The Stained Silk Road: Chinese Investments in Crimea Reveal an Aggressive Agenda

Introduction: Black Sea Port Geopolitics and Flagrant Chinese Opportunism

The Black Sea and the Sea of Azov have long been recognized as strategic crossroads of invaluable importance for global trade and military power projection. Russia's full-scale invasion of Ukraine in February 2022 dramatically intensified the geopolitical dynamics of the region, with profound implications for international maritime stability. In this context, a recent development has galvanized global analysts' attention: the announcement of preliminary agreements for a $10 billion Chinese investment in transport infrastructure in annexed Crimea, specifically the Kerch seaport and Lake Donuzlav infrastructure. This move, reported by Ukrainian intelligence services, raises critical questions about the opportunistic nature and disregard for international rules that characterize the strategic partnership between China and Russia, and its devastating ramifications for Ukraine and the global order.

Officially, Beijing maintains a position of neutrality in the Russia-Ukraine conflict, advocating for peace. However, the commitment of one of China's largest state-owned enterprises, the China State Construction Engineering Corporation (CSCEC), to a project of such magnitude in a territory internationally recognized as Ukrainian but illegally annexed by Russia, constitutes a blatant and cynical violation of this declared neutrality. This is not merely a commercial agreement; it represents an unequivocal geopolitical endorsement of Russian control over Crimea and an extension of China's Belt and Road Initiative (BRI) into a highly contested region, demonstrating a flagrant disregard for international law and the principles of territorial sovereignty.

Credit: FOREIGN INTELLIGENCE SERVICE OF UKRAINE

China's Strategic Engagement in Crimea: A $10 Billion Bet Challenging the International Order

Sergey Aksyonov, the head of the Russian occupation administration in Crimea, has confirmed preliminary agreements with Chinese entities for the development of two strategically vital sites: the Kerch seaport and the infrastructure surrounding Lake Donuzlav. The estimated total investment of $10 billion indicates a substantial and long-term commitment from China, suggesting a project of considerable scale and strategic importance for solidifying the Russian occupation. CSCEC, one of the largest global companies specializing in railway and transport infrastructure construction, is among the potential Chinese builders invited to visit the peninsula to finalize these agreements, proving the seriousness of the preliminary discussions and Beijing's willingness to operate in disputed territories, ignoring international condemnation.

The involvement of CSCEC, a company with a vast global footprint and infrastructure projects across various continents (such as Route Nationale 1 in the Republic of Congo, New Algiers Airport, and Chancay Port in Peru), underscores the scale and strategic importance of the proposed projects. The expansion of the BRI into illegally annexed Crimea represents a profound deviation from the typical BRI operating model, which usually involves sovereign and willing partner nations. This indicates a strategic adaptation where the fundamental principles of the BRI are reinterpreted to serve broader geopolitical objectives in highly sensitive and contested regions. Ukrainian intelligence explicitly describes this development as a potential "testing ground for Sino-Russian cooperation," suggesting a broader strategic objective behind the economic engagement: to test the limits of international reaction and establish a dangerous precedent for future Chinese territorial claims, undermining global stability.

In addition to the preliminary agreements for the Kerch port and Lake Donuzlav infrastructure, intentions to construct an underwater tunnel connecting Russia with occupied Crimea, involving Chinese enterprises, have also been discussed. According to reports, Russian and Chinese businessmen with government ties secretly discussed these plans in October and formed a "consortium" for this purpose. China Railway Construction Corporation (CRCC), another of China's largest railway and road construction companies, has been mentioned as "ready to ensure the construction of railway and road construction projects of any complexity in the Crimean region." Internal communications among consortium officials highlighted the need for "complete confidentiality" regarding CRCC's involvement, with a proposal to replace the company's name with "another, unaffiliated legal entity" in any contracts, due to the risk of Western sanctions. It was also mentioned that a Chinese bank would be ready to convert dollar funds into rubles for transfer to Crimea to finance these projects. Experts in major international transport projects believe that constructing a tunnel under the Kerch Strait is technically feasible and that China possesses the necessary experience and technology. However, it would be a considerable undertaking, comparable in scale to the Denmark-Germany tunnel, with an estimated cost of over $8.7 billion and a completion period that could exceed 5-7 years.

Investing such a considerable sum in Crimea carries significant risks, including the possibility of secondary sanctions from Western nations and substantial reputational damage. Despite these well-known risks, China is proceeding with these plans. This suggests that Beijing has conducted a thorough assessment of the risks and benefits and perceives that the strategic advantages – such as consolidating support for Russia, gaining access to a critical Black Sea node, and directly challenging Western sanctions – outweigh the potential economic and diplomatic costs. This decision reflects China's growing confidence in its ability to navigate and withstand international pressure, as well as its unwavering commitment to a long-term strategic alignment with Russia, at the expense of the rules-based international order.

