Offer they can’t refuse: US wants to block China from buying Ukraine aircraft engine factory

The prospect of a Ukrainian engine factory selling out to China has so alarmed Washington that none other than national security adviser John Bolton is seeking to stop it. The US didn’t bother making a counter-offer, either.

Bolton is headed to Kiev after the G7 summit in France, and said on Monday he was looking forward to meetings with “partners” there, to support the government’s vision for a “stronger and more prosperous Ukraine.” 

He did not comment, however, on the Wall Street Journal story from Friday that one of those meetings will involve the fate of Motor Sich, which is seeking approval from a Kiev watchdog to sell the controlling stake to two Chinese companies. This has raised alarms in Washington, where hawks worry that Beijing will acquire more than just the plant in Zaporozhye, but the technology and expertise to build helicopter and airplane engines.

Beijing Skyrizon Aviation Industry Investment had already tried to buy almost 49 percent of Motor Sich shares in 2017, but was blocked by the Ukrainian security services. Trade in Motor Sich stocks was frozen in April 2018, to prevent them from falling into unapproved hands.

Now Skyrizon has partnered with Xinwei Group to make another bid, this time for more 51 percent of the company’s shares, while a 25 percent stake would go to Ukroboronprom, the state military conglomerate. The purchase must be approved by the Antimonopoly Committee – which is where Bolton comes in.

Ukraine’s only aircraft engine plant, founded in 1907, has fallen on hard times since the 2014 coup in Kiev resulted in a trade war with Russia, formerly its biggest customer. Motor Sich is not the only defense giant to suffer, either. Antonov, for whose transport planes Motor Sich made engines, shuttered its doors in 2016 and folded into Ukroboronprom, after a deal to get Chinese funding for finishing the mammoth An-225 fell through.

Last August, after pressure from Washington stopped Motor Sich from working with the Chinese, one politician argued that it would only be fair for the US to step in as a customer.

“If the Americans do not want us to sell to the Chinese, let them them buy our aircraft engines,” said Oleh Lyashko. The controversial nationalist’s party had 22 seats in the Rada at the time, but failed to clear the threshold in last month’s parliamentary election, losing all of them.

Ukraine’s new president Volodymyr Zelensky, who won a landslide victory over the US-backed Petro Poroshenko in April, has since been presented with numerous “red lines” from Western NGOs and turned his priorities to NATO membership. It remains to be seen if he will respond to pressure from Washington like his predecessor, at least where the fate of Motor Sich is concerned.

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