The Antimonopoly Committee of Ukraine is considering the purchase of a 56% of shares of the Zaporozhye-based public joint stock company Motor Sich by two Chinese companies, namely Skyrizon and Xinwei Group. If the deal is approved, this aircraft engine factory of strategic value will become more Chinese than Ukrainian.
Reportedly, the Chinese companies have undertaken a number of social and production obligations, including investments in the development of new engines and their modernization, preservation of jobs, indexation of wages and securing manufacturing orders for the factory. Given that Russia has been the traditional sales market for Motor Sich, incomes have fallen by a factor of more than six since 2014. That is why the management of the factory has decided to shorten the working week.
According to analysts, the sale of shares will give Motor Sich a chance to enter the Chinese market, maintaining manufacturing in Ukraine.
Incidentally, about one in five members of the American Chamber of Commerce in Shanghai say they have been pressured to transfer technology, according to a survey. Of those companies, 44% in aerospace report "notable pressure." China considers this industry strategically important.
However, China has the second largest economy in the world at $15.5 trillion in GDP, behind the United States with $21.4 trillion, and well ahead of number three Japan with $5.4 trillion. China's foreign exchange reserves (including gold) are the largest in the world at $3.8 trillion. Most importantly, at $11,000 per capita GDP, China is stuck squarely in the "middle income trap" as defined by development economists.
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