Russian women in regional costume welcome a visiting Chinese dignitary

Original Article

Unhealthy Competition: Ordinary Russians Fear the Impact of China's Expansion
Comment by Dmitry Shlapentokh
Special to Russia Profile, October 16, 2006

During President Vladimir Putin's March visit to China, he announced the opening of the "Year of Russia in China" saying that Russia would become a major supplier of natural gas to the country. It was a logical continuation of a trend started at the beginning of the post-Soviet era, when Russia began to supply China with weapons. Putin's accession accelerated this process. He began to court China soon after his election, and the Treaty of Friendship and Cooperation signed in July 2001 reaffirmed the importance of the Russian-Chinese relationship.

It appears that the Russian elite increasingly accepts China as Russia's most important partner; the Russian side may even be interested in a revival of the "great friendship" of the early 1950s. But the same cannot be said of the intelligentsia or the majority of the Russian people. It is true that most Russians would be happy to use China as a counterbalance to the United States. But if the American component is removed from the equation, the practical implications of Russian-Chinese rapprochement change the situation. Public opinion surveys indicate that 40 percent of Russians view a rising China as a threat to Russia. Even more important is the dynamics of the process. Upholding China as a potential geopolitical partner is drawing support among the elite―at least judging by their behavior―but the opposite trend is evident among the general public. According to Interfax, "The attitude of individual Russians to China has changed for the worse, compared to a poll conducted five years ago. In 2001, 43 percent of respondents said their attitude to China was positive, while 6 percent said the opposite. Today the figures are 32 percent and 13 percent, respectively."

In the eyes of the Russian populace, Chinese economic and―even more significantly― demographic expansion is a real threat to Russia. The fear is that the sheer numbers of Chinese immigrants will eventually overwhelm Russia. A sense of unease over the Chinese presence can be felt even in St. Petersburg and Moscow, which seem so safely ensconced in European Russia. Plans for a major Chinese business investment in St. Petersburg include living quarters, a pool, schools and libraries. Local gossip describes the plan as a "Chinatown" isolated from the rest of the city. Many Petersburgers see this development as the first phase of a swelling Chinese presence in the old imperial capital and have protested the construction.

Negative views of China continue to spread, sometimes as a sort of resignation to an inevitable calamity. An acquaintance from St. Petersburg told me he believes China's absorption of Russia is inevitable, and that the entire globe will eventually become "yellow." The same fear is expressed in Moscow, where a recently published Internet article expressed the view that many Muscovites were not igilant enough in dealing with the Chinese. The author emphasized that while the Chinese do not become involved in crime, like immigrants from the Caucasus and Central Asia, and therefore appear harmless, they represent a different threat―they will work behind the scenes to finally engulf Moscow and make it part of China. This negativity is reflected in an increasing xenophobia among Russians in general, especially toward those who do not look Slavic.

If the Chinese presence evokes unease among Russians in the European part of the country, the fear becomes overwhelming in the Russian Far East and Siberia. In fact, during Putin's visit to China, the Siberian newspaper Zabaikalsky Rabochiy published an article speculating that Chita will be part of China in 10 years. Thus, while the Russian ruling elite courts China in spite of various setbacks, the general population is moving the other way. Is it possible to suggest that Putin and Russia's elite are more focused on the pursuit of geopolitical balance, while such matters are of little concern to the general population? This is only a partial explanation. A similar split in feelings toward China can be found in the United States, which definitely does not regard China as a counterbalance to Russia. This inconsistency between the views of the Russian elite and ordinary people is based not so much on geopolitics as on economics. The business elite, especially the leaders of transnational companies, still believe that they can benefit from an active relationship with China, while the masses see the Chinese as competitors for jobs and social services in a society aggravated by demographic and cultural pressures.

The economic and demographic implications of the "rise" of China presents another interesting phenomenon. While many Russians are concerned about the growth of their neighbor, the situation is the opposite in China. Recent research shows that only a tiny fraction of Chinese view Russia as a threat, and most Chinese would advocate closer ties with foreign countries in general. Their idea is that China as a whole, including the masses, would benefit from this interaction.

