Ukraine's stalling economy desperately needs investors. There are a lot of them in China, home to the world's second largest economy.
But Ukraine is not doing enough to woo China.
That was one of the messages of the Kyiv Post-organized “Doing Business With China Conference.” The event took place on Feb. 25 at the Hilton Kyiv, attracting more than 200 members of Ukraine’s business and diplomatic communities. Sponsors of the event were Dentons, Ukr-China Communication, DHL, Corum Group and Kuehne and Nagel.
The conference’s two panels focused on understanding the relationship between the two countries, how to enter and compete in the Chinese market and how to attract investment into Ukraine.
“Investments in Ukraine have been very poor in the past year,” Ukraine’s Economy Minister Aivaras Abromavicius said. “We are still very committed to improving the investment climate. Ukraine’s rank in the Doing Business rating is 96th in the world… We want to be in the top 50 in the next two years.”
One way to do this is through a tax and customs investigation committee that Abromavicius will lead. One problem cited: Out of the top 100 state-owned companies, only 20 went through an international audit, the minister said.
Moreover, Ukraine needs fewer regulations on business as the only thing they do is promote corruption.
“The good thing about the IMF agreement is that every ministry had to write very specific rigid reforms they would do and when they would do it,” Abromavicius added.
Ihor Didenko, Ukraine’s deputy energy minister, pointed to Ukraine’s cooperation with China in the energy sector. The China Development Bank and Ukraine’s Naftogaz signed a $3.6 billion credit line contract which will include financing the Ukraine-Poland gas interconnector and various coal projects.
“Right now we are talking with our Chinese partners about the next direction, the switching from natural gas to coal,” said Didenko.
In addition to Ukraine’s energy sector, Abromavicius hopes to see more Chinese investments in the country’s metals, mining, agriculture and IT sectors.
The event included other speakers such as Ukraine’s Deputy Agrarian Minister Vladyslava Rutytska, tech giant Huawei financial director Robert Liu, partner of law firm Dentons Frank Niu and others.
Common topics throughout the panels included the need of a trustworthy local partner, product copyright protection, thorough study of the market, awareness of cultural differences and Ukraine’s need to upgrade the business standards.
Vyacheslav Lysenko, president of Ukr-China Communication, a Kyiv-based company, pointed to some of the cultural tensions, where Ukrainians want very quick revenue results whereas Chinese businesspeople do not like to rush.
As for Chinese doing business in Ukraine the situation is also difficult. “It is really hard and challenging for foreign companies to understand the local demands…It is really hard to make any decision over here,” said Huawei’s Liu.
Kyiv Post staff writer Ilya Timtchenko can be reached at [email protected].
