Russia–China Cooperation: A View from the Region

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Notes

1. The Program for Cooperation between Regions in the Far East and Eastern Siberia in the Russian Federation and the Northeast of the People’s Republic of China (2009–2018) was confirmed by the president of the Russian Federation and the Chairman of the People’s Republic of China on September 23, 2009. According to official documents (for example, “On the process for implementing the Program of Cooperation between Regions in the Far East and Eastern Siberia in the Russian Federation and the Northeast of the People’s Republic of China (2009–2018) in 2014,” Far East and Zabaikal’e International Association for Economic Cooperation of the Subjects of the Russian Federation, available at http://assoc.khv.gov.ru/regions/foreign-economic-activities/russian-chinese-cooperation-program-monitoring/788 (accessed December 15, 2017)), the program is considered one of the main mechanisms for developing interregional cooperation with the PRC, first and foremost in the investment sector. The Russian Federation Ministry of Economic Development and the PRC State Committee for Development and Reform have been named the agencies responsible for coordinating implementation of the program. Despite the fact that officially the program is in effect until 2018, starting as soon as 2015 it had almost disappeared from the bureaucratic discourse, and experts pronounced it a failure. See, for example, V.L. Larin, “Tikhookeanskaia Aziia v rossiisko-kitaiskikh otnosheniiakh: zatianuvsheesia ozhidanie proryva,” Rossiia i ATR, 2014, no. 3, pp. 5–21; R. Lee, “The Russian Far East and China: thoughts on cross-border cooperation,” Foreign Policy Research Center E-notes, November 2013, available at https://www.fpri.org/docs/Lee_-_Russia_and_China.pdf (accessed December 15, 2017); G. Christoffersen, “The Russian Far East and Heilongjiang in China’s Silk Road Economic Belt,” China Policy Institute: Analysis, April 26, 2015, available at https://cpianalysis.org/2016/04/25/the-russian-far-east-and-heilongjiang-in-chinas-silk-road-economic-belt/(accessed December 15, 2017).

2. A similar optimistic approach is also characteristic of regional scholarship and analysis in Chinese materials, as well.

3. A.T. Gabuev and I.Iu. Zuenko, “Rossiisko-kitaiskoe prigranichnoe sotrudnichestvo: vverkh po lestnitse, vedushchei vniz?” Rossiia-2016, the annual report of the Observo French–Russian Analytical Center (under the leadership of Arnaud Dubien), Moscow–Paris, 2016, p. 407.

4. According to Rosturizm, 325,000 tourists from China came to Zabaikal’e and the Russian Far East in 2016, 45% more than in 2015. The total number of Chinese tourists in Russia was 1.29 million. (Source: “V 2016 godu turpotok iz Kitaia po bezvizovomu kanalu vyros bolee chem na 40% po otnosheniiu k predydushchemu godu,” Federal Tourism Agency, February 9, 2017, available at https://www.russiatourism.ru/news/12260/(accessed 12/15/2017).) These figures include all border crossings by Chinese citizens for any reason, except for employment or long-term study in Russia (Rosstat order no. 510 of 2014). Two thirds of Chinese tourists in Russia come under the visa-free group exchange channel.

5. Here we mean growth on the order of 10% annually (in absolute terms, $1.5 billion in 2016, of which $1.03 billion comes from frozen fish and seafood). However, for individual categories of goods, growth is very strong in comparison with 2014: almost a factor of 1000 for sunflower oil, a multiple of up to 18 for chocolate, up to 9 for honey, up to 3 for beer, 2.7 for baked goods, and 2 for flour. (Source: N. Novopashkina and A. Makhukova, “Kitai stal krupneishim importerom rossiiskikh produktov po itogam 2016 goda,” RBC, March 1, 2017, available at http://www.rbc.ru/business/01/03/2017/58b59b3f9a79476034e16c28 (accessed December 15, 2017); “Rossiisko-kitaiskii dialog: model’ 2017. Doklad,” RSMD, 2017, no. 33, available at http://russiancouncil.ru/papers/Russia-China-Report33.pdf (accessed December 15, 2017).)

