Chinese and Iranian companies are expanding operations in territories occupied by Russia in Ukraine, despite the areas being internationally recognized as part of Ukraine, as this includes construction projects in Mariupol and quarry operations in the Donetsk region, according to reports from Al Jazeera and UNITED24 Media.

Construction and Quarrying Deals

Evgeny Solntsev, the self-proclaimed “prime minister” of the “People’s Republic of Donetsk,” announced a contract with two Chinese companies—Zhongxin Heavy Industrial Machinery and Amma Construction Machinery—to supply equipment to the Karansky quarry in the Donetsk region. The halted stone produced there has been used in construction projects in Russian-occupied areas, Al Jazeera reported.

The companies provided machinery for the quarry, which was revived by occupation authorities in 2022 and signed cooperation agreements with Chinese firms by late 2023, according to UNITED24 Media. The Azov Sea port of Mariupol is among the busiest construction sites, with dozens of buildings reportedly erected on top of mass graves of civilians killed during the city’s 2022 siege.

Financial and Industrial Expansion

UNITED24 Media also reported that around 80 bank branches in the occupied Donbas region have begun trading in cash yuan. This cooperation includes exchange of local delegations and efforts toward “import substitution,” all while China officially maintains a policy of not recognizing the occupation of Crimea or the annexed regions, according to the Insider on April 23.

Chinese engagement in the region predates Russia’s full-scale invasion of Ukraine. In late 2013, the Ukrainian government signed a memorandum with a private Chinese firm to build a deep-water port in Crimea and reconstruct a port in Sevastopol. However, the 2014 annexation and subsequent international sanctions initially halted these plans. By June 2014, the Chinese company announced it was no longer pursuing projects in Crimea.

The dynamic changed after 2022 as Moscow and Beijing strengthened their ties. Reports emerged in 2023 regarding secret discussions to build a transport tunnel under the Kerch Strait following Ukrainian attacks on the existing bridge. By 2025, Ukrainian intelligence noted attempts to attract Chinese investment for the Kerch seaport and military infrastructure at Lake Donuzlav.

Geopolitical Implications and Concerns

Observers have noted Chinese-owned vessels entering Sevastopol with their transponders turned off, leading to formal protests from the Ukrainian Ministry of Foreign Affairs. UNITED24 Media reported that these developments highlight the growing Chinese presence in the region, despite the international community’s stance against the occupation.

Solntsev expressed confidence in the potential of the cooperation, stating, “I’m confident that the potential of our cooperation is huge, and we’re only beginning to implement it.” The post included photos of four Chinese representatives standing next to separatist officials and the flags of China, Russia, and the “People’s Republic of Donetsk,” according to Al Jazeera.

Zhongxin Heavy Industrial Machinery did not respond to Al Jazeera’s request for comment. Amma Construction Machinery is harder to identify, with its website listing a phone number in the Russian city of Irkutsk in southern Siberia and a link to the website of Bark, a company that specializes in equipment exports.