Further demonstrating this strategic alignment, on July 10, Chinese Foreign Minister Wang Yi stated in Kuala Lumpur that China is willing to work with Russia to continuously elevate the level of strategic cooperation between the two countries to safeguard their security and development interests. This statement was made during a meeting with Russian Foreign Minister Sergei Lavrov. Wang Yi emphasized that the heads of state of China and Russia maintain strategic communication, guiding the sustainable and long-term development of bilateral relations in a context of "changes unseen in a century." He recalled a recent phone conversation between the two leaders, during which they "loudly voiced" China's and Russia's positions on pressing regional and international issues. Both ministers reiterated their support for ASEAN's central role in regional cooperation and their commitment to maintaining peace and stability in the Asia-Pacific region, urging vigilance against attempts by "certain major powers" to sow discord. Lavrov also assured Russia's full support for China's presidency of the Shanghai Cooperation Organization (SCO) and readiness to jointly plan further high-level exchanges and cooperation in various sectors, including in a BRICS-like format. The parties also exchanged views on the Iranian nuclear issue and the Israeli-Palestinian conflict, with Wang Yi reiterating that "force does not bring peace, pressure does not solve problems, and only negotiations and dialogue are the only right way."

Beijing's Cynical Double Standard: Supporting Ukraine and Enabling Moscow

A particularly paradoxical and deeply cynical aspect of this situation is that China holds "noteworthy stakes in Ukrainian maritime infrastructure," with past investments in the ports of Mykolaiv and Mariupol for crucial grain and mineral exports. Russia's ongoing bombing campaigns against Ukrainian maritime infrastructure are directly damaging these existing Chinese investments. Yet, with an audacity bordering on contempt, China is now pursuing significant investments in Russian-occupied Crimea.

This creates a profound and astonishing paradox: China is simultaneously providing substantial support to the aggressor (Russia) by investing in an illegally annexed territory, while its pre-existing and significant investments in the victim (Ukraine) are being actively damaged or destroyed by the same aggressor. This suggests that China prioritizes its broader strategic alignment with Russia and its long-term geopolitical objectives – such as challenging U.S. global dominance and securing alternative trade routes – over the immediate economic losses incurred in Ukraine. It starkly highlights the transactional, pragmatic, and often cynical nature of Chinese foreign policy, where immediate economic interests can be subordinated to larger, long-term strategic goals, even at the cost of undermining global stability and food security.

Russia is actively using the Kerch sea fishing port for what are termed "grey exports," which include liquefied petroleum gas (LPG) and Ukrainian grain illicitly taken from occupied regions of Ukraine. Other strategic cargoes, such as ilmenite and various petroleum products, are also being transshipped through Kerch, along with the ports of Sevastopol and Feodosia. The use of Kerch for these "grey exports" has intensified significantly since the start of the full-scale invasion, despite the imposition of international sanctions and the official closure of Ukrainian ports on the peninsula to international shipping.

Cargo Type	Reported Origin	Modus Operandi
Liquefied Petroleum Gas (LPG)	Occupied Ukrainian regions	Intensified use despite sanctions; identifying information concealed
Ukrainian Grain	Occupied Ukrainian regions	Intensified use despite sanctions; identifying information concealed
Ilmenite (titanium and iron oxide ore)	Unspecified (used by "Crimean Titan")	Transshipment through Crimean ports
Petroleum Products	Unspecified	Transshipment through Crimean ports

Chinese investment in Kerch's infrastructure would directly strengthen Russia's capacity to conduct these illicit activities, providing material enhancements and a degree of international legitimacy. This is not merely about building a port; it is about optimizing and entrenching a large-scale sanctions evasion operation. Chinese involvement would effectively provide a crucial lifeline and a semblance of legitimacy to Russia's economic exploitation of illegally occupied Ukrainian territory. This enables Russia to deepen its economic entrenchment in Crimea, making any future de-occupation and reintegration of these assets for Ukraine significantly more complex, costly, and politically challenging. Furthermore, it directly undermines the effectiveness and integrity of the international sanctions regime designed to isolate Russia.

Concurrently, Lake Donuzlav is explicitly identified as the location of a Russian naval base. Any infrastructure development at Donuzlav, even if nominally framed as "transport" or "civilian" in nature, inherently supports and enhances Russia's naval and logistical capabilities in the Black Sea. This is particularly critical for Russia, given the significant losses sustained by its Black Sea Fleet during the ongoing conflict. Chinese investment in Donuzlav would directly contribute to Russia's military-strategic objectives in the Black Sea, enabling improved maintenance, resupply, and operational support for its fleet, and potentially facilitating more effective force projection. This action blurs the critical distinction between purely economic cooperation and direct military enablement, further implicating China in Russian aggression and challenging the delicate security balance in the Black Sea region.

