Breakdown of Ukraine-EU association could benefit China – Forbes

15:55 28.11.2013
Ukraine

The suspension by Ukraine of preparations for signing an Association Agreement with the European Union is a beneficial decision for China in the long term, according to an article in the American magazine Forbes, titled “Scrapped EU-Ukraine Trade Deal is Good News for China”.

“The short term effect of Yanukovych's reneging will be a chill in economic and diplomatic ties with the EU and US. It will also prolong Russian influence over Ukraine's economic and foreign policy. But an equally important long-term beneficiary of Ukraine's decision could prove to be China,” the article's author writes.

By saying this the author comes from China's interest in Ukrainian agriculture and energy. “At first blush, China and Ukraine may appear to be awkward bedfellows, but Ukraine's potential as a major source of energy and agricultural products has already attracted significant Chinese investment,” the article said.

Forbes noted that in August, Ukraine's State Food and Grain Corporation signed a $2.6 billion deal with the Chinese Xinjiang Production and Construction Corps to support priority projects in Ukrainian agriculture. The author added that the Chinese investment - the single largest in the sector - is aimed at modernizing agricultural practices to increase productivity.

“That investment could position Ukraine to become one of the world's top producers - and Europe's biggest producer - of basic grains, chicken and dairy products within the next ten years,” the author said.

Given the Ukrainian-Chinese projects in the energy sector, in particular the construction of plants for the gasification of coal and the development of shale gas in Ukraine, Forbes also concludes that “taken together, these developments suggest that the government's goal of becoming a net exporter of gas by 2025 or 2030 is within reach. China, the world's largest energy consumer, has clearly taken notice.”

Adapted from ukrinform.ua

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