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.
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

Video Russia’s Syrian Escalation Tests Obama’s Crisis Response

Critics once again question whether president has been slow to act on Syrian conflict, thus creating opening for powers like Russia More

Ancient African DNA Shows Mass Migration Back Into Africa

First genetic analysis of ancient human remains in Africa suggests massive migration from north around time of Egyptian empire More

NASA: Pluto Has Blue Sky

New photos also reveal the presence of water ice More

This forum has been closed.
Comment Sorting
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.
Hungary Criticized for Handling of Refugeesi
Henry Ridgwell
October 08, 2015 8:02 PM
Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Hungary Criticized for Handling of Refugees

Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Iraqi-Kurdish Teachers Vow to Continue Protest

Sixteen people were injured when police used tear gas and rubber bullets to disperse teachers and other public employees who took to the streets in Iraq’s Kurdish north, demanding their salaries from the Kurdish Regional Government (KRG). VOA’s Dilshad Anwar, in Sulaimaniya, caught up with protesting teachers who say they have not been paid for three months. Parke Brewer narrates his report.

Video Syrian Village Community Faces Double Displacement in Lebanon

Driven by war from their village in southwestern Syria, a group of families found shelter in Lebanon, resettling en masse in a half-built university to form one of the biggest settlements of its kind in Lebanon. Three years later, however, they now face being kicked out and dispersed in a country where finding shelter as a refugee can be especially tough. John Owens has more for VOA from the city of Saida, also known as Sidon.

Video Bat Colony: Unusual Tourist Attraction in Texas

The action hero Batman might be everyone’s favorite but real bats hardly get that kind of adoration. Put more than a million of these creatures of the night together and it only evokes images of horror. Sarah Zaman visited the largest urban bat colony in North America to see just how well bat and human get along with each other.

Video Device Shows Promise of Stopping Motion Sickness

It’s a sickening feeling — the dizziness, nausea and vomiting that comes with motion sickness. But a device now being developed could stop motion sickness by suppressing certain signals in the brain. VOA’s Deborah Block reports.

Video Making a Mint

While apples, corn, and cranberries top the list of fall produce in the US, it’s also the time to harvest gum, candy, and toothpaste—or at least the oil that makes them minty fresh. Erika Celeste reports from South Bend, Indiana on the mint harvest.

Video Activists Decry Lagos Slum Demolition

Acting on a court order, authorities in Nigeria demolished a slum last month in the commercial capital, Lagos. But human rights activists say the order was illegal, and the community was razed to make way for a government housing project. Chris Stein has more from Lagos.

Video TPP Agreed, But Faces Stiff Opposition

President Barack Obama promoted the Trans-Pacific Partnership on Tuesday, one day after 12 Pacific Rim nations reached the free trade deal in Atlanta. The controversial pact that would involve about 40 percent of global trade still needs approval by lawmakers in respective countries. Zlatica Hoke reports Obama is facing strong opposition to the deal, including from members of his own party.

Video Ukranian Artist Portrays Putin in an Unusual Way

As Russian President Vladimir Putin was addressing the United Nations in New York last month, he was also being featured in an art exhibition in Washington. It’s not a flattering exhibit. It’s done by a Ukrainian artist in a unique medium. And its creator says it’s not only a work of art - it’s a political statement. VOA’s Tetiana Kharchenko has more.

Video Nano-tech Filter Cleans Dirty Water

Access to clean water is a problem for hundreds of millions of people around the world. Now, a scientist and chemical engineer in Tanzania (in East Africa) is working to change that by creating an innovative water filter that makes dirty water safe. VOA’s Deborah Block has the story.

Video Demand Rising for Organic Produce in Cambodia

In Cambodia, where rice has long been the main cash crop, farmers are being encouraged to turn to vegetables to satisfy the growing demand for locally produced organic farm products. Daniel de Carteret has more from Phnom Penh.

Video Botanists Grow Furniture, with Pruning Shears

For something a bit out of the ordinary to furnish your home, why not consider wooden chairs, crafted by nature, with a little help from some British botanists with an eye for design. VOA’s Jessica Berman reports.

VOA Blogs

World Currencies


Rates may not be current.