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

China May Be Biggest Winner From Ukraine Crisis

Missile sales, oil and gas shipments are among many areas that may drive Beijing and Moscow closer together in coming years More

Obama Faces Chaotic World, Limits of Power

Current foreign policy issues bring into focus challenges for US policymakers who are mindful of Americans' waning appetite for overseas military engagements More

SADC Meeting Lesotho Officials to Resolve Stalemate

Official says regional bloc has been engaged with leaders in Lesotho to resolve political disagreement that led to coup attempt 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.
West Africa Ebola Vaccine Trials Possible by Early 2015i
X
Carol Pearson
August 30, 2014 7:14 PM
A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered at the Union League Club in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Cost to Raise Child in US Continues to Rise

The cost of raising a child in the United States continues to rise. In its latest annual report, the U.S. Department of Agriculture says middle income families with a child born in 2013 can expect to spend more than $240,000 before that child turns 18. And sending that child to college more than doubles that amount. VOA’s Deborah Block visited with a couple with one child in Alexandria, Virginia, to learn if the report reflects their lifestyle.
Video

Video Chaotic Afghan Vote Recount Threatens Nation’s Future

Afghanistan’s troubled presidential election continues to be rocked by turmoil as an audit of the ballots drags on. The U.N. says the recount will not be completed before September 10. Observers say repeated disputes and delays are threatening the orderly transfer of power and could have dangerous consequences. VOA correspondent Meredith Buel reports.
Video

Video Ukraine Battles Pro-Russia Rebel Assault

After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Growing Business Offers Paint with a Twist of Wine

Two New Orleans area women started a small business seven years ago with one thing in mind: to help their neighbors relieve the stress of coping with a hurricane's aftermath. Today their business, which pairs painting and a little bit of wine, has become one of the fastest growing franchises across the U.S. VOA’s June Soh met the entrepreneurs at their newest franchise location in the Washington suburbs.
Video

Video Ebola Vaccine Trials To Begin Next Week

The National Institutes of Health says it is launching early stage trials of a vaccine to prevent the Ebola virus, which has infected or killed thousands of people across West Africa. The World Health Organization says Ebola could infect more than 20,000 people across the region by the time the outbreak is over. The epidemic has health experts and governments scrambling to prevent more people from becoming infected. Zlatica Hoke has more.
Video

Video Asian Bacteria Threatens Florida Orange Trees

Florida's citrus fruit industry is facing a serious threat from a bacteria carried by the Asian insect called psyllid. The widespread infestation again highlights the danger of transferring non-native species to American soil. VOA’s George Putic reports.
Video

Video Aging Will Reduce Economic Growth Worldwide in Coming Decades

The world is getting older, fast. And as more people retire each year, fewer working-age people will be there to replace them. Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world. But experts say it’s not too late to mitigate the economic impact of the world’s aging populations. Mil Arcega has more.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.