State is obliged to protect its manufacturer: these are jobs for people, taxes, and so on. All this is obvious. However, there are exceptions to this rule.
There are international obligations such as Association Agreement with EU or WTO agreements that restrict states in their efforts to close their own markets to foreign participants. And there is certain logic in this: equalization of competitive advantages, on the one hand, pulls up its "lagging" manufacturers, and on the other hand, gives its "strong" manufacturers opportunity to play in other markets. This global "alignment" ultimately works for consumer, whoever it is - ordinary citizen, private company or government agency: consumer gets access to better goods and services. But issue of supporting its manufacturer is never removed from agenda. And to maintain a balance between supporting one's own and participating in global economic system by adhering to universal rules of the game is one of the main economic tasks of any state.
It seems that Ukraine may not be able to cope with this task. Yesterday, deputies did not support the bill on amendments to the state budget and thus - saved Ukrainian power engineering. This is an industry that, unlike aircraft construction, has more or less successfully survived all post-Soviet crises. An industry in which hundreds of thousands of Ukrainians are employed in one way or another and which brings billions to the country's budget. But it can still happen again, and if deputies do vote for this bill, today or in future, Ukrainian power engineering risks following Ukrainian aircraft industry.
So, judging by the name, it was quite a routine document, and judging by the content - even useful and declares good intentions. But where the road lined with these intentions leads, it is not visible at once.
First, the bill deals with assistance to Ukrainian small and medium-sized businesses affected by quarantine. This is, of course, important. But this part is written so vaguely and illiterately (about which scientific-expert department of Verkhovna Rada made devastating conclusion) that it looks like a disguise for the rest of the document. And here - the most interesting: in the second part it is a question of granting of state guarantees for "Ukrhydroenergo" on credits which are involved for financing of construction of the third turn of Dniester and construction of Kaniv hydro pumping storage power plants. It would seem - the case is necessary. If not one "but". Whole question is at whom "Ukrhydroenergo" is going to take loans and what it will lead to.
Back in September 2018, Chinese POWERCHINA INTERNATIONAL GROUP LIMITED showed a persistent interest in contracts of "Ukrhydroenergo". "Ukrhydroenergo", a private company that cares little about future of Ukrainian power engineering, has responded favorably to emergence of Chinese manufacturers. What caused this commitment can only be guessed at, but it is quite possible that Chinese have somehow "heated up" their interest in themselves: Ukrainian power engineering fully meets world standards, and this Ukrainian market does not need foreign manufacturers.
Realizing that choice of Chinese contractor looks not only unpatriotic, but also economically impractical, and this will raise questions among Ukrainian machine engineers, Chinese began to give promises.
At first, everything looked great: we, Chinese said, will act as general contractors, and Kharkiv's "Turboatom" and "Electrotyazhmash" will become subcontractors and will also work. Why do we need Chinese in this scheme? It's very simple: price of issue is about 10 billion hryvnias (!). "Ukrhydroenergo" does not have such sums, and Chinese banks are ready to finance reconstruction of its facilities quickly and without delay. This requires only one "little thing": guarantor of such loans should be state of Ukraine. The subtlety is that "Ukrhydroenergo" is a private company, and issuance of state guarantees for its loans should be extended through session hall of Verkhovna Rada.
Then everything became even more interesting: feeling support of "Ukrhydroenergo" and deciding that state guarantees for their loans - the issue is almost resolved, Chinese, as if not breaking promises, made small "adjustments" in agreement with Ukrainian manufacturers. It turned out that scope of work to be performed by Ukrainian manufacturers will be announced after tender and taking into account extent to which "Turboatom" and other Ukrainian manufacturers will meet requirements of Chinese bankers financing the project. These requirements are, of course, mystery, but they are unlikely to be a pleasant surprise for Ukrainian side.
In addition, the Chinese began to demand that Ukrainian manufacturers deal only with them. They also "bound themselves": Chinese have right to work only with certain Ukrainian contractors, but if they want to place orders in any country - nothing will stand in the way.
Confidence of Chinese that it was in the bag, led to the fact that they did not hesitate to discuss in presence of "Turboatom" engineers possibility of delivering of turbine runner from China by sea. That is, the fact that Ukrainian manufacturer will remain outside of the contract, it was said almost openly.
Can Chinese be accused of, to put it mildly, aggressive behavior in Ukrainian market? In general, no. They act on the basis of their own interests, including those of the state. For China, as well as for Ukraine, and for any country, a large contract for its manufacturer is thousands of jobs, budget revenues, and given importance of power engineering for the world economy - the weight of the state in international arena. Chinese understand this. This is understood in any country in the world. Do they understand this in Ukraine?
If draft law on state guarantees for "Ukrhydroenergo" loans is pushed through Verkhovna Rada, Ukraine will give Chinese opportunity to reconstruct its energy facilities with Chinese money. And not only will give opportunity, but it will act as a guarantor of this unprecedented holiday of generosity. And for Chinese it will be a real holiday, because not only manufacturers but also bankers will earn: loans are unlikely to be interest-free. Along the way, this will be a powerful shot in foot for Ukraine, as it will shake perhaps the most powerful branch of Ukrainian industry - power engineering.
I wonder what Taras Shevchenko would say about all this, watching from Dnieper cliffs on reconstruction of Kaniv hydro pumping storage power plant, which is being conducted by Chinese, and for Chinese money that Ukraine will have to return with interest? "Ukraine has reached the very edge. Worse than Pole, their children crucify it". Know nothing better to say.