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How China will develop the Far East
Explains research associate at the Center for Asia-Pacific Studies at the Far Eastern Branch of the Russian Academy of Sciences Ivan Zuenko
At the Eastern Economic Forum, they signed the “Program for the Development of Russian-Chinese Cooperation in the Trade, Economic and Investment Spheres in the Far East of Russia for the 2018-2024 years”. The event passed unnoticed. Meanwhile, we are talking about a program in accordance with which in the next five years, Chinese investments will be attracted to the Far East.
In September, the Eastern Economic Forum was held in Vladivostok, for which China's President Xi Jinping flew in for the first time in history. And along with it - an impressive delegation of Chinese officials. On September 11, a round table was held by the heads of the regions of Russia and China, collected 20 heads of regions from two countries. Chinese journalists did not hide their amazement. In Vladivostok, seven secretaries of the provincial committees of the Communist Party of China gathered at the same table, managing regions with a total population of 363 million people (and the 106 million province of Guangdong was represented by the governor, the second after the party secretary in the power hierarchy) and the total GRP around $ 5 trillion in approximately four times more in nominal terms than the GDP of the whole of Russia.
However, all the attention of observers was riveted on the meeting between Putin and Xi, who baked pancakes on the shore of the Sea of Japan and ate them. Against this background, the news of the signing of a key document on interregional cooperation between Russia and China, which replaced the completed 2009 – 2018 program, went unnoticed. This time, it was not signed by the leaders of the two countries, but only by the heads of relevant departments: the Minister for the Development of the Far East, Alexander Kozlov, and the Minister of Commerce of the People's Republic of China (商务部 ун) Zhong Shan (钟山). Alas, this fully reflects the place of regional cooperation on the agenda of relations between the two countries. In the foreground is high cabinet geopolitics, and issues of economic cooperation on earth are boring, tedious, and not very positive appendages.
WITHOUT GRIF "SECRET"The fact that the level of agreement under which Russia and China will cooperate in the next five years has been reduced from interstate to interdepartmental and regional does not explain the silence that surrounds the new document. There was no news about his signing even in the official VEF tape. The website of the Ministry of Development of the Far East, which usually does not miss the opportunity to write even about growing Tomatoes on the “Far Eastern hectares” in Chukotka, gave only a short note to the new program two days after signing.
As a result, the exclusive received Kommersant, the only Russian media where held express analysis of the program. The situation is no better in China, where the news about the signing of the “Plan for the development of cooperation between Russia and China in the Far East” (中俄 远东 地区 合作 发展 规划) could only be found in the survey notes on the outcome of the WEF.
The text of the program in open sources yet. Representatives of the Ministry of Development and Development explain that it will be published tentatively in late October - November, after preparing a special brochure in Chinese, which could be distributed to potential Chinese investors. Nine years ago everything was different, and agreementThe critics called the “pre-sale preparation plan for the Far East,” journalists, researchers and opposition politicians immediately began to discuss in every way.
What are the reasons for the fact that officials are not in a hurry to brag about a new document?
Firstly, it is obvious that they signed not what was expected. The new program is not a continuation of the 2009 – 2018 program. This is a completely different agreement, although, according to a source in the leadership of the Ministry of Eastern Development, “no other program will be signed” and this document will occupy the niche of the roadmap for Russian-Chinese regional cooperation.
The decision that the “failed 2009 – 2018 program will not be extended”, according to the interlocutor, was taken 8 on September 2017 of the year in Khabarovsk at the first meeting of the Russian-Chinese Intergovernmental Commission for Cooperation and Development of the Far East and the Baikal Region of the Russian Federation and the North-East PRC Then it was it's decided “To develop a new program of cooperation in the Far East and in the Baikal region”, although the public’s attention was not particularly drawn to this fact.
As a result, the impression was that the officials, who usually do not miss the opportunity to report on their successes, preferred to pass over in silence both the analysis of the results of the 2009 – 2018 program and the preparation of the document that was planned to be replaced. Although the changes in the concept of the agreement are not cosmetic, but the most fundamental.
The program now has new curators: the Ministry of the East of the Russian Federation and the Ministry of Commerce of China, instead of the Ministry of Economic Development of the Russian Federation and the State Committee for Development and Reform of the People’s Republic of China (家 发展 改革 委员会). If earlier the program was aimed at coordinating the development of two regions on both sides of the border: Eastern Siberia and the Russian Far East on the one hand, and Northeast China - on the other, now we are talking only about the Russian Far East. China is present in the new agreement only as a subject of development, whereas nine years ago it was idealistically assumed that Russian investors would participate in the development of the Chinese frontier.
Secondly, many high-profile projects, which the Ministry of the East and potential Chinese investors have been talking about for a long time, have not been included in the new program. There is no mention of “transboundary territories priority development ”(in fact, it would be about the resuscitation of the idea of border trade and economic complexes in the image and likeness of Horgos on the border of Kazakhstan and the PRC). Bypasses the issue of building cross-border high-speed highwayswhat provincial representatives regularly insist on Heilongjiang(黑龙江) and Jilin (吉林) and about what vice-premier Yuri Trutnev back in August in Dalian (大连) claimed how about an almost decided case.