6. Interview included in the article by I.Iu. Zuenko, “Sladkaia sila. Zavoiuiut li rossiiskie produkty kitaiskii rynok?” Lenta.ru, January 23, 2017, available at https://lenta.ru/articles/2017/01/23/sooosweet/(accessed December 15, 2017).

7. According to Federal Customs Service data, trade with China totaled $66 billion in 2016, which is 4% more than the previous year but is still noticeably less than the record-setting $88 billion in 2014, before the fall in energy prices. (Source: “Tamozhennaia statistika vneshnei torgovli,” Federal Customs Service, available at http://www.customs.ru/index2.php?option=com_content&view=article&id=24778:—2016–&catid=51:2011-01-24-16-27-51&Itemid=1977 (accessed December 15, 2017).)

8. The PRC’s share of trade in the FEFO totaled 25% in 2016 (in absolute terms, $6.1 billion), and for individual border regions, their dependency on trade with China is absolute: 97% ($59 million) for the Jewish Autonomous Okrug and 88% ($445 million) for Amurskaia Oblast’. As before, the main types of export for the FEFO are mineral resources (32%), frozen fish and seafood (26%), and wood (19%); in contrast with national figures, the border regions have a positive net trade balance with China, explained by their position as transit zones. (Source: “Rossiisko-kitaiskii dialog.”)

9. These sites include the Advanced Socio-Economic Development Territories and the Free Port of Vladivostok.

10. In 2016 and 2017, Rosagro subleased significant acreage of arable land in Primorskii Krai on which the company Armada, created by a Chinese investor, had previously operated. The transfer of the land from one tenant to another happened because Rosagro turned out to be capable of offering the landowners significantly better terms. Facing the aggressive entry onto the market of the big nationwide player, Armada’s management also sold a significant volume of agricultural technology to Rosagro and shifted its focus to other areas of activity.

11. Data from Gabuev and Zuenko, ibid., p. 408. Calculated according to Russian Federation Central Bank data.

12. For more details, see S.A. Ivanov, A.E. Savchenko, I.Iu. Zuenko, and L.E. Kozlov, Kitaiskii kapital na iuge Dal’nego Vostoka: ozhidaniia gosudarstva i realii vzaimodeistviia, Vladivostok, IIAE DVO RAN, 2017, p. 7.

13. For example, Deputy Prime Minister Yurii Trutnev shares data according to which China’s share in investment projects being carried out in the FEFO totals $3 billion, which makes China the top performer in those terms. (Source: “Ob”em privlechennykh investitsii v proekty na Dal’nem Vostoke uvelichilsia pochti v 2 raza,” Russian Federation Ministry for the Development of the Far East, June 29, 2017, available at https://minvr.ru/press-center/news/6083/(accessed December 15, 2017).) Meanwhile, according to payment balance data kept by the Russian Federation Central Bank, over the course of 2016 a total of only $345 million in Chinese investment was brought into Russia. (Source: “Statistika vneshnego sektora,” Russian Federation Central Bank, available at http://www.cbr.ru/statistics/?PrtId=svs (accessed December 15, 2017).) Even according to Chinese data, the cumulative volume of investment from the PRC over all years was $14 billion at the end of 2015. (Source: V.O. Kashin, “Mnogo li Kitai investiruet v Rossiiu?” Valdai, International discussion club, June 9, 2017, available at http://ru.valdaiclub.com/a/highlights/mnogo-li-kitay-investiruet-v-rossiyu/(accessed December 15, 2017).) Comparing these figures leads one to conclude that the deputy prime minister is relying on inflated statistics or is speaking about the potential volume of investment indicated in memorandums, rather than real figures for capital brought into the country.

14. Data from Kashin, ibid.

15. Data from K.V. Kondratiuk, “Investitsii Kitaia na Dal’nii Vostok Rossii: problemy privlecheniia i osnovnye napravleniia,” Molodoi uchenyi, no. 26, pp. 321–24.

16. Rus-Agri Industries Inc., Offshore Leaks Database, available at https://offshoreleaks.icij.org/nodes/10152284 (accessed December 15, 2017).

