Russian And Chinese Governments Discuss Intergovernmental Development Of Russian Far East

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Plans To Coordinate Trade & Development Between Far East Russia And North-East China, Regional Bilateral Trade Up 45.5%   

By Chris Devonshire-Ellis  

Russia’s Deputy Prime Minister and Presidential Plenipotentiary Envoy to the Far Eastern Federal District Yury Trutnev, and China’s Vice Premier of the State Council Hu Chunhua chaired the fourth meeting of the Russia-China Intergovernmental Commission on Cooperation and Development of the Far East and Baikal Region of Russia and of Northeast China on November 17, via videoconference.

Trutnev stated that “Russian-Chinese relations of all-round partnership and strategic interaction continue to develop dynamically in all areas. China is Russia’s main economic partner in the Far East. In 2021, trade between Far Eastern regions and the PRC increased by almost 30%. In January-August 2022, it rose by 45.5 percent, to reach US$12.1 billion.”

Hu responded by stating “Our current task is to implement the agreements reached by our countries’ leaders and develop a plan of further cooperation between the Russian Far East and China’s Northeast, and thus prepare for the 27th regular meeting of the heads of government of Russia and China. Through joint efforts at the previous meeting of the co-chairs, our parties overcame many barriers and achieved good progress in cooperation.”

The meeting participants discussed the interaction between Russia and China in the Far East. In particular, 53 projects with a total investment of US$13.2 billion are being implemented in priority development areas and in the free port of Vladivostok involving Chinese capital. These are projects in industry, agriculture, construction, transport and logistics. “I believe that we have the opportunity to develop our cooperation even further. There are currently 2,760 projects with a total investment of US$107.6 billion being implemented in the Far East using state support measures,” said Yury Trutnev.

The Russian Deputy Prime Minister spoke about the work to improve preferential treatment in the Far East and about ensuring the best conditions for doing business in Russia and in the Far East, and to create a special environment for international investors from friendly countries – an international priority development area.

The Russian Government is preparing a relevant draft law. “We plan to create special preferential conditions for investors in the new area. We will gladly continue this work together. If Chinese companies have proposals regarding necessary conditions for ensuring reliable and secure work, we are ready to consider them,” he added.

The priority development area regime could cover the entire Far East. “We have discussed further improvements in the priority development areas with (Russian Prime Minister) Mikhail Mishustin and suggested creating an integrated area in the Far East to avoid adopting governmental resolutions on establishing separate priority development areas. We suggested making the entire territory of Russia’s Far East a priority development area. Mikhail Mishustin has tentatively supported this proposal,” said Yury Trutnev.

Bilateral relations are further promoted through the development of transport infrastructure, including the two new cross-border bridges linking Russia and China. In June 2022, traffic was opened on the Blagoveshchensk-Heiheroad bridge. This will help increase trade to approximately 1 million tonnes of cargo per year. On the eve of the fourth meeting of the Russia-China Intergovernmental Commission, the Nizhneleninskoye-Tongjiang railway bridge was opened. The initial cargo volume is estimated to reach 5.2 million tonnes a year, over time increasing to 20 million tonnes per year.

“The development of cross-border infrastructure is very important for us. Two cross-border bridges between Russia and China have been put into service, and now we need to increase traffic volumes on them” Trutnev said.

Russia’s Deputy Minister of Transport Igor Chalik expressed gratitude to China for Russia’s request to increase the number of regular passenger flights between Russia and China from four to five every week, including the Avrora Airline flights on the Khabarovsk-Harbin-Khabarovsk route (one flight per week), and also presented Russia’s proposal to increase the number of direct flights between cities in the Russian Far East and China. In the past Vladivostok has operated regular services to Harbin, Beijing, Dalian, Shanghai and Hong Kong.

