrhydroenergo said.

According to Ukraine’s Ministry of Economy, total trade turnover for China and Ukraine is expected to surpass $8.7 billion by the end of the year.

By 2019, that number will reach more than $10 billion.

Source UATV
date 09.11.2018
categories Economics, News releases
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