Russia-China 2018 Co-operation Programme Provides for Joint Development of Russian Deposits

VLADIVOSTOK. October 12. VOSTOK-MEDIA – Russia-China 2018 Co-operation Programme provides for the joint development of Russian deposits. Processing factories and production facilities will be constructed in China, reported Vedomosty daily.

The programme of co-operation between the Russian Far East, West Siberia and the Northeast China has been approved by Russian President Dmitry Medvedev and President of the Peoples Republic of China Hu Jintao in New York on September 23. The document includes 205 key joint projects in boundary regions of both countries.

Every country has its own approaches to sustainable development of co-operation. Almost all Russian projects are based on extraction of raw materials in the Russian Far East and West Siberia. Russia is ready to sign agreements allowing for the joint development of deposits of coal, iron ore, precious metals, apatites and molybdenum. China, in its turn, will construct plant producing tin, lead, furniture, fireproof doors, various equipment, brass plates and bricks.

“In the next 10 years Russia-China cooperation will follow the raw supplies/technologies contribution principle”, stated the Director of the Chinese Center for Strategic Studies Alexey Maslov Ph.D. “The point is not that Russia has no technologies. It’s just several times cheaper to apply technologies in China than in the Russian Far East. It’s because the infrastructure in Primorsky Krai is poorly developed and is of little use for building of high-technology production.”

“It is possible to develop the Far East of Russia and East Siberia only by means of significant investments in energy production and resource development, said Yevgeny Yasin, a research director at the Higher School of Economics in Moscow. He believes that it is pointless to launch labor-intensive manufacturing there, because of scarcity of labor. The population of the region is approximately 4 mln, including women, children and elderly people. It would be very difficult to find at least 500,000-600,000 working age people.” – added Alexey Maslov.

Development of a difficult-to-access raw material resources base requires significant capital investments. Since we are not able to do it on our own the engagement of Chinese labour seems to be quite natural, Segey Prikhodko, Director of the Institute for the Economy in Transition, believes. “However, one should be very careful about engaging of foreign labour. Reasonable restrictions applied to ensure that the region remain Russian.”

China is ready to compensate for the labour shortage. The issue was discussed at the two-day forum of the two dominant parties of Russia and the PRC – United Russia and Communist Party of China. China accepted the Russian proposal to construct timber factories in Russia, provided, however, that Chinese labourers will work in the factories. To facilitate the project, China, in its turn, proposed to establish customs green-light passages, to facilitate the procedure of receiving of one-year visa and to make prolongation of visa so that once a working day is over Chinese workers could return to their home in China. In addition, they proposed to make a similar scheme in the sphere of agriculture.

The recent trend is all too evident to see, that Russia is turning into a raw material adjunct to China. It is sufficient to look at how much raw supplies and machine building account for in the Russian-Chinese trade turnover, says the Strategic Analysis Director Igor Nikolaev. Last week Vice Premier Alexander Zhukov commented unfavorably on the trade turnover structure. “Unfortunately, the share of our machines and equipment in our exports does not amount to much. The idea is to increase exports of deep-processed products in China,” – Zhukov said during an interview with Reuters on the eve of the two-day visit of the Russian Prime Minister Vladimir Putin to China. According to the Federal Customs Service, in the last seven months the turnover between Russia and China amounted to $19.5 bln. More than half of this sum falls to raw materials (56.4 %). Export of machinery is just - 4.4 %.