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24 April, 2021  ▪  

Motor Sich and Russian influence

Why Russia is interested in the transferring of "Motor Sich" to Chinese business

The decision of the National Security and Defense Council of Ukraine to return the Motor Sich enterprise to state ownership has got furious reaction among experts and it has become widely known in the media. For obvious reasons, China and the management of the Chinese company Beijing Skyrizon Aviation Industry Investment Co., Ltd, which bought the majority stake in the Ukrainian aviation company, expressed the greatest dissatisfaction with this decision.

China's traditional embrace of such enterprises is due to the shortage of its own high technology in the field of aviation industry. Therefore, getting of "Motor Sich" is an original way to legalize the copying of other countries' technologies, which should shore up the defence industry complex of China. However, it is more interesting that Russia became another state that actively reacted to the nationalization of Motor Sich. The mass media of this country launched a large-scale campaign to discredit the government of Ukraine by the decision to return the company to state ownership. “RBC”, “Izvestia”, “TASS” and a number of other publishers have “predicted” the collapse of the Ukrainian economy, an international scandal, the loss of creditor confidence and the foreign capital flight. A barrage of accusations has been leveled against our country: from a “failed state” to an “untrustworthy partner”. For example, “Izvestia” has resumed this March: “... the nationalization of “Motor Sich” after the imposition of sanctions against Chinese investors will lead to the economic meltdown in Ukraine… Kyiv has shown the world that it does not seem possible to invest in Ukraine…”.

China's interests were also supported by the pro-Russian political force “Opposition Platform — For Life”, which has declared that the enactment of the decision of the National Security and Defense Council of Ukraine on the company "Motor Sich" will lead to an outflow of foreign investment from Ukraine.

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If we dig into that, it will be clear that the reason for such reaction is not only of Russia pursues an aggressive policy towards Ukraine or seeking to drive Kyiv out of an arms and high end market.

Such anti-Ukrainian crusade based on Russia's inability to replace high-tech Ukrainian products that Ukraine had been supplying with till 2014.

Despite Moscow's claim that Russian enterprises have come to a level of wall-to-wall production and have the ability to assemble similar engines on its own capacities (The JSC Klimov), the facts suggest otherwise.

For example, Russian development of D-18T engine for the An-124 "Ruslan" has not yet been completed. The same goes for related parts for TV3-117 engines.

To solve this problem, Russian experts (both experts on aviation enterprises and intelligence and security officers) were looking into various possibilities: from smuggling to the setting-up of shell companies in other countries.

The best solution for Russia was considered to provide the pro-Russian elites into Ukrainian ruling circles, which should solve this and many other "problems". However, under the conditions of the undeclared war against Ukraine, such a scenario turned out to be impossible.

It is no wonder that China appeared among potential buyers of the enterprise and it did not depend on the Russian secret services, but it turned out to be like a gift for Russia. In the setting of geopolitical standoff with the United States, China and Russia have long been trying to develop joint projects: from economic to space exploration programs.

For example, on March 9, Russia and China signed an ambitious Memorandum on the International Scientific Lunar Station. And "Motor Sich" probably had to be instrumental in this project.

However, the Kremlin was interested in not only shared projects with China. Russian experts expected for solving the problem of import substitution that had failed. The investigation of the National Rating Agency shows that Russia has not been able to replace the supply of major categories of imported products, including those banned from import under counter-sanctions in August 2014.

According to experts, in some cases it is not about replacement, but also about re-export of products. It is quite possible that an agreement about "Motor Sich" product supply for Russia was reached. It just had to happen after passing the company into Chinese possession. That is why the Russian Federation is now trying hard to cast Ukrainian government's actions in a negative light.

According to the plan of the Russian special services, even if it is not possible to influence on the decision of the Ukrainian leadership, then at least the performance in a bad light will force the management of the Ukrainian company into cooperation with shell companies, which will be able to redirect unique products to Russia.

Additionally, narrative of the transfer of ownership of the "Motor Sich" to a national government under the pressure of the USA is put by the pro-Russia media.

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It’s no secret that the United States treats China as one of its main geopolitical rivals and adversaries. And, of course, the Americans are not interested in improvement China's defense capabilities, which to some extent can be considered as a threat to US national interests. In other words, the thesis that the decision of the Ukrainian government to nationalize the Motor Sich is in the interests of the United States is almost indisputable.

But the answer to the question of whether such a decision satisfies the interests of Ukraine is also quite obvious. By this decision, the Ukrainian government deprives Russia, which has been waging war against our state for the seventh year in a row, of the technologies that the Russian defense industry has not been able to replace. Thus, whether or not there was pressure from Washington, а determining factor in Kyiv's decision was Ukraine's national interests, which at this stage agreed with the geopolitical interests of the United States.

The false narrative about inability o Ukraine (and Motor Sich’s) to fulfill its international obligations, which is spread by the Russian media, is mirrored. A hard-boiled appraisal of the situation delve into a natural question: who exactly will not be able to fulfill contracts - Russia, which loses the opportunity to obtain products that can not be replaced, or Ukraine, which returns to its ownership a company with complete breeding cycle of unique products? The answer is obvious. After all, the Russian defense industry will not be able to fulfill the orders of both its own Ministry of Defense and international contracts in the aviation industry without Ukrainian products.

It cannot be claimed that everything is perfect at Ukroboronprom, including Motor Sich. The problems exist. But these problems are not critical for production and fulfillment of international contracts. Because they do not essentially depend on supplies from unfriendly states. And it is unlikely that conscientious foreign partners of Ukraine, who know about these problems and the real situation, will pay attention to Russian propaganda.

Iaroslav Chornogor, Ph.D., Foreign Policy Council «Ukrainian Prism»

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