Could China, Russia’s “no-limits” friend, help rebuild Ukraine?

MANY RESIDENTS of Kyiv, the Ukrainian capital, have grown so used to air-raid warnings that they pay little heed. They prefer to think, or pray, that the common pattern will prevail: that the city’s air-defence systems will work, more or less, or that the alerts will prove merely precautionary. But for those who do take shelter, the tunnels of the underground railway network are an obvious choice. Thanks to Chinese equipment, there is some relief to be found there during what can be a long and tedious wait for the all-clear.

Less than a year before Russia mounted its invasion of Ukraine in February 2022, work was completed on kitting out the metro with a high-speed 4G mobile network. It uses hardware from Huawei, a Chinese telecoms firm of which Western countries are suspicious—several now ban the use of Huawei’s (even faster) 5G technology because of fears that it may enable China to harvest users’ secrets. As they sit on foldable stools or snooze on mats, while commuters rush by, the bomb-wary may well be using the 4G system on Chinese-branded handsets. Phones made by Xiaomi are among the most popular in Ukraine.

China, while professing to be neutral, supports Russia, such as by helping it dodge Western sanctions. But China’s business and political ties with Ukraine are not broken. Under a UN-brokered deal that allowed safe passage of ships carrying Ukrainian grain through the Black Sea, China was the biggest recipient of their cargo. Russia withdrew from the pact in July, but China remains an important buyer as traffic picks up along a new shipping corridor. When the fighting eventually halts—no matter to which side’s satisfaction—many wonder whether China’s firms might see golden opportunities as Ukraine looks for help with the task of rebuilding.

China has interests in Ukraine that stretch beyond its clear desire for the war to weaken Western alliances and leave Russia much as it is, in tune with China’s worldview. Before the invasion, both China and Ukraine hoped to reap economic benefits from their relationship. China had overtaken Russia as Ukraine’s largest single trading partner (though as a bloc, the European Union was still the biggest). Chinese firms were already doing deals for the building or financing of infrastructure (a new line for the metro is one that may eventually materialise). In 2021 Ukraine’s president, Volodymyr Zelensky, told his Chinese counterpart, Xi Jinping, that Ukraine should be China’s “bridge to Europe”. For all Mr Xi’s sympathies with Russia’s president, Vladimir Putin, that would have been music to the Chinese leader’s ears.

The EU hints at the possibility of post-war business deals for China in Ukraine as a way of swinging it more to Ukraine’s side. “We do consider it essential that China makes a major effort to convince the people of Ukraine that China is not Russia’s ally in this war,” said the EU’s foreign-policy chief, Josep Borrell, in a speech in October at Peking University. He suggested that China step up humanitarian aid and propose an initiative to protect Ukraine’s cultural heritage from destruction by Russia. Such gestures, he said, would “dramatically” improve China’s image in Ukraine and put it in a “good position to contribute” to the country’s reconstruction.

China is trying to buff up its image by presenting itself as a peacemaker. In February it issued a 12-point proposal to settle the conflict. The plan aroused little enthusiasm, especially in Ukraine and among its Western supporters, as it did not call for Russia to withdraw from Ukrainian territory. Ukraine has suggested that China act as a guarantor of a peace deal. China has been non-committal, perhaps worried about having to show its hand should Russia violate the terms. But China’s proposal did say that the country was “ready to provide assistance and play a constructive role” in post-war rebuilding. To many observers, that looked as if China was interested in mobilising its huge capacity for the rapid roll-out of high-quality infrastructure.

But will China play much of a role in what could become the biggest frenzy of construction in Europe since the one that followed the second world war? This will depend in part on how the shooting ends. In the unlikely event Russia winds up in control of Ukraine, China would have a stark choice to make: siding with Russia in such a scenario would risk a meltdown of relations between itself and the West. Assuming the government in Kyiv remains in control of most of Ukraine—and has an appetite for Chinese help—China would have to calculate how much its contribution would risk annoying Russia, whose friendship it sees as vital to its own security.

No Belt No Road

China’s involvement in Ukraine leading up to the latest invasion may offer clues to the way its thinking will work. On the face of it, Ukraine would appear an obvious target for Chinese investment. It joined the Belt and Road Initiative, China’s global infrastructure-building scheme, in 2017. And it is well placed as a potential conduit for Chinese goods destined for European markets and has resources that China wants, ranging from wheat and maize to iron ore. But observers in Kyiv see a long-standing pattern of caution in China’s business dealings. Its share of foreign direct investment in Ukraine has been “very tiny”, says Yurii Poita of the Kyiv-based New Geopolitics Research Network. A Ukrainian foreign-ministry official says that “not a single project has been done” in Ukraine under the belt-and-road banner.

It once looked very different. In 2013 Ukraine’s then pro-Russian president, Viktor Yanukovych, visited China and secured what he said were deals involving $8bn of Chinese investment in an array of projects from airlines and shipbuilding to agriculture. Those plans were thrown into disarray by a popular uprising against Mr Yanukovych that resulted in his flight to Russia in 2014 and a decisive political shift by Ukraine away from Moscow. Russia swiftly responded by seizing Crimea, in the south of the country, and instigating a separatist war in Donbas, an eastern region.

The turmoil and violence discouraged Chinese investors. But some analysts in Kyiv believe there may have been another reason for their hesitancy: that China did not want to upset Russia by forging too close a relationship with a government that Russia despised, in a country that was once part of the Soviet Union. “I think the Russians did a lot to persuade China that it’s their sphere of influence,” says Maksym Skrypchenko of the Transatlantic Dialogue Centre, a think-tank in Kyiv.

It did not encourage China that Ukraine looked to the West for security. When a private Chinese aerospace firm, Beijing Skyrizon, began attempting a takeover of Motor Sich, a Ukrainian maker of aircraft engines, America complained that Skyrizon was linked to the Chinese army. Ukraine duly blocked the sale in 2021. Skyrizon then filed a case against the government, demanding billions of dollars in compensation. In 2022 Ukraine used wartime powers to nationalise the firm. Skyrizon accused the authorities of “unjustified plundering of the legitimate rights and interests of Chinese investors”. Ukraine has not yet followed Western countries by banning the use of Chinese technology in 5G networks. But Huawei must be wondering whether that day is far off.

Public attitudes in Ukraine may not help Chinese businesses either. In 2019 opinions of China in Ukraine were among the most favourable in Europe, with 57% expressing positive views, according to the Pew Research Centre, a think-tank in Washington. The invasion in 2022 has soured the mood. Rating, a polling agency in Kyiv, reported in June that 34% of Ukrainians it surveyed saw China as hostile, compared with 12% at the end of 2021. There may be good economic reasons for seeking Chinese help with reconstruction, says Oleksandr Merezhko, chairman of the foreign-affairs committee in Ukraine’s parliament. But, he adds, the country should bear in mind the “political price and moral price” of accepting it.

Ukraine and its supporters are already planning for the reconstruction phase. They have held two conferences—in Lugano, Switzerland, in 2022 and this year in London—to discuss Ukraine’s post-war recovery. China did not take part in either. The Ukrainian foreign-ministry official says he hopes it will join subsequent meetings. “If they want to be part of this, they should start engaging with international efforts,” he says. In Beijing, however, that may seem like abandoning a beloved friend. Providing Russia with moral support is still China’s priority—not figuring out how a country that China’s state-controlled media portray as a Western puppet can win a distant-seeming peace. ■

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