Chinese standing by the Amur River, the border between Russia and China

Original Article

An Exaggerated Invasion: Chinese Influence in Russia's Far East Is Growing, but the Dangers Are Overplayed
By Paul Abelsky
Russia Profile, October 12, 2006

Few signs of dissonance greet a visitor to Khabarovsk, one of the strategic cities in the Russian Far East. Nothing immediately gives away its location seven time zones away from Moscow, far closer to Beijing and Tokyo than to the European heart of Russia. The language, the visual appearance, and the pace of life are not markedly different from a host of other places across Russia's dizzying territorial expanse. Subtle changes emerge slowly: Most cars are second- hand imports from Japan, with right-hand steering and automatic transmission; proceeding along Russia's south-eastern border, newspapers in Blagoveshchensk feature bilingual Russian-Chinese notices, while a massive monument in front of the local government building in Birobidzhan with two hands holding up a model of the Earth is a gift of friendship from the neighboring province in China. In Vladivostok, a neatly folded kimono awaits visitors checking into a hotel room.

The area's openness to neighboring Asian societies is a recent development that came only in the wake of the Soviet breakup. Until then, Vladivostok was a closed port city, which even Soviet citizens could visit only after arranging an invitation from a local resident and going through a cumbersome screening process. The Russian-Chinese border was a guarded strategic frontier, shadowed by lingering territorial disputes that set off a rash of hostilities in 1969.

Russia's liberal reforms during the 1990s, coupled with the reinstatement of trade and tourist links with China, have ushered in a new era of bilateral ties. A pivotal position at the new economic crossroads brought a windfall to Chinese border towns and altered the character of the local economy on the Russian side. Cheap Chinese imports of foodstuffs and consumer goods steered the Russian Far East through the severe socio-economic crisis of the past decade.

Still, most large cities in the area seem to represent yet another segment along the continuum of provincial Russian merchant towns, whose historic centers are less scarred by the ravages of war and ill-advised Soviet planning. Despite the alarmed reports in central media outlets about China's "creeping demographic conquest" of the Russian Far East, places like Khabarovsk hardly give an impression of a city under siege. Only in the town markets or around construction sites is there a visible concentration of Chinese people. Yet the emotional impact of China's proximity is easier to gauge. The tabloid Komsomolskaya Pravda is a dependable conveyor belt of sensationalist news stories across Russia, but its Khabarovsk edition tends to run exposes with a particular local flavor.

One typical scandal reported in August described a situation in one residential building, where an employer bought several three-room apartments and distributed them among a few hundred Chinese workers, forcing their ethnic Russian neighbors to petition authorities for help. On the same day, Tikhookeanskaya Zvezda, Khabarovsk's local daily, published an opinion piece written by a retired military officer, entitled "Which Russia Will Our Grandchildren Inherit?" that would hardly look out of place in any other Russian region. While its plaintive concern for Russia "Our Great and Common Mother" is par for the course, the grave struggle for survival is conceived here strictly in the context of a threat emanating from China: "What we have here additionally are territorial claims against our native land from the side of our neighbors, who are far from being blood brothers to us, but rather thirst not only to increase living space for themselves, but also to boost their material well-being at our expense." Despite its belligerent tone, the author turns introspective toward the end, calling for a spurred development of the Russian Far East as the surest bulwark against unwanted guests.

This emotional background helps to trace the outlines of the area's complex socio-economic predicament. The residents of the Russian Far East seem trapped between the hammer of growing Chinese assertiveness and the anvil of the region's demographic nose-dive, exacerbated by crumbling infrastructure and economic distress. The periodic ecological disasters in China discharge additional toxins into the relationship. The paradox of the situation is that disentangling the perils and the benefits of the relationship with China is a task far easier accomplished in theory and at a safe distance than with a full ground view of the situation.

