Ukraine, China Unite to Boost Infrastructure

Companies encouraged to work together on roads, bridges and rail

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.

The Ukrainian government set up the program, known as Big Construction, in March last year. It is designed to provide funds and works for big construction projects and repair schools, hospitals, stadiums and roads, according to the Ukrainian government.

With the two countries celebrating the 10th anniversary of the establishment of their strategic partnership this year, China's Ministry of Commerce announced on Saturday that the Chinese and Ukrainian governments had recently signed an agreement to deepen collaboration in infrastructure construction.

Under the deal, companies and financial institutions of the two countries are encouraged by their governments to work together on roads, bridges and railways. The move will enrich bilateral economic ties and provide support for the implementation of collaborative projects, the deal's documents said.

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, said Ma Yu, a researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing.

As China and Ukraine have benefited from their strategic partnership and collaboration in the Belt and Road Initiative, economic and trade ties between them have deepened, and collaboration in infrastructure has grown steadily in recent years, China's Ministry of Commerce said.

Chinese companies, including China National Chemical Engineering Group Corp and China National Machinery Industry Corp, have signed contracts with a total value of more than $2 billion in Ukraine's construction project market in each of the past two years, making a valuable contribution to the country's economic growth.

Chinese companies are renowned as being the most efficient in realizing infrastructure projects, and China's Ambassador to Ukraine, Fan Xianrong, said in Kiev late last month that "China has the capabilities, technologies, and very rich experience to implement infrastructure projects in Ukraine".

Against the backdrop of the pandemic, this deal will lay a solid foundation to advance bilateral economic relations, said Ren Xingzhou, former director general of the Institute for Market Economy at the Development Research Center of the State Council.

"It will not only be conducive to the economic growth of the two countries but also help them jointly cope with changes in global economics," Ren said.

Trade volume

The value of China's trade with Ukraine rose 44.8 percent on a yearly basis to $7.24 billion in the first five months of this year, said China's General Administration of Customs. Ukraine's main exports to China were ore, grains, oils and metals, and it imported electronics, machinery, equipment and vehicles from China.

The State-owned China Energy Engineering Corp will complete a waste power plant project in Ukraine in the first quarter of 2023. Once it is completed, it will consume as much as 1,500 metric tons of waste a day.

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.

The Ukrainian government's effort to modernize its energy sector, backed by rich energy resources, will help attract new foreign investors from both China and elsewhere, said Wu Yun, the group's vice-president.