China's Interest in the Black Sea and Sea of Azov: BRI, Dual-Use, and the Grain Route

China's interest in the Black Sea and the Sea of Azov extends beyond mere support for Russia in Crimea, fitting into the broader Belt and Road Initiative (BRI) strategy and presenting potential dual-use implications. The BRI, also known as "One Belt One Road," is a global infrastructure development strategy aiming to invest in over 150 countries and international organizations, comprising land corridors and the Maritime Silk Road, the latter linked to port development.

The Black Sea Region (BSR) is considered "well primed" to accept BRI offers, given its geopolitical importance as a crucial connection point. China's economic interests in the BSR value regional stability to facilitate secure infrastructure investments and increased trade. The Kerch Strait, connecting the Black Sea and the Sea of Azov, is a critically important waterway, and Russian control over it is of primary importance for its naval operations and commercial interests. The BRI's objectives of diversifying resource and energy supplies and creating new markets align with the need for stable and secure trade routes through these seas.

The concept of "dual-use" is particularly relevant. Any infrastructure development in these regions, even if nominally commercial or civilian, inherently supports and enhances Russia's military and logistical capabilities. This aligns with China's strategic partnership with Russia, especially given Russia's increasing dependence on China for critical military technology and components following Western sanctions. Therefore, Chinese investments in ports and transport infrastructure in Crimea not only serve economic and commercial purposes for the BRI but also indirectly contribute to strengthening Russian power projection in the Black Sea, an aspect Beijing considers advantageous in the context of its shared opposition to U.S. global dominance.

It is crucial to note that China was a significant and direct beneficiary of the Black Sea Grain Initiative (BSGI), receiving substantial volumes of Ukrainian grain. The subsequent collapse of the BSGI, largely attributable to Russian actions, and Russia's ongoing attacks on Ukrainian port infrastructure directly impact global food security, including the stability of China's own food supply chains. Yet, China is now investing in ports that facilitate Russia's illicit grain exports, which include stolen Ukrainian grain. By investing in Kerch, China is indirectly complicit in the theft and illicit export of Ukrainian grain. This directly contradicts its past role as a beneficiary of legitimate grain trade and its stated commitment to global food security. This highlights a cynical realpolitik approach where China's strategic partnership with Russia overrides broader humanitarian concerns and the imperative of global economic stability.

Geopolitical Dynamics in the Black Sea: The Case of Georgia and BRI Expansion

China's continued support for the Putin regime during the war has become a source of deep concern for the United States and the European Union, as Chinese markets continue to represent a crucial lifeline for the sanctioned Russian economy. In this context, a recent port agreement between Georgia and CCCC (China Communications Construction Company) signals a decision to take sides by a country that, historically, had attached great importance to "strategic ambiguity" since its disastrous war with Moscow in 2008.

This agreement is interpreted as a "concrete representation of the Georgian government's anti-Western turn." Georgia is increasingly turning to China for infrastructure projects: a study by the Tbilisi-based Civic Initiative for Democratic and Euro-Atlantic Choice states that since 2021, every infrastructure project valued over $100 million has involved Chinese companies.

Georgia is strategically located on the "One Belt One Road" route, positioned along the shortest route between China and Europe, serving as a gateway for goods to the landlocked regions of Central Asia and the Caucasus. The Anaklia port, in particular, opens doors to a primary market (Georgia, Azerbaijan, Armenia) of 17 million people from the Caucasus region and another 147 million people from landlocked Central Asian countries (Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan, and Tajikistan) and northern Iran. Anaklia, strategically located along the ancient trade route, represents a crucial transport hub on the New Silk Road between China and Europe. The location and technical and infrastructural capabilities of the Anaklia port will be decisive factors in attracting goods. In parallel, ongoing infrastructure developments in the region supporting the "One Belt One Road" initiative are an important indicator of the future increase in trade between China and Europe.

At the outbreak of the war in Ukraine in February 2022, a rapid and significant drop in cargo traffic through Novorossiysk was strongly felt by Azerbaijan and Central Asian states such as Kazakhstan and Uzbekistan. With concerned diplomats and officials flocking to Georgia, eager to find a solution to the bottleneck, talks soon began about reviving the abandoned initiative. This context highlights how China, while supporting Russia in Crimea, actively seeks to diversify and strengthen its trade routes in the Black Sea region, exploiting the vulnerabilities and logistical needs created by the conflict. This two-pronged approach underscores the complexity of China's strategy, which aims to consolidate its partnership with Russia while pursuing its broader economic and geopolitical interests through the BRI, even at the cost of further destabilizing the region.