"We are seeing two diametrically opposed trends in the region," said Yekaterina Motrich, senior fellow at the Institute of Economic Research of the Khabarovsk branch of the Russian Academy of Sciences, who has written critically about Chinese migration. "There is a contraction of our labor force, with the exodus of working-age adults, and the growing need to import laborers from abroad. And China is nearby, with its excess demographic capacity. To treat Chinese migration here with outright disapproval would run counter to economic imperatives of attracting working-age population into the region." According to Motrich, the population has declined by 18 percent to around 6 million since 1989 in the Far Eastern Federal District (DFO), which includes the Khabarovsk and Primorsky Territories, the Jewish Autonomous Area, the Amur Region and several sparsely populated provinces and indigenous areas to the north. The DFO accounts for more than a third of Russia, but its inhabitants represent just over 4 percent of Russia's total population. Although the Primorsky Territory has fared better than the other parts of the DFO, the proportion of demographic losses range between 9 and 67 percent in its various administrative units. China's northeastern border provinces of Heilongjiang, Jilin and Liaoning alone comprise a population of 107 million, and could surpass Russia's entire population in the not too distant future.

The imbalances of the Russian-Chinese relationship extend beyond the yawning demographic disparity. While commerce and cross-border traffic of goods developed at a remarkable pace throughout the 1990s, the nature of trade between the two countries shows the long-term liabilities for the economy of the Russian Far East. China is the chief foreign trade partner for the Khabarovsk region, and last year the volume of trade with China, including Hong Kong, exceeded $1.6 billion, with the overall turnover growing by 2.3 times in the first quarter of 2006. The breakdown of 2005 data shows that oil products made up the bulk of the region's exportsС69.3 percent. Unprocessed lumber comprised the only other substantial sales category, accounting for 24.8 percent. Negligible amounts of machinery, food products and other supplies rounded up the export side of the equation. Chinese purchases of wood from the Khabarovsk region now represent over 60 percent of the overall volume of such exports by sales. The Chinese trade output, on the other hand, encompasses a diverse range of products that points to the Russian Far East's growing dependence on China for a set of essential goods. Textiles, clothing and shoes made up nearly 40 percent of Chinese exports, trailed by deliveries of machinery and technical equipment. Chemical products and foodstuffs represented a significant share of the interchange as well. China's penetration of the local market has also meant that increasing numbers of Russian businesses rely on their relationships with Chinese partners, while their economic ties to the rest of Russia loosen.

Local officials are alarmed at the prospects of the exploding trade ties that are not supported by wider economic growth and capital investment, granting China the role of a virtual monopolist in some spheres and leaving the region precariously dependent on the Chinese markets for its own share of exports. From China's point of view, even the steady growth of trade turnover with Russia, which is expected to pass the annual mark of $30 billion this year, is still just a fraction of Chinese dealings with Japan and the United States. "The growth of production lags far behind the increasing rate of trade," said Irina Besedina, a senior official at the Khabarovsk Ministry of Economic Development and External Relations. "The recent talk of tripling trade volume with China, without corresponding GDP growth on our part, would mean a drop and redistribution of economic ties with other countries. Russia risks overreliance on China, which could soon account for more than a third of our external trade. The only strategic solution is for us to develop new production lines and additional types of merchandise to counter the presently uneven relationship."

The existing system of economic interchange is further impaired by insufficient investment links. During the Russian-Chinese Investment Forum held in Khabarovsk in 2004, the two sides signed a set of agreements, including a Chinese commitment to invest over $400 million into the economy of the Khabarovsk region. As of last year, however, financing started for only 2 out of 7 projects and reached less than $3 million. China accounts for just 0.3 percent of direct foreign investment into the Russian Far East, trailing such countries as Japan, the United States, and Austria. Two-thirds of Chinese capital went to the Khabarovsk region, where the quantitative presence of Chinese businesses is more evident. According to data for the start of this year, 449 Russian-Chinese joint venture companies operated in the region, more than 40 percent of the overall figure for foreign-owned businesses.

The current shift in the balance of power may reflect part of a historical see-saw between the two countries. Russian military exploits in the area date back to the 17th century, but the early conquests in the Amur basin were soon overturned by the Manchu dynasty. Tsarist armies were not able to establish a permanent presence until the mid-19th century, when China entered a period of prolonged decline that followed its defeat in the Opium War at the hands of the French and the British. With the treaties of Aigun (1858) and Beijing (1860), China relinquished the land north of the Amur. After securing this foothold, the Russian Empire initiated forays into Manchuria in the late 19th century. The Soviet Union drove the border to the Chinese riverbank in the aftermath of World War II, reacting to the Japanese occupation of Manchuria by taking possession of the alluvial islands in the Ussuri and Amur rivers. Despite a thaw in the bilateral relations in the early 1950s, smoldering border issues brought the two countries to the brink of a military conflict in 1969, and the relations have remained fraught with apprehension ever since. Russia's post-Communist transition and the changing geopolitics of the region have in recent years led to yet another revision of priorities for both powers. While Russian and Chinese GDPs were at comparable levels as recently as 1990, China's economic transformation over the past fifteen years has thrust it to the forefront of global trade and finance. Russia has sought to engage its neighbor over a host of issues, from military cooperation to energy ties. The Russian government has on occasion made broader strategic overtures, but the prospects of a comprehensive alliance remain uncertain.

