Ukraine blocks Chinese takeover of jet engine manufacturer: Report

Kyiv: Ukraine will halt the takeover of an aircraft engine maker by a Chinese company, following the objection by the United States over the prospect of important military technology falling into Beijing’s hands.

According to a report in Nikkei Asia, Ukraine’s plans to return Motor Sich to Ukrainian control ending efforts by Beijing Skyrizon Aviation to take management of the company, following a yearslong battle over the manufacturer’s fate.

“The Motor Sich enterprise will be returned to the Ukrainian people,” Oleksiy Danilov, head of Ukraine’s National Security and Defense Council, said after a March 11 meeting. “It will be returned to the ownership of the Ukrainian state in a legal, constitutional way in the near future.”

The decision has angered China, which has grown increasingly important economically to Ukraine since Kyiv’s relationship with Moscow broke down following Russia’s 2014 annexation of Crimea.

As China and Russia develop closer military ties amid mounting Sino-US tensions, suspicion emerged that Moscow has a hand in Skyrizon’s pursuit of Motor Sich.

“Ukraine, being in a state of war, cannot afford to hand over the enterprise, on which the Ukrainian defence capability depends, into the wrong hands,” Danilov said in a television appearance the following day, according to local media.

Washington strongly supports Kyiv. President Joe Biden said in a statement last month that the U.S. “will stand with Ukraine against Russia’s aggressive acts.” The Defense Department on March 1 announced $125 million in military support to Ukraine, with an additional $150 million to be provided if the country makes progress on defense reforms.

On January 29, Ukrainian President Volodymyr Zelensky approved presidential decrees sanctioning Skyrizon, Chinese backed firm, and its chairman, Wang Jing.

The sanctions relating to Wang apply for three years and block his right to use and dispose of assets in Ukraine, in addition to restricting his ability to travel to or within the country.

Another decree applies similar limitations to four entities connected with Wang: Skyrizon Aircraft Holdings, Hong Kong Skyrizon Holdings, Beijing Skyrizon Aviation Industry Investment, and Beijing Xinwei Technology Group.

“The US sees China’s influence in Ukraine and the purchase of the company as a threat,” says Nan Tian, a senior researcher at the Arms and Military Expenditure Programme at Stockholm International Peace Research Institute (SIPRI).