Only casually mentioned is the joint development of the Big Ussuriysky Island (黑 瞎子 岛) near Khabarovsk, which, of course, does not correspond to the significance of this territory in the eyes of the Chinese partners. The program says only that “the parties recognize the Big Ussuriysky as a unique territory, which is capable of becoming the center of attraction for tourists.” Before 2024, it is planned that “each party will prepare a project for the development of its part of the island, after which the parties will jointly discuss general issues of infrastructure creation on the island, including the infrastructure for protection against the negative impact of water”.
Translating into ordinary language, this means that Russia is not yet ready to make a special visa-free and duty-free regime on a part of its territory (which offer Chinese) and under the pretext that the island periodically disappears under water (this true), delays decision making without offending their geostrategic partners.
As they say, the interlocutors familiar with the situation did not include these items in the program recommended by the Russian Foreign Ministry. The reason is the lack of confidence on the Russian side in the economic feasibility of projects and the possibility of their coordination with the security agencies.
On the eve of the WEF, it seemed that the new document might not be signed. As a result, a compromise was reached. The document nevertheless appeared, but many of the provisions that were passed through coordination in the Russian and Chinese departments during the year did not reach the final text. The Ministry of Economic Development of the Russian Federation has been removed from overseeing the program In the final version, the program looks like the next “memorandum of intent of the parties” or, as it is called in Minvostok itself, “navigator for Chinese investors”.
At once, several groups of lobbyists have reason to consider such an outcome as their defeat in the apparatus. Therefore, the 2018 – 2024 program now looks like an “unwanted child”, which can be forgotten even earlier than about the 2009 – 2018 program.
Meanwhile, all this would be in vain. Despite the difficulties of agreeing the final text, at the moment we have a document that is quite adequate for the current level of Russian-Chinese cooperation. Not too ambitious, but more intelligible and potentially realizable.
WHAT'S INSIDE?The title of the document - “Program for the development of Russian-Chinese cooperation in the trade, economic and investment spheres in the Far East of the Russian Federation on 2018 – 2024 years” reflects its content, although it would be more correct to call it “the five-year plan of the East for working with Chinese partners” .
The lion's share of the text is an abstract of the current state of Russian-Chinese cooperation in the Far East and the policies of the federal center on this issue - quite qualitatively, I must say, completed. Everything else is the very “navigator for Chinese investors” that is spoken about in the ministry. Wide strokes show potential areas of cooperation and investment, and all the specifics are related to those projects that are already being implemented.
Unlike the 2009 – 2018 program, the new document does not bind the parties (especially the Chinese one) by overestimated obligations. And, given the failure of the previous list of investment projects from 212 titles, this is not so bad.
The presence in the previous program of an extensive list of “key cooperation projects” created the impression of “document elaboration”. However, in fact, this made it unrealizable, since it was not clear who was responsible for what and how the officials should tell the business where and how to invest.
In the new document, the Russian side only “offers to consider the possibility of investing”. We are talking about petrochemistry, mining, transport infrastructure, forestry and rural farm, aquaculture and tourism. At the same time, some projects are mentioned, where the Chinese are called to invest their capital: among them, for example, the construction of an automobile bridge across the Lena River in Yakutsk, the creation of a truck assembly plant in Artyom, the modernization of a sugar cane processing plant in the Primorsky Territory, the development of gold deposits , platinum, coal, nickel and copper throughout the Far East.
Experts familiar with Russian-Chinese investment cooperation will say that there is nothing new here. All these projects have long been on the agenda of cooperation, and for some of them, joint venture agreements have already been concluded with Chinese investors. The peculiarity of the program is that specific Chinese companies are not named and target indicators for the implementation of projects are not established.
Actually terms and obligations appear only in the part of large infrastructure projects dependent on the state. By 2019, the railway bridge over the Amur Nizhneleninskoe - Tongjiang (通 江) is planned to be completed, by 2020 - the road bridge Blagoveshchensk - Heihe (黑河), by 2022 - the cableway between the same cities. Work on these projects is already underway, so, including them in the program, the authors did not particularly risk anything.
Without a deadline, the most problematic object is mentioned - a backup bridge over five meter Granitnaya River (Khubutuhe, 瑚 布 图 河) near the border crossing Poltavka - Dunnin (东 宁). The facility cannot be built for more than ten years, and without the construction of a backup, it is impossible to repair the existing bridge, which was built in the 1980s. This project is not interesting to private investors, therefore it does not have lobbyists.
For a long time, the construction of the bridge was run by Rosgranitsa, which, spending several billion rubles for the unfinished arrangement of the Far Eastern border crossings, in 2016, it is safe stopped its existence. Now the Ministry of Transport of the Russian Federation is engaged in a cross-border infrastructure (including the ill-fated bridge), which has re-started to study the situation and make an inventory of projects.
