Russia seeks Chinese help to build infrastructure in temporarily occupied Crimea

Andrii Muravskyi - 30 June, 09:45

Chinese and Russian flags. Stock photo: Getty Images

Russia intends to involve China in building transport infrastructure in temporarily occupied Crimea.

Source: Ukraine’s Foreign Intelligence Service

Quote: "Head of the occupying administration of Crimea Sergey Aksyonov has decided to involve Chinese business in the construction of transport infrastructure in annexed Crimea."

Details: Ukraine’s Foreign Intelligence Service reports that during a recent meeting, Aksyonov stated that preliminary agreements have already been reached regarding the Kerch seaport, which Russia actively uses for "grey" exports, as well as the infrastructure around Lake Donuzlav, currently home to a Russian naval base.

Quote: "In order to sign the final agreement, the occupying authorities of Crimea intend to invite potential Chinese builders to visit Crimea. Among them – the China State Construction Engineering Corporation (CSCEC), which is one of the largest companies in the construction of railway and road arteries."

More details: The total capital investment is estimated at US$10 billion.

Background:

Earlier reports stated that Russia is facing increasing difficulties transporting goods to China via its eastern railway network – a sign of deeper economic problems caused by the war and sanctions, despite the Kremlin’s reassurances. This year, the railway system is experiencing its steepest decline since the 2008-2009 crisis, with the trend continuing.
It was also reported that investment in Russia’s largest railway projects will be cut fivefold due to Russian Railways’ debt.
Ukraine’s National Bank previously revealed that Russia is gradually depleting its macroeconomic reserves, including the National Wealth Fund, though it still retains the potential to finance further aggression.
Russian banking officials have warned that the country’s economy is in worse shape than publicly acknowledged, and there is a real risk of a systemic banking crisis over the next year.
Oil prices are rising, but Russia is not receiving the expected revenue – the strengthening of the rouble continues to put pressure on the Kremlin’s income.
Rostec has admitted that Russia is in an unprecedentedly difficult situation due to the war against Ukraine. With no available financial resources and loan interest rates remaining high, investments in science, modernisation and manufacturing have become impossible.

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