Irkutsk
Ulan-Ude

Blagoveshchensk
Chita
Yakutsk

Birobidzhan
Vladivostok
Khabarovsk

Magadan
Yuzhno-Sakhalinsk

Anadyr
Petropavlovsk-
Kamchatsky
Moscow

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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.

How China will develop the Far East
Photo: Sergey Karpukhin / Reuters
2018 year promised to be an important milestone in the development of Russian-Chinese regional cooperation - primarily in the Far East, which, according to the well-known saying Vladimir Putin, is "Russia's national priority for the whole XXI century." Several factors indicated this at once. First, it was this year that the program for coordinating the development of border regions of Russia and China for the 2009 – 2018 years was coming to an end (we wrote about its pros and cons here). Secondly, in February “cross years of Russian-Chinese interregional cooperation” were launched in Harbin (哈尔滨), and along with them reanimated a number of cross-border projects (although from the real results of cooperation so far there are only “Exhibitions, conferences and festivals ”). 

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 then did not hide their amazement. In Vladivostok, seven secretaries of the provincial committees of the Communist Party of China gathered at one table at once, governing regions with a total population of 363 million people (and the 106 million Guangdong province was represented by the governor, the second person after the party secretary in the power hierarchy) and the total GRP of about $ 5 trillion, which is nominal in terms of approximately four times the GDP of all of Russia. 

However, all the observers' attention was focused on the meeting between Putin and Xi, who baked pancakes on the shores of the Sea of ​​Japan and ate them. Against this background, the news about the signing of a key document on interregional cooperation between Russia and China, which replaced the completed program 2009-2018, 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 (大 部长) Zhong Shan (钟山). Alas, this fully reflects the place of regional cooperation in the agenda of relations between the two countries. In the foreground is high cabinet geopolitics, and issues of economic cooperation on earth are boring, tiresome and not particularly positive appendages.

NO 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 an 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, Kommersant, the only Russian media outlet where held express analysis of the program. The situation is no better in China, where the news of the signing of the "Development Plan for 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 overview notes on the outcome of the WEF. 

The text of the program itself is not yet available in open sources. Representatives of the Ministry for the Development of the Russian Far East explain that it will be published approximately at the end of October - November, after the preparation of a special brochure in Chinese, which could be distributed to potential Chinese investors. Nine years ago, everything was different, and agreementWhat critics dubbed "the Far East's pre-sale plan," was immediately discussed in every way by journalists, researchers and opposition politicians.

What are the reasons for the fact that officials are not in a hurry to brag about a new document?

First, it is clear that the signing was not what was expected. The new program is not a continuation of the 2009–2018 program. This is a completely different agreement, although, as a source in the leadership of the Ministry for the Development of the Russian Far East assures, “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 made on September 8, 2017 in Khabarovsk at the first meeting of the Russian-Chinese intergovernmental commission on 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 officials, who usually do not miss an 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 a document that was planned to be signed to replace it. Although the changes in the concept of the agreement are not cosmetic, but of the most fundamental nature.

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, the new program did not include many high-profile projects that the Ministry of the East and potential Chinese investors talked about for a long time. There is no mention of “cross-border 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 what Deputy Prime Minister Yuri Trutnev was talking about back in August in Dalian (大连) claimed how about an almost decided case.

The joint development of Bolshoi Ussuriisky Island (黑 瞎子 岛) near Khabarovsk is mentioned only in passing, which, of course, does not correspond to the significance of this territory in the eyes of the Chinese partners. The program only says that "the parties recognize Bolshoi Ussuriysk as a unique territory that can become a center of attraction for tourists." Until 2024, it is planned that "each of the parties will prepare a project for the development of its part of the island, after which the parties will jointly discuss general issues of creating infrastructure on the island, including infrastructure to protect 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 the interlocutors familiar with the situation say, the Russian Foreign Ministry recommended not to include these points in the program. 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 law enforcement 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, which had been agreed upon in the Russian and Chinese departments during the year, did not reach the final text. The Ministry of Economic Development of the Russian Federation was removed from the supervision of the program. In the final version, the program looks like another "memorandum of intent of the parties" or, as it is called in the Ministry of the East, "a 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 policy of the federal center in this regard - quite high quality, I must say, executed. Everything else is the very "navigator for Chinese investors" that the ministry is talking about. Potential areas of cooperation and investment attraction are shown in broad strokes, 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" gave the impression of a "well-developed document". However, in fact, this also made it unrealizable, since it was not clear who was responsible for what and how 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 on some of them agreements on joint ventures with Chinese investors have already been concluded. The peculiarity of the program is that specific Chinese companies are not named and targets for project implementation are not set.

Actually, terms and obligations appear only in part of large infrastructure projects that depend on the state. By 2019, it is planned to complete the construction of a railway bridge across the Amur Nizhneleninskoe - Tongjiang (通 江), by 2020 - the Blagoveshchensk - Heihe road bridge (黑河), by 2022 - a cable car 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 safely 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 offered to build a bridge at their own expense, however, due to the fact that the facility is transboundary, many controversial issues (for example, the access of builders, equipment and materials to the Russian coast) could not be settled. Finally, on March 1, 2018, the Russian government approved draft agreement on the construction of a bridge across the river. But as of today, the project has not yet been embodied in a full-fledged agreement, and the authors of the 2018–2024 program limited themselves to a very cautious wording: "The parties will facilitate the work on the preparation of 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 have already analyzed this project). The transport routes themselves, connecting the Chinese border area with the ports of South Primorye, already exist, but for serious investments in their modernization, they must become in demand on the part of Chinese shippers. While China, in spite of everything 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 ensured even if a new port is built in Trinity Bay and a 1-kilometer road to it from the border. However, the program signed at the WEF states that “the Chinese side will support Chinese enterprises that transit goods through the ports of the Primorsky Territory, as well as participate in the preparation of the necessary feasibility studies that determine the economic efficiency of the development of MTC Primorye-2 and 2009. In the final sections of the document, the implementation mechanism is spelled out programs, and this is a big plus in comparison with the 2018–XNUMX program, where such a mechanism was absent.

The implementation will be carried out by the very intergovernmental commission, which was previously headed by the then Deputy Prime Minister Wang Yang (汪洋) from the Chinese side, and after the March personnel appointments his place was taken by Hu Chunhua (胡春华), the last in the unofficial hierarchy of the four vice-premiers of the PRC State Council. On the Russian side, it is headed by Yuri Trutnev, one of ten Russian Deputy Prime Ministers, curator of all 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 Minvostok", which is recently reported on their Instagram said Minister for the Development of the Far East Alexander Kozlov, 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 WARRANTIES

Obviously, 2018 will not be a milestone in Russian-Chinese regional cooperation, after which words will finally turn into deeds. Behind the lush façade of the WEF, with its soulful pancake meeting between Putin and Xi, as well as the representative “visiting session of the CPC Central Committee,” 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, giving carte blanche to their subordinates. Compared to the realities of a decade ago, when the roadmap for Russian-Chinese regional cooperation was signed with fanfare in New York at a meeting between Medvedev and Hu Jintao, the changes are striking.

There are no more illusions about quick success. But the understanding is gradually growing that for the sake of results one will have to plunge into local specifics and in some cases even go for the creation of special conditions (the regime of the "free port of Vladivostok", the precedent with the introduction of an electronic visa - from this series). With the Chinese side, similar work has been carried out since the 1980s and 1990s. In Russia, it turned out to be connected with the system of the Ministry for the Development of the Russian Far East 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.
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