Economic review: a new stage in cooperation between China and Russia in the Far East

In recent years, Russia has been continuously trying to enforce development of the Far East. The Free Port of Vladivostok and priority development areas were established here; and investors are provided with preferential conditions for investments.

Analysts believe that the proximity of the Far East to China and the stable development of Chinese-Russian relations serve as unique advantages for expanding cooperation in the Far East. Thanks to the Belt and Road Initiative and Russia’s continuous development of the Far East, cooperation between the Russian Federation and China in the Far East has reached a new level.

The construction of cross-border infrastructure creates the prerequisites for the future cooperation extension

The Primorye Territory has border with Chinese Heilongjiang and Jilin provinces. China has always played an important role in the foreign trade of the Primorye Territory. In recent years, the government of the Primorye Territory has been actively promoting the international transport corridors «Primorye-1» and «Primorye-2» in order to increase the transit of Chinese cargoes through the ports of the Primorye Territory and achieve mutually beneficial development.

According to analysts, the Far East neighbors upon China, and the governments and peoples of Russia and China maintain friendly relations. The Chinese Belt and Road Initiative has provided unique opportunities for the Far East development. The local authorities of the Far East are ready to strengthen cooperation with China.

The Primorye Territory hopes that Chinese enterprises will be able to organize cross-border cargo transportation through the international transport corridor Primorye-1, connecting ports of the Primorye and Heilongjiang Province, and Primorye-2, connecting ports of the Primorye and Jilin Province, thereby saving time and reducing transport costs. It will also stimulate the development of adjacent territories of Russia and bring benefits to both countries.

At the moment, China and Russia have already signed a memorandum on the creation of international transport corridors «Primorye-1» and «Primorye-2». The relevant departments of both countries have activated consultations on simplifying the customs clearance procedure, expanding the throughput capacity of goods and on other issues.

International transport corridor Primorye-1 starts from the border town of Suyfenhe in Heilongjiang province and connects with ports of Vladivostok, Nakhodka and Vostochny. Corridor «Primorye-2» goes from the city of Hunchun in Jilin Province and connects with the port of Zarubino in the Primorye Territory.

According to Russian estimates, by 2030 the cargo turnover of the «Primorye-1» corridor will amount to 7 million tons of container cargo plus 5 million tons of grain, while the cargo turnover of the «Primorye-2» corridor will reach 15 million tons of container cargo and 23 million tons of grain. Thus, the transit of Chinese goods through Primorye Territory ports will help to significantly reduce travel time and transport costs.

In addition to the international transport corridors «Primorye-1» and «Primorye-2», the construction of bridges across the Heilongjiang River is also underway. The Nizhneleninskoye-Tongjiang railway bridge will connect Heilongjiang Province and the Jewish Autonomous Region, and the Blagoveshchensk-Heihe Road Bridge will connect Heilongjiang Province and the Amur Region. According to the plan both bridges will be completed and put into operation in 2019.

Analysts believe that upon completion of bridges between China and Russia, a new international transport channel will be formed, which will further strengthen trade and economic cooperation between the northeastern regions of China and the Far East, and will also attract investment from China to such sectors of Russian economy as construction of cross-border infrastructure, energy and trade in natural resources.

Agriculture and cross-border logistics are key aspects of bilateral cooperation

At the present time, in the field of trade and economic cooperation between the Far East and China, agriculture and cross-border logistics are developing at the fastest pace. It also contributes to the further development of trade and economic cooperation between both countries.

As for agriculture, in 2017, the Zhongliang Corporation /COFCO/ registered and established a representative office in Vladivostok. The company operates in the Far East and Siberia and specializes in grain trading, is interested in cooperation in such areas as warehouse logistics, food imports and processing of agricultural products, and also tries to ensure that Russian-Chinese agricultural cooperation becomes stronger and more intensive.

According to the CEO of Zhongliang Far East /COFCO Far East Co., Ltd./ Bai Tianxu, the company is currently actively involved in the development of agricultural projects in the Far East. This autumn, a large-scale trade in soybeans and corn will be launched, and then the issue of importing oilseeds such as barley and rapeseed as well as premium foods will be studied. At the same time, in the nearest 3-5 years in Russia, it is planned to organize a more systematic warehouse logistics for grain, improve local grain storage conditions, reduce losses in storage and warehousing facilities, and strengthen Chinese-Russian cooperation in the food sector even more.

Bai Tianxu notes that agricultural cooperation between China and Russia transforms from spontaneous, decentralized, regional, traditional trade relations to standardized and orderly cooperation at the state level. Zhongliang Corporation takes a practical part in the agricultural development of Siberia and the Far East. With the governmental support of both countries and due to joint efforts of Chinese and Russian enterprises, it plays an exemplary and leading role in the agricultural cooperation between China and Russia, contributes to the development of trade and economic cooperation between two countries.

Experts believe that Chinese-Russian agricultural cooperation has great perspectives. In 2018, the trade turnover between Russia and China is expected to exceed $100 billion, and the main increase will be observed in agriculture. There are several reasons for such expectations. Firstly, the Far East is sparsely populated and there are many abandoned farms left since the Soviet period. It is necessary to improve the land use factor and work efficiency. Secondly, since the Far East shares a border with China, both countries actively develop cross-border infrastructure, thanks to which Russian organic agricultural-and-seafood products can easily and quickly meet the needs of China’s huge consumer market.

As for cross-border logistics, the Primorye Territory is actively developing the Nadezhdinskoye Advanced Development Territory, which is aimed at creating a well-established warehouse logistics base in the Far East and is focused on China, Japan, Republic of Korea and other countries of the Asia-Pacific region, and is also designed to promote advanced growth in cross-border logistics between these countries and Russia.

At the present time, China Shentong Express courier servises company is planning to build an industrial and logistics parks in this advanced development territory. Chen Gang, the Head of the Shentong Company representative office in Russia, said that total area for these projects will cover about 10 hectares, and the total investment will reach 1 billion 500 million rubles (about 150 million yuan). Unified project planning at the initial stage has already been completed. Within 3 years it is planned to complete the construction of parks. In future, they will attract small and medium-sized enterprises from Russia and China, which, thanks to preferential policies, will contribute to the development of the region and logistics between China and Russia.
Source: russian.news.cn
Image source: photogenica.ru