The case, which according to experts has become a political issue between the two superpowers, could cool the otherwise warm relationship between Ukraine and China, and prevent China from advancing its engine technology in helicopters and jet airplanes.
“The US sees China’s influence in Ukraine and the purchase of the company as a threat,” says Nan Tian, a senior researcher at the Arms and Military Expenditure Programme at Stockholm International Peace Research Institute (SIPRI).
Read more: Ukraine’s Motor Sich awarded $800 million contract to support Chinese JL-10 trainer fleet
Ukraine’s security service, the SBU broke up an extraordinatry meeting of Motor Sich shareholders due on January 1 at Zaporizhzhia, initiated by the Chinese investors and Oleksandr Yaroslavsky, a Ukrainian business mogul.
President Zelenskyy, in late January, enacted a resolution by Ukraine’s National Security and Defense Council to impose sanctions against the Chinese investors in Motor Sich. The U.S. imposed similar sanctions in mid-January, leaving China with no possibility of taking over ownership of Ukraine’s lead manufacturer of aircraft engines.
Zelenskyy’s decision came under pressure from the U.S who fears the purchase of Motor Sich by China would advance its military capabilities, according to the Euronews analysis. President Zelenskyy, for his part, vowed that, as long as he is president, neither China nor any other country would be able to take over ownership of Motor Sich.
The SBU says that they are blocking the deal because China has a military helicopter production contract with Russia and, therefore, could share the engine technology with Russia.
Skyrizon, the major Chinese investor company in Motor Sich, said in a statement that Ukraine’s actions “represent a barbaric robbery and a serious violation of the legal rights and interests of Chinese companies operating abroad, an unprecedented disrespect for the principles and rules of international trade.”
Skyrizon and Xinwei Technology are collaboratively suing Ukraine for $3.5 billion for terminating the Motor Sich deal.
How can the U.S. pressurize Ukraine?
The US plays a crucial role in Ukraine's struggle with Russia, and it could be a reason for Kyiv’s stance on the Motor Sich case. However, China has also become a much bigger economic player in Ukraine over recent years. According to the Ukrainian State Customs Service, China was Ukraine’s largest trade partner in 2020 with 11.6 per cent of all trade. The US numbers are much lower.
According to the nonpartisan Congressional Research Serviceo see the big picture here”, says Yuan Jiang. “For Ukraine, it is not about a small military company. It is about its relations with the U.S. Of course, China is much less involved in Ukraine’s politics, or I would like to say China may be reluctant to get involved in Ukraine’s politics. This time, Ukraine’s political concerns may have overtaken their economic concerns. It seems like they have decided to give them this to make them happy. After all, Ukraine is strongly dependent on American help overall.”
What to expect next?
Andriy Buzarov, a Ukrainian expert with KyivStratPro think tank, has a different analysis about the situation.
He does not think US pressure was what had made Ukraine impose recent sanctions against the Chinese investors.
While the expert agrees the U.S. has been pressuring Ukraine for a long time, he believes the reason for the Motor Sich decision is due to the Ukrainian President wanting to send a signal to the new US President Joe Biden that he is on his side.
Yulia Mendel, the chief press officer for Zelenskyy’s administration, denied while speaking to Euronews that Ukraine has been under pressure from the U.S.
Instead, she says the case is a matter of “protecting our state”.
“The misunderstanding over Motor Sich, which was provoked by the actions of certain individuals more than three years ago, is being resolved diplomatically and will not affect the sincere and strong relations between the two countries (China and Ukraine).”
Wang Wenbin, a spokesman for China’s Foreign Ministry, commented on the Ukrainian sanctions against the Chinese investors thus: “China as always opposes unilateral sanctions on Chinese enterprises by foreign governments. We hope the Ukrainian side will uphold the legal rights and interests of Chinese enterprises and investors.”
According to Buzarov, it is likely that the relationship between Ukraine and China will “now be put on ice”.
“I think that this will freeze the relationship between Ukraine and China,” said Buzarov, who fears that China now to a larger extent will ally with Russia against Ukraine.