"I do not see any real basis for strengthening Russian-Chinese links, apart from the close relationship between Hu Jintao and Putin and the collaboration of the criminal elements inside the two countries," said David Wall, an associate member of the East Asia Institute of Cambridge University and an associate fellow of Chatham House. "China has shown little interest in Russia beyond its being a hewer of wood, other than as a military equipment supplier."

Under President Vladimir Putin, Russia moved to settle the long-standing border issues. Two years ago the country agreed to territorial compromises over the control of the islands in the Amur, Argun, and Ussuri Rivers, and China's creeping proximity has stirred unease among local residents. "The transfer of the islands was not the best option for us, even though it led to a peaceful regulation of the border dispute," Motrich said. "But the local population sees the situation negatively. The islands are located in the immediate vicinity of Khabarovsk, and that's why the population can't feel encouraged about this development. Our sociological research indicates that negative sentiments toward a permanent Chinese presence are growing, especially against granting migrants the right to own property or similar assets, even though there's support for allowing a degree of temporary migration."

China's territorial strides are matched by a steady demographic penetration of the Russian Far East. It is a subject for which the lack of reliable data is more than made up for by the high pitched tone of political grandstanding. The latest official statistics for the Khabarovsk region, made available by the local branch of the Federal Migration Service (FMS), are far from showing an ongoing demographic conquest of the area. During the first six months of this year, the total number of foreign citizens who entered the workforce amounted to just over 9,000, of which 3,779 or 41 percent came from China. Last year, the proportion of Chinese workers was 4 percent lower, and their overall number stood at 2,686. In the Khabarovsk region, Chinese migrants are drawn overwhelmingly to retail and small trade, wood logging, and construction, with a much smaller share heading for agriculture and other activities. In neighboring areas such as the Jewish Autonomous District and the Amur Region, agriculture plays a more important role in attracting foreign laborers. An overwhelming majority of migrants head for the large cities, with Khabarovsk, for example, receiving more than half of all Chinese who enter the Khabarovsk Region. Over the past few years, the flow of workers from North Korea, Vietnam, and the CIS countries held constant or dipped slightly, while Chinese migration jumped by 26 percent between 2004 and 2005 in the Khabarovsk Region alone. Nonetheless, human cross-border traffic is still limited to a few thousand crossings. A year-end report for 2005 filed by the Khabarovsk branch of the FMS concluded that the overall number of foreigners who entered the area actually declined by 20 percent from the previous year to just over 28,000.

"The Khabarovsk Region, specifically, is forced to attract laborers from China and the CIS due in part to the area's territorial parameters and low population density," said a high-ranking FMS official speaking on the condition of anonymity. "Moreover, most of this workforce is engaged in low-skilled and low-paid tasks which, frankly, most Russian employees would not agree to undertake. And that's despite the fact that unemployment figures here are rising. In our view, inviting foreign laborers is necessary for the local economy, and we are not seeing any serious social or ethnic tensions as a result."

It is an opinion echoed throughout the whole region by bureaucrats, experts, and bystanders. For example, a lawyer in the regional administration of the Jewish Autonomous Region says that even with the rise of the Chinese presence, there are few tensions between Chinese migrants and local residents, despite differences in mentality. "It's hard to maintain an overall parity with China, but our interests are in many ways complimentary," he said. "The broader strategy here is to revive and settle the region, which also means continuing to engage China, but it will be a real challenge to turn the situation vis-a-vis the Chinese fully in our favor."

