The Strategic Importance of Ukraine

Ukraine, one-time Soviet nation and now Russian adversary, has a complicated history that most in the West have little understanding of.

While it is was once primarily known as a major agricultural region, it also has leverage in other, more surprising sectors–that is, defense.

In southern Ukraine, along the Dnieper River, is the city of Zaporizhzhya, which is home to more than 800,000 people. The city is a heavy-industrial center for Ukraine, with manufacturing spanning steel, aluminum, autos, transformers/substations, and oddly, Aircraft Engines.

Zaporizhzhya hosts the headquarters of Motor Sich, a company designated by the Ukrainian government as a “strategic enterprise”.

A remnant of the Soviet-era occupation of Ukraine, Motor Sich is a manufacturer of engines and components for aircraft and drilling equipment. Motor Sich engines power an estimated 80% of Russian-built helicopters, including:

Mil Mi-2
Mil Mi-8/17 and variants
Mil Mi-24 (in the Hind F configuration)

There are many others, but these are the critical ones. The Mil Mi-2 “Hoplite” is a small close-air support/multirole helicopter. It carries troops, can be armed with rockets and machine guns, or fitted with reconnaissance equipment.

Fifteen countries (including the US), have active inventory of one or more variants. The Mil Mi-8/17 “Hip” is one of the most-produced helicopters in the world, with more than fifty countries holding some version or other in active inventory.

Like its little brother, the Mi-2, it can be configured in any way, with more than 20 different variants. The Mil Mi-24 “Hind” is a legendary gunship that can also carry a small complement of troops.

It has been used in more than 30 conflicts going back to 1977.

While the original powerplants were Russian-made, a newer variant , the Mi-24P “Hind F”, uses Motor Sich engines. Motor Sich powerplants were also used on the famous Antonov An-225, the largest airplane ever built, which was originally built to transport the Soviet Buran space shuttle.

More recently, China has come up with an even bigger plan for the mega-plane: Launching satellites.

Due to sanctions related to the ongoing Russia-Ukraine conflict going back to the 2014 Russian invasion of Crimea, Motor Sich can no longer provide sustainment for the Russian military’s massive fleet of helicopters.

However, Motor Sich has basically ignored that.

From 2014-2017, the Russian-born president of Motor Sich allegedly continued to sell components to Russia via Belarus, using a sanction-dodging technicality.

In April 2018, investigatory agents from the Ukrainian State Security Service (SBU) raided Motor Sich. In the background, however, was China.

For years, China had quietly increased its ties to Ukraine. Where Ukraine had been dependent on Russian buyers pre-2014, it struggled thereafter.

Motor Sich, especially, needed cash and new markets. China offered both.
Through a synthetic web of offshore companies, China managed to acquire a significant stake in Motor Sich between 2013-2016, rumored to be as much as 56%.

A separate SBU investigation revealed that a single man, Wang Jing, controlled all of these shell companies. In 2017, one of Jing’s companies, Beijing Skyrizon, stepped forward with a bid to take control of Motor Sich.

The ongoing investigation and sudden Ukrainian public awareness of control of a “strategic enterprise” by China sparked backlash. The deal has been iced for the time being.

Jing is an unknown player in the West, except for one project: He was the founder and public face of the effort to bypass the Panama Canal and build a larger canal joining the Pacific and Atlantic Oceans through Nicaragua. The project has since been mothballed.

Relative to China’s missile program, the People’s Liberation Army (PLA) derives an enormous amount of “black box” funding through its network of shell companies. Aerospace and telecom are two such industries where the PLA is rumored to be highly active in ownership of commercial enterprises.

Wang Jing, especially, is considered by outside observers to be a direct proxy for the interests of the Chinese Communist Party and PLA.

Further, it directly benefits the CCP and PLA to have a larger canal that cuts off North America from South America, and allows for passage of much larger commercial and military naval vessels.

As with Motor Sich, Jing seems to be acting as a proxy.
The Motor Sich deal, and the known players, fits a Chinese operational pattern of years-long gamesmanship and multi-layered strategic planning servicing many needs at once.

Having established Jing as a proxy for CCP/PLA efforts, focus on his main holding company, Xinwei Technology Group.

While it is involved in a great many activities, let’s zero in on a specific sector:

Satellites- In 2016, Xinwei began a $285m purchase of Spacecom, an Israeli satellite manufacturer. The deal was contingent on the successful launch of Spacecom’s Amos-6 satellite.

On 1 September 2016, Amos-6 was the payload on Elon Musk’s SpaceX Falcon 9 launch vehicle.

Then the Amos-6 (whose primary user was to be Facebook), went up in flames, as did Spacecom’s deal with Xinwei.

Jing pulled his firm from the deal, and was back to square one on his efforts to acquire better satellite R&D and manufacturing capacity.

In Feb 2018, CASC disclosed that it was planning to deploy a massive global network of LEO satellites, codenamed “Hongyan” (translated, “wild goose”).

And at the heart of it, Xinwei’s satellite tech.

With more than 300 satellites deploying by 2025, the Hongyan constellation is China’s attempt to completely break free from the traditional fiber optic cable model that powers the global telecom industry. China understands that Cable is vulnerable to breakage or sabotage, and they demand a better and more secure network.

Hongyan will connect directly to China’s 5G network.

In a nutshell, China wants to dominate telecom infrastructure of the 21st century. The Communist Party intends to control 90% of the most advanced industries in the world, including robotics, biotechnology & artificial intelligence. In order to be able to dominate the economy of the 21st century, Beijing has urged its officials & companies to obtain US intellectual property. 5g is fought for the world’s economy. By 2024, around 40 percent of the world’s population — and 22 billion devices, from cars to refrigerators to cellphones to traffic lights, will be on the 5G network.

Now, back to Ukraine.

Why is Jing and his Xinwei subsidiary Beijing Skyrizon tied so closely to the acquisition of a troubled, sanction-riddled company like Motor Sich?

First, the massive sustainment requirements for the global fleet of helicopters using Motor Sich engines (including China and Russia) is a durable base of revenue and R&D. Ukraine is a key node in Belt and Road (see Mirror http://www.capecharlesmirror.com/news/the-threat-of-chinas-new-silk-road/).

Ukraine also supplies a great deal of grain to China.
Most importantly, is the Antonov An-225.

All of the intellectual property relating to its unique engines belongs to Motor Sich. In 2016, China inked a deal for Antonov to complete the second unit. As of 2019, it is 70% done. The Antonov An-225 was designed to airlift the Energiarocket‘s boosters and the Buran orbiter for the Soviet space program. The An-225’s original mission and objectives are almost identical to that of the United States’ Shuttle Carrier Aircraft.