Map of Russia and China
Russian Far East is the eastern part of Russia, which includes the area of river basins draining into the Pacific Ocean, as well as the island of Sakhalin, the Kuril Islands, Wrangel, Commander and Shantarsky islands.
Populating and development of Far East for many years is one of the main concerns of Russian Government.
The size of the Russian Far East is 6,169,300 km2, or about 36% of the territory of the Russian Federation.
The region has access to two oceans: the Pacific and the Arctic. It is bordered by four countries: China, Japan, the US and North Korea.
The region has vast natural resources: about one-third of all coal reserves and hydraulic power resources in the country; the forests here account for over 35% of Russia’s resources. 40% of Russian fish and seafood, 80% of soybeans come from Far East. The Far East accounts for 98% of Russian diamonds, 50% of gold. Far Eastern reserves of such strategic raw materials as tungsten, molybdenum, copper and vanadium make up about 95% of Russia’s resources.
The main branches of specialization of the Far East: extraction and processing of non-ferrous metals, diamond mining, fishing, forestry, pulp and paper, shipbuilding, ship repair.
The problem is that population Russian Far East is just 6.3 million people, which is about 5% of Russia’s population. The Far East is the most under populated region in the country. For the period 1991-2010 the region’s population decreased by 1.8 million people (22%). The population growth rate in the Russian Far East is minus 4.1%. According to some forecasts, the population of the Far East of Russia in 2050 could be reduced by almost 40 % to less than 4 million people.
In the Russian Wikipedia article on Far East one still can read an outdated message: “One reason for the active development of partnership between Russia and the European Union… is the creation of an economic alliance, which is located in the territory from Vladivostok to Lisbon, including the economic development of the Far Eastern territories. Russia, which still heavily dependent on the commodity market, and Europe can help each other and use the advantages of both economies”.
Political developments of the last year severely damaged Russian hopes to European help in development of Far East. Now most of Russian hopes are connected to China.
After the signing the agreement on visa-free entry into the Chinese-Russian border cities in 1992, a mass migration of Chinese into Russia started. Among the migrants are low income males, aged 20 to 50 years old. Their main employment sectors: construction, industry, agriculture and general commercial activities. According to some experts, the proximity of overpopulated China can lead to serious geopolitical problems for Russia in the Far East.
Russia’s Federal Migration Service is especially wary of an influx of Chinese migrants across the Russia-China border. It has warned that Chinese could become the largest ethnic group in Russia’s Far East by the 2020s or 2030s. Last summer a border official said that 1.5 million Chinese illegally entered Russia’s Far East from January 2013 to June 2014.
According to Chinese 18th-century maps, a considerable part of the territory of the present Russian Far East is a part of China. National People’s Congress of China has issued a law that provides China with the right to annex parts of the territory of foreign states on a couple of simple conditions: First – the population of the territory in question should hold a referendum in which the majority of respondents voted to join China. Second – the population should appeal to the Government of China to be accepted as a part of the People’s Republic.
Nevertheless contemporary Russian politics concerning development of the Russian Far East fully rely on the Chinese connections.
Two years ago the special Ministry of the Development of Far East was created in Russia. Alexander Galushka, the new Minister and the former Chairman of “Business Russia”, a union of Russia’s top entrepreneurs, got together the wealthiest members of the union in order to attract entrepreneurs and investments to Far East. The Russian entrepreneurs were not excited by the invitation. Their general opinion was that Russian Far East could be saved only by a miracle or federalization.
According to the expert of “Business Russia” Dmitry Golubovsky, up to 700 billion dollars (30% of Russia’s GDP) were needed for the modernization of Russian Far East, while the federal budget allocates annually only $3 billion annualy. It is clear: without large investments, including international, tangible progress towards the goal cannot be achieved.
Today Russian Government expects this investment to come only from China. Moscow and Beijing have been actively cooperating (sover the past years.
At the end of last month, Russian Finance Minister Anton Siluanov announced that Russia is interested in Chinese investments. He said that the two countries plan to develop cooperation in the field amid sanctions on the western markets. The two countries have also worked to boost mutual payments in national currencies.
Last month, Chinese Foreign Minister Wang Yi stated that the trade turnover between China and Russia is likely to reach $100 billion in 2015.
Lately many agreements have been reached enabling China to build Russian Far East infrastructures and to exploit Russian gold and silver deposits and strategic raw materials of tungsten, molybdenum, copper and vanadium.
A lot is done to allow more Chinese people to settle in the Far East and Siberian territory.
This January Russian president Vladimir Putin has offered his support to a “homestead act” that will offer free land to anyone willing to move to Russia’s Far East.
Deputy Prime Minister Yuri Trutnev, who is also the presidential envoy to Russia’s Far East Federal District suggested that Russia provide one hectare (2.5 acres) of free land “to every resident of the Far East and to anyone who is willing to come and live in the region so that they could start a private business in farming, forestry, game hunting or some other enterprise.”
The initiative failed to create an enthusiasm among Russians. But the new plan has attracted attention in China, with China Daily predicting an increased number of Chinese migrants hoping to take advantage of the new policy. The state-run media outlet says Chinese immigrants could lease the land from its new owners. The report focused in particular on agriculture, noting that an influx of migrants could help develop Russia’s Far East into “the main exporter of green food to China.”
This May the Russian Direct Investment Fund (RDIF), the Russia-China Investment Fund (RCIF), and the government of China’s Heilongjiang province have agreed on the creation of a special investment fund for agriculture projects.
RDIF head Kirill Dmitriev has told RIA Novosti:
“The sides intend to form a special investment fund of $2 billion, where Russian share is a minor one. It will mostly be the money of institutional Chinese investors, including those with significant experience in investment in the agricultural sector.”
Up to ten projects are currently being considered.
Here are some excerpts from an article from the Chinese newspaper Huanqiu Shibao, written by Wang Haiyun, a senior advisor at the Chinese Institute for International Strategic Studies:
“The agreement between Russia’s Zabaikalsky Territory and Chinese company Huae Sinban to lease 115,000 hectares of Russian farmland to China is not only a major step in agricultural cooperation, but also a perfect example of trust between the two countries…
“The fact that Russian authorities agreed to lease such an immense territory for 49 years proves that Moscow has no ideological prejudice towards Beijing.
For a long time Russian society believed in the mythical Chinese threat, including economic expansion and territorial claims. The recent agreement shows the high level of mutual confidence between Russia and China.”
Wang Haiyun stressed the need to “think open” and to eradicate “absurd” claims that agricultural cooperation means territorial expansion for China.”
We wonder how would it be possible in forty-nine years to move Chinese farmers’ families with children, grand children and great grand children who grew up on their family farms back to their historical motherland of China?
They do not call the communist Chinese ‘sneaky’ for nothing. They get a toe hold into Russia and they will shoehorn more people into the region.
You can bet the agreement has left them some wiggle room and they will begin to take advantage of it in ten to fifteen years.