17. Interview included in Zuenko, “Sladkaia sila.”

18. See, for example, I.Iu. Zuenko, “Dorogoi dlinnoiu. Kak v Kitae postroili vysokoskorostnoe chudo sveta,” Lenta.ru, March 2, 2016, available at https://lenta.ru/articles/2016/03/02/railways/(accessed December 15, 2017).

19. For more details, see I.Iu. Zuenko, “Okno v Kitai: pochemu u Kazakhstana poluchilos’, a u Rossii net,” Moscow Carnegie Center, February 16, 2017, available at http://carnegie.ru/commentary/68012 (accessed December 15, 2017).

20. W. Shepard, “China Tells Sri Lanka: We Want Our Money, Not Your Empty Airport,” Forbes, July 31, 2016, available at https://www.forbes.com/sites/wadeshepard/2016/07/31/china-to-sri-lanka-we-want-our-money-not-your-empty-airport/#2514f52c1beb (accessed December 15, 2017).

21. Photograph at http://2gis.ru/vladivostok/firm/70000001020169608/gallery/firm/70000001020169608/photos/firm/70000001020169608-3518437214812911?queryState=zoom%2F11 (accessed December 15, 2017).

22. 东宁县2014年国民经济和社会发展统计公报, China Dongning, 7/6/2015, available at http://www.dongning.gov.cn/index.php/cms/item-view-id-5002.shtml (accessed December 15, 2017).

23. At present the casino owns a five-star hotel with 121 rooms, as well as a casino with 25 VIP tables, 42 tables with classic games, and 498 gaming machines; in other words, this is a very modest establishment compared to sizes seen in Macao or even Minsk.

24. For more details, see I.Iu. Zuenko and V.V. Sonin, “Pravovye ogranicheniia i neformal’nye praktiki zemlepol’zovaniia kitaiskikh fermerov na Dal’nem Vostoke Rossii,” Pravoprimenenie, 2017, no. 1, pp. 57–65.

25. An interview with some of those experts is included in I.Iu. Zuenko, “Kitaiskoe prisutstvie v sel’skom khoziaistve Dal’nego Vostoka: nekotorye aspekty problemy,” Izvestiia Vostochnogo instituta, 2015, no. 2, pp. 51–59.

26. Included in 刘爽, 马友君, 钟建平.中俄沿边地区基础设施建设状况考察及分析, 微信公众平台, July 24, 2017, available at http://mp.weixin.qq.com/s/5EsXxSn3KvkfrB47l88YNQ (accessed December 15, 2017).

27. This happens due to time differences between the Russian regions and China (two hours for the Jewish Autonomous Okrug, Khabarovskii Krai, and Primorye; one hour for Amurskaia Oblast’) and also because Russia and China do not observe the same holidays. Several times the decision to transition border checkpoints to around-the-clock operations has been made and announced, but its implementation is being delayed until the infrastructure is modernized.

28. Included in Ivanov, Savchenko, Zuenko, and Kozlov, Kitaiskii kapital.

29. Herein lies Chinese investors’ indubitable competitive edge over those from Japan and Korea, who often simply have no idea how to tackle the problem of entering the Russian market.

30. The Russia–China agreement on border crossing points dated January 27, 1994, only allows freight and passenger-carrying vehicles to move across the border. Exceptions are made for crossings between Zabaikalskii Krai and the Inner Mongolia Autonomous Region (Zabaikal’sk-Manzhouli and Starotsurukhaituiskii-Heishantou), where travel across the border in a personal vehicle is allowed, though only within the boundaries of those towns.

31. A simplified visa regime for visiting the Free Port of Vladivostok for citizens of 18 countries, including China, went into effect on August 1, 2017 (starting January 1, 2018, it will be valid for Kamchatka and Sakhalin). The rules make it possible to obtain an electronic visa valid for 30 days, good for an eight-day stay in the region entered. In the first three months in which this regime was in effect, according to Minister A. Galushka, it was used by over 4,000 people, of which 2,000 were Chinese citizens (source: “Elektronnuiu vizu poluchili 2 tysiachi grazhdan KNR,” Russian Federation Ministry for the Development of the Far East, November 2, 2017, available at https://minvr.ru/press-center/news/9611/(accessed December 6, 2017)). The total number of Chinese tourists in Primorskii Krai in 2016 was 190,000.