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US seeks to block investment deal between China, Ukrainian aerospace company

Ukrainian aerospace giant Motor Sich showcases its latest aerospace tech at an exhibition on October 11. 2018. (File photo)

US National Security advisor John Bolton is reportedly seeking to block a China's investment in a Ukrainian aerospace company, in an apparent attempt at countering Beijing’s growing military capabilities.

Citing senior US administration officials, The Wall Street Journal said Friday that Bolton was seeking to scuttle the pending acquisition the Motor Sich —  one of the world’s largest manufacturers of helicopter and aircraft engines -- by a Chinese aviation firm.

Bolton is concerned that the deal will give Beijing vital defense technology, according to the officials.

Staffers at the National Security Council and the US Embassy in Kiev are working to schedule a meeting between Bolton and the aerospace firm’s chief executive next week in the Ukrainian capital, where Bolton plans to attend a security conference, a senior administration official told the Journal.

“We are going to have a conversation with the Ukrainians about China’s ambitions and what our view is of what China’s up to,” said another senior administration official.

“This is all part of the national-security strategy and the national-defense strategy. It’s a strategic competition with China,” the official added.

Chinese aviation investment firm Skyrizon has attempted to purchase a controlling stake in the Ukrainian manufacturer, which has already built a Motor Sich factory in the southwest Chinese city of Chongqing.

The Ukrainian firm says the factory currently sits inactive in the Chinese city.

Yuriy Brovchenko, Ukraine's Deputy Minister of Economic Development and Trade, said that the Chinese investors will have a certain stake, at the company but he did not confirm the number of shares purchased by the Chinese firm.

He said that Ukraine will continue to work with China and the Chinese partners will have an important role in taking the company forward, “namely, in the development of aircraft construction and the production of helicopters.”

The prospects of such a deal, has sparked concern among Ukraine’s Western allies, specifically Washington, which accuses China of trying to “take over” the firm.

Senior Pentagon officials, who paid a visit to Kiev last summer, described the deal as “a double-edged sword with financial benefits often offset by potentially calamitous results for Ukrainian industries.”

They said China may reverse-engineer and reproduce Ukrainian hardware on a large-scale and proceed to strengthening its military and pushing Ukraine from the market.

Japan has also expressed serious concerns over Chinese interest in Ukrainian aerospace technology.

Ukrainian government advisor from Japan International Cooperation Agency Masaru Tanaka dubbed the investment as a” takeover” of Motor Sich, which “must be stopped.”’

“Chinese entities are acquiring and buying sensitive technology from Ukraine that threatens Japan …We must stop the deal… the G7 must stop the deal,” advisor and bank expert Tanaka told Ukraine’s newspaper The Kyiv Post.

China’s emergence as one of the world's economic and military powers over the recent years has alarmed the US and prompted it to strive for economic, technological and military superiority.

The US is also trying to remain the dominant military power in the Indo-Pacific region.

A report published earlier this month by American think tank Averting Crisis, however, said that the US military authority is waning in the region.

It said that the US military strategy in the Indo-Pacific region is in “the throes of an unprecedented crisis.”

It has already engaged in a trade war with China, which according to a senior Republican hawk Marco Rubio, may never come to an end.


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