Chinese President Hu Jintao (right) in Ukraine on a June 18-20 visit, when he held talks with President Viktor Yanukovych.
© (Courtesy of www.president.gov.ua)
China has preliminarily agreed to lend more than $7 billion to Ukraine. In addition, an agreement has been signed between the two countries’ central banks on a currency swap worth $2.4 billion. Although it is likely to take months of talks to agree on the details of the projects to be financed by China, this can be roughly compared in scale to the volume of loans that Ukraine received from international financial institutions in 2008-2010, which helped the country survive the crisis.
Beijing will benefit from further internationalizing its currency and increasing exports to Ukraine. Kyiv, on the other hand, expects to be able to save its reserves, which have been shrinking as the International Monetary Fund (IMF) froze assistance last year, improve its balance of payments, as well as receive additional leverage in its ongoing gas dispute with Russia since some of the projects Ukraine has discussed with China are aimed to cut gas imports.