Russia and China Cooperation

Just fifteen years ago, Heihe was a small Chinese village with a couple of dim lights visible at night. This offered a dramatic contrast with the large Russian port of Blagoveschensk, located on the opposite bank of Amur.

The contrast still persists except that now Heihe’s spectacular city lights blind Russian inhabitants strolling along the embankment. Both cities hoped that the thawing relationship after three decades spent with gun muzzles aimed at each other would bring both countries everlasting prosperity. However, as demonstrated by the Russian and Chinese economic modernizations, the outcome was significantly different.

Those on the Russian side confess that if it were not for China, the region would have been even more severely affected by the economic experiments led by the Moscow government in the 1990s. The price paid for the generous help of neighboring China is the region’s heavy reliance on imports of clothes and food from across the border. In return, Russia offers only raw materials, mainly unprocessed wood, and often pays several times more for the finished products made in China and re-exported back to Russia. Local authorities usually blame Moscow for pumping all the money out of the region, thereby depriving it of the essential resources needed to boost the local economy.

These complaints are understandable, yet other Russian regions sharing a border with China boast of better achievements than Blagoveschensk. Their notably larger quotas allowing Chinese migrant workers into their regions could be a clue. For example, numerous legal immigrants in Khabarovsk, another city in the Russian Far East, are involved in wood processing, textile manufacture, building houses and even growing watermelons in nearly sub-arctic conditions. They pay taxes and invest in the local economy instead of stocking the market with shoddy clothes.

Khabarovsk authorities made an effort to overcome xenophobia, and came to realize that instead of begging for scarce donations from the federal government, located half the world away, it was more advantageous to employ the cheap Chinese labor force. Naturally, fears that the Russian Far East would be transformed into a new Chinese province by influx of migrants are still present. Yet, those who are concerned are often oblivious of how strict current Russian immigration regulations are. They impose effective internal control over foreign immigrants, who have to register with local authorities in every city they visit. In addition, the Sino-Russian border is much better patrolled than frontiers with former Soviet republics. As a result, the vast majority of illegal migrants get intercepted once they reach the opposite bank of Amur.

Further arguments that Chinese will contribute to an increase in delinquency and unemployment rates also lack reason and evidence. In fact, Chinese migrants are more likely to become victims of violent crimes on Russian territory, and Russian citizens are unwilling to assume the jobs of migrant workers for the same low wages.

Clearly, the Russian “wind of change” did not influence the “Soviet” approach to business. On the contrary, fast-paced development of the Chinese border settlements reassures the Chinese citizens and government that the current course should be maintained. The town of Heihe too, enjoys a steadily increasing income from cross-border trade that closely resembles the Opium Wars trade model. The only difference is that now Chinese tawdry goods are playing the role of opium for Russia.
Though Chinese authorities give off the air of being absolutely satisfied with the current situation, they could be looking for more civilized forms of cooperation. Large-scale investments in the Russian Far East, a vast and incredibly resource-rich territory, is the core part of China’s new strategy to develop its North-Eastern provinces that still trail behind the coastal areas. Many small businesses in China produce surplus income and feel squeezed too tightly within the national borders. They are ready to invest in Russia as soon as they are assured that bureaucratic hurdles on the Russian side are removed. Apparently, both Russia and China have similar economic ambitions, but it remains unclear when both parties will finally adopt a cooperation model that would better advance their goals.

This entry was posted in China Russia relations, chinese economic policy, chinese economy and tagged , , , . Bookmark the permalink.

One Response to Russia and China Cooperation

  1. Scott says:

    Detailed reporting of conditions in Russia’s Far East are difficult to find. A very welcome and interesting essay. Hopefully the governments of Russia and China can find a path to develop their bordering regions in a mutually beneficial way.

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