International Sanctions and Geopolitical Implications: Beijing's Challenge to the Global Order

A broad coalition of countries, including the United States, Canada, the European Union, and various international organizations, has imposed extensive international sanctions against Russia and Crimea following the 2014 annexation and the 2022 invasion. These sanctions include import bans on goods from the region, prohibitions on infrastructural or financial investments, and restrictions on the export of certain goods and technologies, particularly those related to transport, telecommunications, energy, and exploration activities.

Engaging in large-scale infrastructure projects within annexed Crimea, such as the ports and the potential tunnel, directly constitutes a violation of these international sanctions. Chinese companies involved in such projects, particularly CSCEC and CRCC, face a significant risk of being subject to secondary sanctions from these international bodies. The United States has already demonstrated its willingness to impose trade restrictions on Chinese entities providing material support to Russia's war effort. Such involvement could lead to severe reputational damage for Chinese companies and potentially complicate China's broader trade and diplomatic relations with Western countries, which remain critical economic partners for Beijing. Ukraine has already appealed to international partners to increase sanctions pressure on China if its companies' involvement in Crimean projects is confirmed, and the National Agency for the Prevention of Corruption (NAPC) has included China Railway Construction Corporation on the list of international sponsors of the war.

The proposed $10 billion investment and the tunnel project directly challenge explicit international prohibitions on infrastructural and financial investments in Crimea. This is not a subtle act of circumvention, but a direct and high-profile challenge to the integrity and authority of the existing sanctions framework. China's engagement in Crimea effectively undermines the concerted efforts of the international community to isolate Russia and compel it to end its illegal occupation. It sets a dangerous precedent for other countries or companies contemplating similar actions, potentially weakening the global sanctions architecture and encouraging further defiance of international law and established norms.

Conclusions: The Global Order Under Attack and Moscow's Inescapable Dependence

The so-called "no-limits" partnership between China and Russia has deepened considerably since 2014, fueled primarily by a shared anti-U.S. sentiment and a desire to counter perceived Western dominance. Russia has become increasingly dependent on China for critical military technology and components, a direct consequence of extensive Western sanctions and its loss of access to Ukraine's defense industry. China is now widely considered a "crucial and irreplaceable enabler" of Russia's sustained war efforts.

The substantial investment in Crimea, including the discussion of the tunnel, directly tests the boundaries of this cooperation, suggesting that China considers its strategic alignment with Russia as primary, even if it involves navigating international condemnation and the potential imposition of further sanctions. This investment demonstrates a practical and tangible application of the partnership, moving beyond mere rhetoric to provide concrete support in a highly sensitive and internationally contested area.

While the partnership is often characterized as "no-limits," Russia's growing and undeniable dependence on China for critical technology, military components, and economic lifelines clearly positions it as the junior partner in this relationship. China's willingness to commit a substantial $10 billion investment in Crimea, and to consider projects like the tunnel, highlights its significant leverage over Moscow and Russia's apparent desperation for external capital and a semblance of legitimacy for its illegally annexed territories. This evolving dynamic grants China considerable influence over Russia's long-term strategic trajectory, particularly regarding its economic integration with Asia and its geopolitical alignment. It reinforces the concept of a "Pax Sinica" in which Russia is progressively drawn into China's broader sphere of influence. It is evident that the Russian economy, increasingly isolated by Western sanctions, will have a stringent and inescapable need for continued Chinese support for its survival and for any future development prospects.

Chinese investment in Crimean ports and the potential tunnel would unequivocally further solidify Russia's control over the Black Sea region, significantly enhancing its logistical capabilities for both commercial and military purposes. This directly impacts the existing balance of power, making it considerably more difficult for Ukraine and its Western allies to effectively challenge Russian dominance in the Black Sea. China's actions, by supporting the occupation, are in direct contradiction to its stated interest in promoting a "more stable Black Sea region," as such support inherently contributes to regional instability and the prolongation of the conflict.

This investment represents a blatant disregard for the fundamental principle of territorial integrity and the international norm of non-recognition of illegally annexed territories. This action, if not met with a robust and coordinated international response, risks normalizing the violation of international law and establishing a dangerous precedent for other powerful states to disregard the sovereignty of weaker nations in pursuit of their strategic interests. It actively contributes to a more fragmented, less predictable, and ultimately more unstable global order, where economic power is increasingly used to legitimize illegal and aggressive actions.