The precise intent and nature of Chinese economic interests in the Russian Far East is also a cause of much debate. Despite being unable to back their allegations with much evidence, Russian critics of Chinese "expansion" point to nebulous programmatic documents
circulating within high government circles in Beijing that call for an absorption of underpopulated areas in Russia's border region by means of peaceful economic incorporation. Chinese schoolchildren purportedly study with geographic maps that render the swathe of the Russian Far East as Chinese land.

Andrei Zabiyako, a professor and the head of the Religious Studies department at the Amur State University in Blagoveshchensk, has conducted detailed surveys of the migration process, carrying out expeditions into the outlying border areas. He says such accusations are not only unfounded, but also tend to misjudge the Chinese outlook with regard to Russia.

"What is Chinese migration? It's a coordinated and stable process which stems wholly from the region's economic circumstances," Zabiyako said. "It does not involve a chaotic or spontaneous movement of people. The number of Chinese in any given place within the Russian Federation corresponds to the number that makes economic sense to the Chinese themselves. No more and no less."

Zabiyako says the Chinese side extends brutal treatment to those caught crossing the frontier illegally, with border guards known to pummel the offenders in full view of Russian officials after the handover. Businesses based in Russia need to apply for permits in order to invite foreign personnel. During the first seven months of this year, 224 such licenses were issued in the Khabarovsk Region, 10 percent more than during a similar period last year.

In Zabiyako's view, the Chinese would make perfect immigrants with their industrious work ethic and willingness to assimilate. Conversations with local vendors in markets across the region, where ethnic Russians and Chinese come into the most direct personal contact, do not contradict such an assessment. Chinese traders and hawkers of goods tend to speak rudimentary Russian but know enough to engage in lively bargaining sessions with Russian customers. Yekaterina, a middle-aged fruit seller in Blagoveshchensk, just shrugged when asked about her attitude toward her Chinese counterparts. "We just work next to each other and there has been no particular tensions," she said. "Just take a walk around the stalls and see for yourself."

What is rarely disputed is that Russia lacks viable, formalized mechanisms to regulate economic activity in the border region, leaving it unable to reap the rewards of the booming trade. The visual contrast between Blagoveshchensk and Heihe, separated by half a mile across the Amur, is emblematic of the divergence between the two countries. Heihe's sprouting towers stand out against the provincial calm in Blagoveshchensk, a town seemingly immured in its provincial past, whose only major innovation was to introduce an extensive gambling industry to cater to the Chinese clientele. Officials in Khabarovsk, in particular, stress the competent use of special benefits and incentives by the Chinese side in managing ventures that operate along the periphery. A belt of flourishing border towns have sprung up alongside the Russian frontier in just over a decade, benefiting from increased traffic in goods and tourism, in contrast to much of the other outposts in Russian Far East, which have at best stabilized their socio-economic standing.

"Unlike the Chinese, we haven't even formulated a conception of how the border region should function in economic terms," said Besedina. "There is no legislative basis for spelling out the area's status. China is enjoying the bulk of the benefits from the economic relationship, having already developed and employed the necessary legal norms. In our case, the increased federal oversight is not allowing the regions to take full advantage of the situation."

The most extreme future development includes not a form of Chinese conquest but, rather, an ideologically driven federal intervention into a self-sustaining, albeit not wholly efficient, economic setting, evolved around a close integration with the Chinese market. Local observers warn of a backlash if constraints are placed on cross-border trade. Separatist ideas were floated in the 1990s, and the experience of the nominally independent Far Eastern Republic, which existed during 1920-22, provides a faint precedent, but secession still figures as an improbable, worst-case scenario.

"An enormous part of the population is already integrated into an economic relationship with China, from the hotel business and retail to construction," Zabiyako said. "Devastating economic losses will follow if any of this comes under increased control for political reasons from Moscow. Minimizing, or simply not boosting Chinese presence in the region could bring about a crisis. All our problems are our problems, and we shouldn't blame them on others."

Although the perils of Russia's present ties with China are real, genuine change can only come with the Far East's revival of its economic base and a capacity to benefit from the growing integration with China, rather than fighting the inevitable."A Russia that's economically strong would also make it strong strategically," Motrich said. "In the end, the fear of the Chinese is just a mirror image of our own economic downturn."