Motor Sich and Russian influence

Why Russia is interested in the transition of “Motor Sichi” under Chinese leadership

The decision of the National Security and Defense Council of Ukraine to return the Motor Sich enterprise to state ownership provoked a stormy reaction among experts and became 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 interest in such enterprises is due to the shortage of its own high technology in the aviation industry. Therefore, “Motor Sich” is a kind of way to legalize the copying of other people’s technologies, which should strengthen the defense-industrial complex of China. However, it is more interesting that Russia became another state that actively reacted to the nationalization of Motor Sich. The media of this country launched a large-scale campaign to discredit the decision of the Ukrainian leadership to return the company to state ownership. RBC, Izvestia, TASS and a number of other publications “predicted” the collapse of the Ukrainian economy, an international scandal, a loss of creditor confidence and an outflow of foreign investment. Various accusations have been leveled at our country: from an “insolvent” state to an unreliable partner. Here, for example, Izvestia of March 25 this year: “… the nationalization of Motor Sichi after the imposition of sanctions on Chinese investors will lead to a catastrophe in Ukraine’s economy… Kyiv has shown the world that it is impossible to invest in Ukraine…”. China’s interests were also supported by the pro-Russian political force OPZZH, which stated that the implementation of the decision of the National Security and Defense Council of Ukraine on Motor Sich would lead to an outflow of foreign investment from Ukraine.

If we delve a little deeper into the study of the issue, it becomes obvious: the reasons for this are not only that Russia pursues an aggressive hostile policy towards Ukraine. And not even that Moscow seeks to oust Kyiv from the arms markets and the sale of high-tech products.

At the heart of such an anti-Ukrainian campaign is Russia’s inability to replace high-tech Ukrainian products that Ukraine supplied to Russia until 2014 with its own. Despite Moscow’s claims that Russian companies have reached the level of full-cycle production and have the opportunity to assemble similar engines at their facilities (JSC ODK “Klimov”), the facts show the opposite. For example, Russian developments for the manufacture of D-18T engines for the An-124 “Ruslan” have not yet been completed. The same situation with parts for TV3-117 engines.

To solve this problem, Russian experts (both from the local airlines and from the secret services) considered various options: from smuggled supplies to the creation of gasket companies in other countries. The most optimal solution was considered to be the integration of pro-Russian elites into Ukrainian government circles, which should solve this and many other problems. However, in the conditions of the undeclared war with Ukraine, such a scenario turned out to be impossible.

The appearance of China among potential buyers of the enterprise was not a surprise and did not depend on the Russian secret services, but it turned out to be a kind of gift for Russia. In the context of geopolitical confrontation 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 of Understanding between the Government of the People’s Republic of China and the Government of the Russian Federation on cooperation in the establishment of the International Scientific Lunar Station. And Motor Sich probably also had to play a significant role in this project.

However, the Kremlin was not only interested in joint projects with China. Russian experts hoped to solve the problem of failed import substitution. A study by 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, at the expense of domestic production. According to experts, in some cases it is not about replacement, but about re-export of products. It is very likely that an agreement was also reached with China to supply Motor Sich products to Russian companies after the company became the property of Chinese shareholders. That is why the Russian Federation is now trying hard to show in the eyes of foreign partners the nationalization of the company as illegal, and the Ukrainian leadership – as unreliable. According to the plan of the Russian special services,

The topic of nationalization of Motor Sichi under strong pressure from the USA is gaining special publicity in the (pro) Russian media. And this allegedly does not correspond to the interests of Ukraine and the Ukrainian people.

It is no secret that the United States views China as one of its main geopolitical rivals and adversaries. And, of course, the Americans are not interested in strengthening China’s defense capabilities, which to some extent can be considered a threat to US national interests. In other words, the thesis that the decision of the Ukrainian leadership 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. With this decision, the Ukrainian leadership 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, a key factor in Kyiv’s decision was Ukraine’s national interests, which at this stage coincided with the geopolitical interests of the United States.

The myth of Ukraine’s (and Motor Sich’s inability) to fulfill its international obligations, which is spread by the Russian media, is mirrored. A sober assessment of the situation of these processes raises a natural question: who 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 a full cycle of unique products? The answer is obvious. It is the Russian defense industry that will not be able to fulfill the orders of both its Ministry of Defense and international contracts in the aviation industry without Ukrainian products.

It cannot be said that everything is perfect at Ukroboronprom, including Motor Sich. There are problems. But these problems are not critical for production and the implementation of international contracts. Because they do not significantly 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. 

(c)Tyzhden

3 comments

  • Ukraine killed two birds with one stone here. What I do find amusing about this whole saga, is that China would pay billions for Motor Sich, and Russia would expect China to share anything with them. China don’t need Russia for anything, no matter how much they hold on to China’s coattails.

    Liked by 4 people

    • Putin wants Europe and XI wants the US, it’s like the Siberian version of Molotov-Ribbentrop. They both spend most of their time stealing instead of studying. I have never understood that. They say necessity is the mother of all inventions but in their case necessity is the mother of all theft.

      Liked by 3 people

      • The interesting part will come when Xi turns his attention to Siberia. Russia could hardly blame the West if China bit off a huge chunk of real estate in the far East.

        Liked by 4 people

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