Carnegie Moscow Center
Despite many years of talk of the Far East’s economic dependence on Chinese capital and labor, the pandemic has revealed that both of those resources can be found in Russia itself.
The inflow of coronavirus cases entering China from Russia won’t ruin the two countries’ flourishing relationship based on pragmatic interests. The Chinese are more disappointed in the anti-China rhetoric coming from the White House than in Russia’s inability to swiftly combat the coronavirus outbreak.
Alex Gabuev talks to Ivan Zuenko, an expert on the Sino-Russian relationship, about the real scale of the Chinese presence in Russia’s Far East.
Chinese investment in Russia’s Far East is precisely what it should be given the current level of the region’s development. Most of the Far East is more focused on obtaining subsidies from Moscow than foreign investment.
In 2015, Russia introduced visa-free travel for South Koreans. Since then, Korean tourism to Vladivostok has skyrocketed, bringing an economic windfall to the city. That, in turn, has become an argument for lifting the visa regime with China. But several issues stand in the way.
Few noticed when Russia and China quietly signed a new program on developing trade and economic cooperation in the Russian Far East in. That new agreement may appear less extensive than the document it replaces, but it is also potentially more implementable. Just don’t expect any major breakthroughs.
The trade war with the United States has piqued China’s interest in Russian soybean imports. Russian officials are optimistic about the prospects of increasing soy exports to China, but their expectations are unrealistic.
The failure of the Program of Cooperation (2009–2018) cannot be blamed entirely on the inertia of Russian bureaucrats or the paucity of local budgets. The program was underdeveloped from the start.
Contrary to popular belief, Chinese tourism generates very little revenue for the Russian economy. The reason lies in the inner workings of the Chinese tourist economy in Russia, in which visitors are limited to package tours where most payments are made in China or through Chinese banks. The Russian authorities should recognize this problem and stop treating Chinese tourism as the new engine of economic growth.
China has no port of its own on the Sea of Japan, and Russia could use this to its advantage. But for Russia to attract Chinese cargo, it is essential to simplify customs controls and seriously invest in roads and ports. Considering that both of these factors are Russia’s responsibility, the completion of the Primorye transport corridors has been stalled for a long time.