BOFIT Viikkokatsaus / BOFIT Weekly 2022/08
China-Ukraine bilateral goods trade has grown briskly in recent years. China last year exported 9.8 billion US dollars in goods to Ukraine, while importing goods worth 9.4 billion dollars from Ukraine. China’s exports to Ukraine nearly doubled over the past four years, while imports quadrupled. Despite robust growth, Ukraine-China trade represents only about 0.3 % of China’s foreign trade. China, in contrast, accounts for about 15 % of Ukraine’s foreign trade.
Chinese exports to Ukraine are dominated by electronic goods such as mobile phones, computers and other machinery & equipment. The bulk of Ukraine’s consumer goods imports such as clothing, footwear and bicycles come from China. China is also a big provider of medicines (e.g. antibiotics). China mainly imports commodities from Ukraine such as iron ore, agricultural products and basic metal products. Grains (mainly maize, barley and wheat) accounted for half of China’s agricultural product imports from Ukraine in 2020. The only important high-tech product that China imports from Ukraine is jet turbine engines. China buys nearly half of Ukraine’s iron ore production, barley, jet turbine engines and vegetable oils.
In 2018, China opened a Belt and Road Initiative trade and investment centre in Kyiv that was the harbinger of increased Chinese corporate investment, especially in Ukrainian ports. For example, China’s giant state-owned food processor, the COFCO Group, invested $50 million in the Port of Mariupol to triple its ship loading capacity. China has also established a direct rail connection with Ukraine. Since July 2020, a weekly container train has been running between Wuhan and Kyiv. A second regular container train connection between Guangdong and the Pivdennyi seaport near Odessa was inaugurated in June 2021. It can take roughly 20 days for a container train to make the 9,000 km journey with a standard load (45–50 containers). China’s overall foreign direct investment in Ukraine is still relatively small, however. In total, China and Hong Kong have invested just over $100 million in Ukraine, or about 0.3 % of Ukraine’s total FDI stock. Ukraine’s corporations registry shows that Chinese own fewer than 500 firms in Ukraine, and of those, just 40 have annual earnings exceeding $1 million.
China’s imports from Ukraine have quadrupled in just four years
Sources: UNCTAD and BOFIT.