China may be the largest trading partner of both Ukraine and Russia, but that doesn’t mean it hasn’t faced any blowback from the flight. Commerce Minister Wang Wentao said Tuesday that China is hoping to “promote our normal trade”
Commerce Minister Wang Wentao said on Tuesday that China was hoping to “promote our normal trade” with both Moscow and Ukraine while Beijing continues to walk a diplomatic tightrope of trying to satisfy both governments.
One small business owner says his business in Russia and Ukraine has taken a major hit as Russian customers “no longer want to pay”.
“My Ukrainian and Russian business has been directly impacted,” said Bob Yao, co-founder of a digital printing production company in Guangdong province.
“We lost contact with my Ukraine client. And another Russian customer sounded no desire to pay and let us deliver goods all at once because the rouble has been devalued.”
Yao added that the impact of Russia’s invasion has already spread to customers in other regions. “A customer in Central Asia informed us on Tuesday that he has decided to postpone payment and shipping plans for six containers, because of concerns over world affairs,” he added.
China does a lot of business with bot Russia and Ukraine, importing wheat from the latter and buying energy from the former. Experts have warned that the price spike in international oil prices serves as a wake-up call for China’s energy security. China’s state broadcaster also said that export orders from Ukraine have declined substantially since December. And unfolding financial sanctions against Russia are fueling worries about the risks to Chinese traders.
Both Russia and Ukraine are participants in the Belt and Road Initiative, China’s plan to expand its importance in global trade. Notably, Beijing and Kyiv deepened their cooperation in the initiative by agreeing in December 2020 to work together on projects related to trade, transport, infrastructure, industrial investments and agriculture.
In a statement made by the Commerce Ministry, Beijing reiterated the importance of Ukraine to its European trade, and called for a specific bilateral trade deal to be ratified.
“China and Europe are two independent forces in the world, with broad strategic consensus and common interests … We believe that China-EU cooperation is greater than competition,” Wang said, while also calling for the China-EU bilateral investment deal to be ratified and brought into force.
As for the deal, the EU will try and de-fuse the growing trade tensions with China by holding an economic summit in April to try and help smooth over any concerns Beijing might have. The summit couldn’t come at a better time for China-Ukraine’s bilateral relationship: EU trade chief Valdis Dombrovskis pointed to the worsening drop in FDI coming out of Europe and into China that has beeen worsening.