News / Economy

Ukraine Looks to China for Money as Debt Crunch Looms

Protesters cover an entrance to the Cabinet of Ministers with a huge EU flag in Kyiv, Ukraine, Dec. 2, 2013.
Protesters cover an entrance to the Cabinet of Ministers with a huge EU flag in Kyiv, Ukraine, Dec. 2, 2013.
Reuters
Ukrainian President Viktor Yanukovich will head to China on Tuesday looking for loans and investment, despite the massive protests unleashed by his decision not to sign a trade pact with the European Union.
 
Protesters blockaded the main government building in Kyiv on Monday and brought traffic to a halt, seeking to force Yanukovich from office, after hundreds of thousands demonstrated on Sunday against his decision to turn away from the EU towards Russia. Ukraine's currency and bonds came under pressure, along with share prices.
 
But the tug of war between Brussels and Moscow for influence in Ukraine has so far done little to alleviate its looming debt crisis, and Yanukovich confirmed on state television on Monday that the visit would go ahead.
 
“Yanukovich is trying to show that the European Union and Russia are not the only possible partners for Ukraine,” said Volodymyr Fesenko of Ukraine's Penta think-tank.
 
However, he said Beijing may now demand assurances over Ukraine's political and economic stability, adding: “Ukraine is unlikely to secure direct financial aid [from China].”
 
Beijing has already provided the former Soviet republic with loans worth $10 billion, but the government must find more than $17 billion in 2014 to meet gas bills and debt repayments.
 
Including the private sector, Ukraine must make debt repayments of more than $60 billion next year, equivalent to a third of its gross domestic product.
 
Opposition leaders called on Sunday for Yanukovich and his government to resign. A pro-Europe rally of about 350,000 people, marred by clashes between protesters and riot police,  was the biggest protest in the capital Kiev since the “Orange Revolution” of nine years ago.
 
"Bad time to go"
 
“It is a very bad time to go abroad. The president's absence may make talks with the opposition much more difficult,” said another Ukrainian political analyst, Gleb Vyshlinsky.
 
Russia wants to draw Ukraine into a Moscow-led customs union and prevent it drawing closer to the EU, a move that would signal a historic shift towards the West and away from Kyiv's former Soviet masters in Moscow.
 
Ukrainian Prime Minister Mykola Azarov, who backs closer economic ties with Russia, said at least 20 economic and trade agreements should be signed during the visit to China, including a treaty on friendship and cooperation.
 
Ukraine had a $15-billion standby agreement with the International Monetary Fund, but this was frozen in 2011 over Kiev's refusal to end subsidies and raise household gas and heating prices.
 
During a visit to Kyiv last month, the IMF once more urged Ukraine to raise gas prices for domestic consumers and introduce a flexible exchange rate for the hryvnia currency, steps that the government has rejected.
 
A high-ranking Ukrainian government delegation visited China in September, when China's Export-Import Bank provisionally offered a $3 billion loan to help restore Ukraine's irrigation system.
 
The loan has to be repaid over 15 years. Agriculture Minister Mykola Prysyazhnyuk said the loan would be used to install and repair irrigation systems in southern Ukraine, with the aim of increasing grain output by 12 million tons, or around 50 percent.
 
Last year, China loaned Ukraine $3 billion for the agriculture sector and $3.7 for projects in the energy sector. As part of the deal, Ukraine exports around 4 million tons a year of maize to China.

You May Like

Multimedia Obama, Modi Resolve Nuclear Deal Issues

Leaders find resolution on issues of liability of suppliers to India in event of nuclear accident, US demands to track whereabouts of material supplied to country More

WHO's Late Efforts in Tackling Ebola Highlight Need for Reform

Health experts debate measures to reform agency’s response to global public health emergencies in special one-day session on deadly outbreak More

One Tumultuous Year in Power for CAR's President

As sectarian violence raged across Central African Republic, interim President Catherine Samba-Panza has Herculean task: to end civil war and put country back on right track More

This forum has been closed.
Comment Sorting
Comments
     
by: Jonathan huang from: Canada
December 03, 2013 1:12 PM
Cooperate with China is better for Ukraine than with either EU or Moscow.
We Chinese like Ukraine.


by: 爱你中国
December 02, 2013 2:53 PM
"Last year, China loaned Ukraine $3 billion for the agriculture sector and $3.7 for projects in the energy sector", I just wonder what 3.7$ can do in the energy sector?