The Chinese have repeatedly proposed to build a bridge at their own expense, however, due to the fact that the object is transboundary, many controversial issues (for example, access of builders, equipment and materials to the Russian coast) could not be resolved in any way. Finally 1 March 2018, the Russian government approved draft agreement on the construction of a bridge over the river. But as of today, the project has not been translated into a full-fledged contract, and the authors of the 2018 – 2024 program have limited themselves to a very cautious wording: “The parties will contribute to the work on preparing the text of the draft intergovernmental agreement on the construction of a bridge over the Granitnaya River”.
Another clause, containing the obligations of the parties, concerns the creation of international transport corridors Primorye-1 and 2 (we already analyzed this project). The transport routes connecting the Chinese border with the ports of the Southern Primorye already exist, but for serious investments in their modernization they should become popular among Chinese shippers. So far, China, despite all exhortations on the Russian side, it does not provide an adequate flow of transit cargo from its northern provinces to the southern ones, explaining this, including the complexity of cross-border procedures and the lack of infrastructure.
There are serious doubts that this flow will be provided even in the case of the construction of a new port in Trinity Bay and a seventy-kilometer road to it from the border. However, the program signed at the WEF says that “the Chinese side will support Chinese enterprises carrying out cargo transit through the ports of Primorsky Krai, as well as participate in preparing the necessary feasibility studies determining the economic efficiency of the development of the MTC Primorye-1 and 2. The final sections of the document spell out the mechanism for implementing the program, and this is a big plus compared to the 2009 – 2018 program, where such a mechanism was absent.
The implementation will be carried out by the very intergovernmental commission, which, from the Chinese side, was previously headed by then-Vice-Premier Wang Yan (汪洋), and after the March staff appointments his place was taken by Hu Chunhua (胡春华), the last in the tacit hierarchy of the four Vice-Premiers of the State Council of the PRC. From the Russian side, it is headed by Yury Trutnev, one of ten Russian deputy prime ministers, the curator of all the development institutions of the Far East.
Thus, Trutnev’s hands concentrate powers not only on the development of the Far East, but also on Russian-Chinese regional cooperation, which makes him a figure equal to that in the history of the eastern outskirts of Russia only the graph Ants-Amur. If the “Trans-Baikal Territory” is also included in the “system of the Ministry of the East”, about which in its instagram recently said Alexander Kozlov, Minister for Development of the Far East, the entire Russian-Chinese border (and therefore all cross-border projects) will be under the jurisdiction of Trutnev.
At the intergovernmental commission a business council should be created, which is expected to include businessmen from the two countries. The operational work on the implementation of the program will be carried out by the Ministry of the East and the Ministry of Commerce of China. It is prescribed that the Chinese Ministry will attract the State Development Bank of China (国家 开发 银行) to prepare “proposals for the implementation of the program” (read: providing loans for the construction of the facilities indicated in the text).
Finally, it is determined that changes can be made to the program. For this purpose, such a mechanism was invented: the two supervising ministries will report on the implementation of the program at the intergovernmental commission and, if necessary, will conclude memorandums that are a kind of “amendments” to the program.
SUCCESS WITHOUT WARRANTIESA milestone in the Russian-Chinese regional cooperation, after which the words finally turn into deeds, the 2018 year, obviously, will not. Behind the lush façade of the WEF, with its sincere pancake meeting between Putin and Xi, as well as the representative “retreat, the Central Committee of the CPC”, real trends are barely perceptible.
The current level of regional cooperation between the two countries is so inconsistent with the high bar set by the friendship of the two leaders, and the results are so scandalous and low that the heads of state deliberately distance themselves from it, providing carte blanche to their subordinates. Compared with the realities of a decade ago, when the road map of the Russian-Chinese regional cooperation signed with pomp in New York at the meeting of Medvedev and Hu Jintao, the changes are dramatic.
There are no any illusions about quick success. But gradually, the understanding is growing that for the sake of the results, you will have to plunge into local specifics and in some cases even go to create special conditions (the “free port of Vladivostok” mode, a precedent with the introduction of an electronic visa — from this series). With the Chinese side, similar work was carried out since the 1980 – 1990s. In Russia, she was linked to the Ministry of Eastern Development and its curator Yuri Trutnev.
By centralizing the regional cooperation agenda with China, Moscow made it less dynamic than in the 1990s, but at the same time more orderly. Having concentrated the powers in one hands and prescribed, as far as possible, the mechanism of interaction with Chinese partners, Trutnev came as close as possible to solving complex issues of the cross-border agenda with the help of “political will”.
However, as the background to the signing of the 2018 – 2024 program shows, the possibilities of Trutnev and his team are not unlimited. The lobby on the part of the “traditional bureaucracy” (the Ministry of Finance, the Ministry of Foreign Affairs and especially the siloviki) is quite able to block any initiatives of the “development bureaucracy”. Therefore, the final program, signed at the WEF, turned out to be half-hearted. It gives a good deal of what and how to do it, but does not oblige anyone to anything. And it certainly does not give any guarantees that the proximity to China will finally translate into the long-awaited development of the Far East.