Wednesday, February 9, 2011

Window on Eurasia: China Investing Far More in the Russian Far East than Moscow Is, ‘Nezavisimaya’ Says

Paul Goble

Vienna, February 9 – Chinese businesses have invested about three billion US dollars in the Russian Far East over the past year, more than three times as much as Moscow has transferred to the budgets of the Amur oblast, Primorsky and Khabarovsk kray and the Jewish Autonomous District, “Nezavisimaya gazeta” reports today.
Picking up on a Xinhua news agency story, the editors of the leading independent Moscow paper argue that these Chinese investments “in Russian lands are not only the private initiative of enterprising neighbors … but are a clear state policy for the mastering of new territories” (
And it quotes with apparent alarm Xinhua’s words that “with the permission of the governments of China and Russia, Chinese entrepreneurs can open in Russia industrial and agricultural zones including zones” for a variety of purposes on very favorable terms for the Chinese side.
“It is indicative,” the editors of “Nezavisimaya” say, “that the Chinese authorities are already creating on their own territory special organs for the administration of [these] zones in Russia. And what that means is that the development of the Russian Far East is now “controlled not so much from Moscow or Khabarovsk as from Harbin.”
Such arrangements are “completely justified,” the editors say, because “he who pays calls the shots, and investments of the amount of three billion US dollars – if one believes the calculations of the Chinese themselves – is an enormous financial resource which exceeds that transfers from Moscow to the local budgets.”
“It is not to be excluded,” the editors say, that this figure may be an exaggeration or that China will not do any more in the future. But “nevertheless, the official report of a government agency about multi-billion dollar investments in Russia means that the powers of the Heavenly Kingdom are underscoring their interest in our eastern territories ‘seriously and for a long time.’”
The paper quotes Sun Kui, a Chinese specialist, to the effect that “the opening by Chinese investors of zones in Russia is mutually profitable for both sides” because if increases the openness of the border regions, increases tax collections and eliminates the problem of a lack of labor for particular enterprises.
But what is not clear, “Nezavisimaya” says, is “why the initiator of investments in the Far East is not the Russian but the Chinese authorities who are capable of organizing investments in production facilities with a positive future and secure the production of goods which enjoy demand both in Russia and in China.”
Many Russian bloggers and nationalist media outlets have drawn the most alarmist of conclusions about Chinese investment activities in the Russian Far East. What makes this article important is that “Nezavisimaya gazeta” in the past has been extremely measured in its comments about those developments.
For its editors to put out such an article suggests that concern about what China is doing is spreading in Moscow from the more nationalistic groups to mainstream opinion, something that may force Moscow to try to restrict Chinese investment in the Russian Far East or come up with more money of its own to compete with China there.

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