Russia’s Far East Opens Up To Heilongjiang, Jilin & Inner Mongolia

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Op/Ed by Chris Devonshire-Ellis

Russia, China To Open Offices Promoting Russian Far East

Chinese Premier Li Keqiang’s is currently in Moscow, and has been holding meetings with Russian Prime Minister Dmitry Medvedev. The two countries are aiming to develop their bilateral trade to US$200 billion in the next 5 years – an average growth rate of 20% per annum. 2018 growth in trade was about 25%. Premier Li is scheduled to meet with Russian President Vladimir Putin today.

Part of that initiative is to look at ways to further develop the Russian Far East. The Northern Chinese Provinces of Heilongjiang, Inner Mongolia & Jilin all share a border with the region.  Although geographically part of Siberia, the Russian Far East is categorized as a separate region from the Siberian Federal District in Russian geographical schemes. The regional capital is Vladivostok.

Russia and China will open offices promoting investment in Russia’s Far East regions, according to a memorandum signed yesterday by the two countries. The agreement on “Mutual opening of offices on attracting and promoting investment” was signed by the Ministry for the Development of the Russian Far East and Arctic and the China Ministry of Commerce. Russia’s Far East region accounts for 32% of all FDI into Russia and is attractive to Chinese and other foreign investors for a number of reasons:

  • Resources such as land use are under-utilized, offering potential for agricultural development. Russia is prepared to offer free land use rights to investors using fallow arable land for this purpose;
  • The region has a long coastline leading out to the Pacific Ocean and offers fishing potential;
  • Tourism and adventure tourism are growth industries;
  • The region contains numerous other resources in timber, oil and gas and processing. China is energy-poor and requires energy feeds from Russia. Processing and other related industries may be established.
  • Minerals and gem processing – Russia is the worlds largest supplier of diamonds and also has globally significant gold deposits. China is a major buyer of both.

The article Vladivostok & Russian Far East To Be Developed As Significant North-East Asian Resources & Trade Hub explains in further detail.

The two countries have also been putting into place Investment Funds for the Russian Far East. The China-Russia Regional RMB Fund” caters for jointly financed projects in Siberia, the Russian Far East and North-East China.

A major regional driver is to improve and upgrade infrastructure ties between Russia’s Far East and North China. This includes the reconstruction of roads, rail and air connectivity. An example of this is the newly completed Tongjiang bridge across the Amur River, connecting the two trading cities of Blagoveshchensk and Heihe. Blagoveshchensk is linked to the Trans-Siberian railway, while Heihe is connected to the Chinese national railway with links to Harbin and via road to Dalian.

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Russia Briefing is written by Dezan Shira & Associates. The firm has 27 years of operations in China and assists Russian and Foreign investors establish operations into the country. Please contact us at russia@dezshira.com or visit us at www.dezshira.com

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