Cooperation between the Northeastern provinces of the People’s Republic of China and the Russian Far East regions within the framework of the One Belt One Road Initiative. Challenges and prospects

According to the statement of the PRC Ambassador to Russia, Li Huey, the Russian Federation is an important participant and key partner of China in the framework of the One Belt One Road initiative.

As Russian Energy Minister Alexander Novak stated in May 2017 in Beijing at One Belt One Road Forum: “Russia sees additional opportunities for Eurasian integration and large-scale joint infrastructure projects: expansion of railway and port facilities, construction of interstate power lines and pipelines and a couple of other things.

Currently, a list of project proposals with a focus on integration is being formed. Among the priority projects that have already been agreed with the Chinese side are the construction of the Europe-Western China road route, the Moscow-Beijing Eurasian highway, «The Power of Siberia» gas transmission system.

This workshop is concerned  mainly the territories of the Far Eastern Federal District, which includes 7 most eastern regions of Russia. However, a number of projects are not territorially limited to one Federal District. Due to its geographical location, the Russian Far East traditionally plays the role of a transit region, gradually increasing its own exports. However, at the moment, not all of its capabilities are used fully because of underdeveloped transport infrastructure.

For the Russian Far East, the development of cooperation with the Northeast provinces of the PRC is becoming especially important. The most important and ambitious joint projects currently being implemented are the creation of international transport corridors Primorye-1 and Primorye-2.

The corridor Primorye-1 connects Chinese Harbin with Russian ports Vladivostok, Nakhodka and Vostochny in Primorsky Krai. “Primorye-2” is a route from the border Chinese city of Hunchun to the nearby Russian ports Posiet and Zarubino. The amount of necessary investment in the project is more than $ 3.3 billion. It is assumed that Zarubino will be used for goods transit from the northeastern provinces to the eastern and southern regions of China.

In addition, the federal authorities came up with the idea of building a hyper-speed transport system Hyperloop between the port of Zarubino and the border of China. Recently, the Ministry of Transport of China supported this idea, so the emergence of “hyper-pipelines” in the “Primorye-2” seems to be a realistic project that will further increase the efficiency of the transport corridor.

Another group of infrastructure projects, important for both sides, is the construction of bridge crossings over the Amur River (In Chinese – Heilongjiang) Between Russia and China. One of them will connect the city of Tongjiang in Heilongjiang Province and the Russian city of Nizhneleninsk in the Jewish Autonomous Region. The bridge is necessary for the export of iron ore concentrate from “the Kimkano-Sutarskiy ore mining and processing combine” (23.2% of shares belong to the Chinese company General Nice), the largest mining enterprise of the Jewish Autonomous Region, which will reach its full capacity in the coming years.

In the Amur Region, a project of an automobile bridge is being implemented, which will connect Blagoveshchensk and Heihe in China. The bridge must be built before 2019. The construction of the bridge will contribute to strengthening trade and economic ties between the border areas, as well as the development of tourism.

Another integral component of cooperation in the context of the integration of Russian-Chinese initiatives is the joint development of the Northern Sea Route (the Chinese project is the “Ice Silk Road”). This route has many advantages – starting with the reduction of the delivery time from Asia to Europe and ending with the development of remote northern territories and the Arctic as a whole. In the case of successful development of the route, the ports of the Far East, as well as Chinese ports (including the northeastern port of Dalian) will become major transshipment bases and logistics centers serving freight traffic.

For successful development of a relatively new route, its constant economic loading is necessary. In these conditions, the Yamal LNG gas project will play a significant role in the development of the route (29.9% belong to CNPC (20%) and the Silk Road Fund (9.9%). The first batch of liquefied natural gas from the Yamal-LNG project to China was delivered a week ago to Chinese port Jiangsu by a tanker “Vladimir Rusanov”, built in 2017 specially for the project.

The creation of the “Ice Silk Road” is of great importance for China and Russia. This is not only an important addition to the joint construction of the One Belt One Road initiative, but it also brings good economic benefits to both parties, reduces the cost of shipping, increases the efficiency of transportation, and increases the safety of shipping. Most likely, China will become Russia’s largest customer on these routes. Sufficient Chinese traffic and a huge demand for energy resources will become the driving force for the successful development of the NSR.

The Russian government, for its part, is taking serious measures to create a favorable investment climate in the Russian Far East. So, this process is promoted by special regimes so-called “territories of advanced development”, free ports, as well as other projects promoted by the federal center and regional authorities.

In addition to the implementation of economic projects, a significant increase is also observed in humanitarian exchanges. China and Russia consistently carry out large-scale events such as “Year of the Country”, “Year of Chinese and Russian Language”, “Year of Tourism” and “Year of Friendly Youth Exchanges”. The number of direct passengers and freight flights between the regions of China and Russia are consistently increasing.

Numerous joint scientific forums and symposiums are held. Since the declaration of the initiative, a number of Russian-Chinese forums have been held devoted to the discussion of the initiative, the prospects for its development and the main problems that our countries will face.

At the same time, it is necessary to note the existing problems hindering intensive development between the Far East of Russia and the Chinese provinces. The main problem is the fact that at present time there is no single “roadmap” for the joint development of border areas. The joint agreed strategy of mutually beneficial cooperation has not been developed.

In addition, it should be noted that trans-border trading develops according to the old schemes – Russia exports resources to China, China exports goods with high added value to Russia. Thus, there is a qualitative trade imbalance that leads to a negative attitude to such cooperation on the part of some Russian political forces, primarily opposition forces, and is used by them as an argument for slogans to stop economic interaction.

The emergence of Russia as a transit power connecting the East and the West is inevitable: in my opinion, the most profitable transport routes pass through Russian territory, and the volume of freight traffic grows every year. At the same time, the creation of transport corridors and cross-border bridges, as well as warehouse infrastructure, makes it possible to create, in fact, a single economic space in the northeast of China and in the southern part of the Russian Far East.

In conclusion. Russia and China recently signed a program of cooperation in outer space for 2018-2022. Who knows, maybe as a result of its implementation, we will see an expansion of the Chinese initiative, to the third, a faster way in addition to land and sea.

Greizik Sergei
Research Fellow
Research Centre for Shanghai Cooperation Organization and Asia-Pacific Studies,
Khabarovsk State University of Economics and Law

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