There are also prospects for bilateral cooperation in agriculture. Russia is ready to continue increasing exports of agricultural products to the Chinese market and in this regard pays special attention to the Russia-China New Land Grain Corridor project. The key element of the project is the launch of the Trans-Baikal Grain Terminal with a capacity of 8 million tonnes per year, where it will be possible to store and transship portions of the grain crop destined for China. This will significantly expedite cargo forwarding. The terminal is ready and was opened during September’s Eastern Economic Forum in Vladivostok.

Russia and China also discussed the efforts of the Business Council of the Far East and Baikal Region of Russia and of Northeast China. The meeting was attended by more than 130 companies from Russia and China, as well as representatives from government agencies and the expert community of the two countries. Annual meetings of the Business Council are expected to become a platform for bilateral cooperation in the Far East.

Amur Region  

A separate point for discussion was region-to-region cooperation between Russia’s Far Eastern regions and the northeastern provinces of China. Vasily Orlov, Governor of the Amur Region, presented proposals for expanding cooperation with Chinese provinces. Orlov said cross-border trade between the Amur region and China almost doubled in the first eight months of 2022 compared to the same period the year before. The increase was facilitated by the transport of goods via the new Blagoveshchensk-Heihe road bridge. At this stage, its capacity is up to 190 freight vehicles per day.

Primorye Krai  

According to Vera Shcherbina, Chair of Russia’s Primorye Krai, which borders China’s Heilongjiang,  the region’s foreign trade in 2021 exceeded US$10 billion, with China accounting for more than US$5 billion of this amount. Trade between Primorye and China grew by 31% between January and September of this year, with cross border transactions also evolving – the two countries are now making a significant number of transactions in their respective Rubles and Yuan currencies.

Shcherbina proposed taking steps to boost foreign trade even further, such as having checkpoints operate 24 hours a day, facilitating the transit of goods from China to Primorye, increasing the export of high-quality goods from the region to China, as well as resuming the tourism exchange, continuing cultural, scientific, educational and other types of cooperation.

Sakhalin  

Valery Limarenko, the Governor of Russia’s Sakhalin Region, an island chain close to China and Japan, talked about possible cooperation in the implementation of investment projects with China in the Sakhalin Region. Projects in the field of logistics, tourism, oil and gas were presented. Among other things, Chinese companies were invited to take advantage of the preferential tax regime on the Kuril Islands, to invest in tourism and the fishing industry.

Cultural & Tourism Cooperation  

The commission members also discussed ways to expand people-to-people cooperation between the regions of the Russian Far East and Northeast China. Last year, Vladivostok hosted the 41st World Amateur Go Championship. Representatives from 77 countries took part in the tournament; the winners represented China. In September 2022, the Chinese team took part in the International Vladivostok Regatta, a major rowing competition held as part of EEF-2022. The Russia- China Cultural Fair international festival holds a special place in the two countries’ humanitarian cooperation. They also have strong ties in education. More than 4,000 students from China study at Far Eastern universities and account for 56 percent of the total number of foreign students.

“The development of trade and economic relations and friendly ties between our countries not only meets our economic interests, but also paves the way for the future transformation of international economic relations. The Russian government is open to dialogue and is ready to support our Chinese partners in the Far East” Trutnev said.

Other Russian participants included Ambassador Extraordinary and Plenipotentiary of the Russian Federation to China Igor Morgulov, Minister for the Development of the Far East and the Arctic Alexei Chekunkov, Deputy Minister for the Development of the Far East Anatoly Bobrakov, Deputy Minister of Transport Igor Chalik, Ambassador-at-Large of the Russian Foreign Ministry Alexei Yevsikov, heads of Russia’s Far Eastern regions, as well as senior officials from the Far East Development Corporation, the Federal Service for Veterinary and Phytosanitary Supervision, the Federal Agency for Fishery, and the Federal Customs Service of Russia.

Chinese investors looking to the Russia market may contact Maria Kotova at Dezan Shira & Associates. She is fluent in both Mandarin and Russian: russia@dezshira.com

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