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Rajin gets used to the renminbi

Russia has established a good base in the North Korean port of Rajin. Can we hold positions?

Rajin gets used to the renminbi

Ivan Tonkikh

Independent expert on foreign economic activity in the APR
- There is an interest in expanding trade links, building transport infrastructure for both, or more precisely, on three sides of the border. The point of contact is the place of the confluence of the three borders - Russia, China and North Korea at the mouth of the Tumannaya River. The main growth in the region is generated, of course, by China. In the last few years in the north of the country, traditionally considered a more backward territory, there is an economic boom. With the expansion of production, new transport corridors are also needed. One of the key factors hindering development is the lack of access to the Japan (East) Sea from the North-Eastern provinces.

Near the mouth of the Tumen River, China's borders do not reach the sea a few kilometers. At various times, attempts were made to "lease" land, demarcate a section of the border along the river and other initiatives that were gently "braked" by Russia. Realizing the importance and strategic value of the Tumangan mouth, Chinese economists proposed the creation of a free economic zone and were ready to build the port for 3 years, the potential cargo turnover of which could be about 140 million tons today. The project for China is extremely important: there is no outlet to the sea - there is no development! In Beijing, this is understood very well.

To date, all the movements on the Tumangan initiative are in a "foul" stage. At the same time, China, not having received the support of activity from the Russian side, initiated active cooperation with the DPRK in these territories. China is very active: it trades, builds bridges and roads, invests in the infrastructure of border regions, builds hotels and attracts tourist flows. In Rajin weekly, more than 1000 Chinese citizens come to rest! As a result, Rajin is now flooded with Chinese. There are Chinese restaurants, shops open: in fact - this is a multiplier effect. In Rajin, the yuan is actively used. Up to the point that many Korean workers and employees in Rajin receive wages in yuan!

- And to what extent is Pyongyang comfortable with Chinese expansion?
- Koreans do not like “soft” expansion from China, of course, but they cannot do without it. The DPRK is perseveringly looking in our direction and is awaiting activity on our side, which is approximately similar to that of China. Under the conditions of tough sanctions, the DPRK needs active trade - this will give a new format and a turn in the development of their country. In the meantime, such activity is observed only from China - the border towns of Rajin, Sambo become increasingly dependent on China, on the development of its Northeastern provinces. Of course, the economic activity and pressure of China saps foreign policy "maneuvers" and limits Pyongyang on the world political arena.

- Russia is also present in Rajin - at least through its cargo turnover through this North Korean port. What are our positions?
- As for the fact that they are getting stronger, I can not say, but they are supported - for sure. Back in the 2003 year, at the meeting of the State Council of Russia, the former head of the Russian Railways Gennady Fadeyev initiated the reconstruction of the Rajin-Hasan road section and the reconstruction of the port in Rajin. All this is not fast, but it was realized. The reconstruction of the railway and the construction of berths was invested about 10 billion rubles. This is rather big money. And believe me, they are not in vain: today we have a unique ice-free port of Rajin, part of which is rented by the Russian Federation for 40 years! Now it actively transship coal, which SUEK carries by rail through the cross-border railway bridge "Friendship". In the plans of the Russian Railways there was also the development of the Trans-Korean railway for container transportation, which also required a platform in Rajin. A strong base has been created - thanks to the Russian Railways project, Russia has an excellent platform for Russian businessmen, for entrepreneurship and trade, which must be used. Moreover, there is potential for growth.

- Apparently, the construction of the pontoon bridge announced in the last year from Primorye to the DPRK is postponed, including due to a lack of cargo base. Is it necessary?
- On the road bridge the prerequisites are more strategic, but the economic part in them is an important component. Today, Russian cargo is transported to North Korea, but they go basically, paradoxically, through China. This is consumer goods, food. Through the bridge "Friendship" is only coal, but this is a transit to China, which transship the port of Rajine.
Building infrastructure for unspecified and undeclared goods is, of course, a risk for which private capital is not ready. In our realities, even taking into account the current good shifts in legislation for the development of business, production, the economy as a whole, under the conditions of the same PPP - it is still difficult to implement. But you can start with small things: the construction of a dry port, the formation of a temporary storage warehouse, the use of the same piggyback transportation by Russian Railways, which built the Trans-Korean main line with its own resources and forces.

It is expensive and expensive to build a bridge today, but tomorrow there may be a situation where the railway shoulder to Korea can not cope with the volume. Considering the declared cargo flows of the same coal through Poset, for example. Therefore, it is necessary to develop in this direction.

- China's activity in the North of the DPRK, its presence in Rajin, will the transport corridors through North Korea make up the competition between the MTC Primorie-1 and Primorye-2, which also rely on the freight base of Chinese producers in the Northeast provinces? Are there any risks of further development of our ports in Primorye?
"There are such risks, but they are justified tactically and are being reduced to paper risks, since there is no volume of cargo flows - at least in container traffic. But at the start of the implementation of the ITC in Primorye, these risks must of course be taken into account - to protect the interests of private investors in the created infrastructure.
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