In Response

by: Jean-Claude Meslin from: Brignogan-Plages
December 02, 2013 4:33 PM
It seems to me that the ukraine 's troubles are tied to something much bigger than an association with Russia or United Europe. Every intelligent person know that E-U which go from Tahiti to Island Georgia etc. is a big mess which will never be credible. Its funding states are already sick of it. In 1970, it was written Europe will be Americanized or will never be. So seeing Ukraine united to E-U and Russia will be a tragedy for some living in Washington and New-York...A dirty chess game is still going on.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Worldwide Photo Workshops Empower Youthi
X
Julie Taboh
January 23, 2015 11:08 PM
Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video Worldwide Photo Workshops Empower Youth

Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video US, Japan Offer Lessons as Eurozone Launches Huge Stimulus

The Euro currency has fallen sharply after the European Central Bank announced a bigger-than-expected $67 billion-a-month quantitative easing program Thursday - commonly seen as a form of printing new money. Henry Ridgwell reports for VOA from London on whether the move might rescue the eurozone economy -- and what lessons have been learned from similar programs around the world.
Video

Video Nigerian Elections Pose Concern of Potential Conflict in 'Middle Belt'

Nigeria’s north-central state of Kaduna has long been the site of fighting between Muslims and Christians as well as between people of different ethnic groups. As the February elections approach, community and religious leaders are making plans they hope will keep the streets calm after results are announced. Chris Stein reports from the state capital, Kaduna.
Video

Video As Viewership Drops, Obama Puts His Message on YouTube

Ratings reports show President Obama’s State of the Union address this week drew the lowest number of viewers for this annual speech in 15 years. White House officials anticipated this, and the president has decided to take a non-traditional approach to getting his message out. VOA White House correspondent Luis Ramirez reports.
Video

Video S. Korean Businesses Want to End Trade Restrictions With North

Business leaders in South Korea are calling for President Park Geun-hye to ease trade restrictions with North Korea that were put in place in 2010 after the sinking of a South Korean warship.Pro-business groups argue that expanding trade and investment is not only good for business, it is also good for long-term regional peace and security. VOA’s Brian Padden reports.
Video

Video US Marching Bands Grow Into a Show of Their Own

The 2014 Super Bowl halftime show was the most-watched in history - attracting an estimated 115 million viewers. That event featured pop star Bruno Mars. But the halftime show tradition started with marching bands, which still dominate the entertainment at U.S. high school and college American football games. But as Enming Liu reports in this story narrated by Adrianna Zhang, marching bands have grown into a show of their own.
Video

Video Secular, Religious Kurds Face Off in Southeast Turkey

Turkey’s predominantly Kurdish southeast has been rocked by violence between religious and secular Kurds. Dorian Jones reports on the reasons behind the stand-off from the region's main city of Diyarbakir, which suffered the bloodiest fighting.
Video

Video Kenya: Misuse of Antibiotics Leading to Resistance by Immune System

In Kenya, the rise of drug resistant bacteria could reverse the gains made by medical science over diseases that were once treatable. Kenyans could be at risk of fatalities as a result if the power in antibiotics is not preserved. Lenny Ruvaga has more on the story from Nairobi.
Video

Video Solar-Powered Plane Getting Ready to Circumnavigate Globe

Pilots of the solar plane that already set records flying without a drop of fuel are close to making their first attempt to fly the craft around the globe. They plan to do it in 25 flying days over a five month period. VOA’s George Putic reports.
Video

Video How Experts Decide Ethiopia Has the Best Coffee

Ethiopia’s coffee has been ranked as the best in the world by an international group of coffee connoisseurs. Not surprisingly, coffee is a top export for the country. But at home it is a source of pride. Marthe van der Wolf in Addis Ababa decided to find out what makes the bean and brew so special and how experts make their determinations.
Video

Video Yazidi Refugees at Center of Political Fight Between Turkey, Kurds

The treatment of thousands of Yazidis refugees who fled to Turkey to escape attacks by Islamic State militants has become the center of a dispute between the Turkish government and the country's pro-Kurdish movement. VOA's Dorian Jones reports.
Video

Video World’s Richest 1% Forecast to Own More Than Half of Global Wealth

The combined wealth of the world's richest 1 percent will overtake that of the remaining 99 percent at some point in 2016, according to the anti-poverty charity Oxfam. Campaigners are demanding that policymakers take action to address the widening gap between the ‘haves’ and the ‘have nots’, as Henry Ridgwell reports for VOA from London.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid

World Currencies

EUR
USD
0.8930
JPY
USD
117.98
GBP
USD
0.6673
CAD
USD
1.2445
INR
USD
61.498

Rates may not be current.