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Moscow’s pivot to China falls short in the Russian Far East
- Russia’s vast, resource-rich eastern flank was meant to become a gateway to China and a magnet for investment and trade. And, on paper at least, the billions are rolling in
- But experts say actual Chinese investment is far lower than official figures suggest, with many projects never being realised. Poor transport, a difficult climate and Covid-induced border restrictions are just some of the obstacles
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Russian President Vladimir Putin has repeatedly called promoting economic development in the country’s Far East the “national priority of the entire 21st century”. And for much of the past decade, he has sought to enlist China’s help in that task.
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Yet experts say that the Kremlin’s efforts to attract greater Chinese trade and investment to the far-flung region have fallen short. They note that many promised Chinese investment projects in the Far East are never actually implemented. Meanwhile, the coronavirus pandemic has disrupted business ties between the region and China by indefinitely closing their common border.
Russia’s Far East was meant to become one of the biggest beneficiaries of the burgeoning partnership between Moscow and Beijing. The vast region shares a 4,000km border with China and is awash with natural resources such as natural gas, coal, gold, diamonds, timber and seafood. Since the construction of the Trans-Siberian Railway at the end of the 19th century, the Far East has also served as a major transit hub for goods travelling between Europe and Asia.
Despite these assets, however, in the decades following the collapse of the Soviet Union the region experienced a population exodus due to economic stagnation. Putin has vowed to revive the Far East’s fortunes, partially with the help of greater trade and investment from China. In an article written ahead of his return to the Russian presidency in 2012, Putin declared that the region must catch the “Chinese wind” in the sails of its economy.
Since then, the Kremlin has established more than a dozen “priority development areas” in the Far East. These zones seek to entice foreign investors to set up production facilities in the region by offering them lower taxes and utility costs.
Additionally, in 2018, during Chinese President Xi Jinping’s visit to the Far Eastern port of Vladivostok, Russia and China signed a six-year cooperation road map in the Far East. The document provided China with a list of recommended investment projects in areas such as agriculture, tourism, and transport infrastructure.
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