Monday, October 12, 2009

Window on Eurasia: Russia’s Role as Raw Materials Supplier Reinforced by Deal with China

Paul Goble

Vienna, October 12 – The economic cooperation agreement Moscow signed with Beijing at the end of last month will reinforce Russia’s role as a supplier of raw materials to a resurgent China, a pattern that is sparking concerns both about Russia’s industrial base and about Moscow’s effective control of the Russian Far East.
On September 23, Russian President Dmitry Medvedev and Chinese President Hu Jintao signed an economic cooperation accord through 2018, under the terms of which China will help develop Russia’s raw material resources in the Far East and Russia will then export these resources to China for processing into finished goods.
That arrangement, according to experts surveyed in an article published in today’s “Vedomosti,” reflects Russia’s lack of financial and human resources to develop these sites on its own and China’s willingness to do so as long as it Chinese factories rather than Russian ones make the finished goods (
All the projects listed in the agreement, the Moscow newspaper points out, are based “on the recovery of Far Eastern and Eastern Siberian raw materials on the territory of Russia” and then the use of these materials on factories in the northeastern part of the Chinese Peoples Republic.
Aleksey Maslov, the director of the Moscow Center of Strategic Research on China, told “Vedomosti” that in his opinion the entire Russian-Chinese relationship is based on the principle “our raw materials—your technology,” not because Russia couldn’t develop these things but because it will be “several times less expensive” to do so in China.
But Sergey Prikhodko, the acting director of the Moscow Institute of Economics of the Transitional Period, said that Moscow will have to be careful lest it lose control over this region de facto, especially since China has agreed to build factories in Russia but “only on the condition that at these factories will work Chinese workers, not Russian ones.
The entire arrangement, Mikhail Budaragin, the editor of the Current Commentaries portal, said in a commentary published today could not have come at a worse time. On the one hand, he said, Moscow was missing a real opportunity to shift to an economy based on innovation as it comes out of the current crisis (
And on the other, China is exploiting this opportunity to expand its both its economy and its influence in the eastern portion of Russia. Beijing does not need to invade and won’t, Budaragin said, but what it is doing may prove equally significant, as what is now the Russian Far East looks to China rather than European Russia for its future development.
But just how sensitive the issue of Chinese control of this region de facto or even more de jure was underscored today in an interview posted on the Irkutsk-based portal. Tatyana Kharlamova, one of two women who were convicted of extremism for protesting at the October 2008 Khabarovsk economic forum, shared her views on her release from prison.
She told journalists at the Irkutsk railway station that “the Chinese are a big problem” throughout the region, one that was growing because “our [Russian] powers that be are not seeking to resolve it because the current arrangements are profitable for the elite: its members get big money from this” (
Kharlamova’s comments are an example of the linking up of economic and nationalist sentiments, a joining together of two potentially powerful motivations for popular protest and a combination that will only reinforce one another more intensely in the Russian Far East as this latest Moscow-Beijing accord is carried out over the next few years.

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