Sino-Russian Local Relations: Heihe and Blagoveshchensk

Some argue that troubled cross-border relations defy extravagant claims made about Sino-Russian, such as that an alliance exists. Others argue that those ties have been troubled but have improved to the point that they no longer pose a problem for overall relations. This article recognizes persistent difficulties in the local dimension of the relationship, but it leans to the latter argument, stressing dramatic changes stemming from energy agreements and recent Chinese approval of energy-intensive, joint industrial projects on the Russian side of the border. While most attention has focused on the eastern nexus leading to Vladivostok, here I examine a linkage further west connecting Heihe and Blagoveshchensk across the Amur River.

The Power of Siberia natural gas pipeline came online near Heihe, China and Blagoveshchensk, Russia on December 2, 2019, with presidents Putin and Xi presiding through a teleconferenced ceremony. Large-scale energy projects such as this pipeline have been linked to local cross-border economic integration. Most analyses of Sino-Russian relations study top-down initiatives. This article discusses Sino-Russian cross-border energy and transport infrastructure at the local level in Heihe and Blagoveshchensk, and asks: To what extent does Sino-Russian cross-border cooperation evolve naturally or must it be managed by Moscow-Beijing top-down initiatives?

Sino-Russian energy cooperation in bilateral initiatives is contentious and has been successfully realized only after prolonged negotiations that require continuous adaptation within mechanisms created for that purpose. Sino-Russian contentiousness arises from diverging objectives in cross-border energy relations. Chinese expectations more than a decade ago were that Russia would be a raw material supplier for Chinese industrialization, using Russian oil and gas to develop a petrochemical complex, the Ha-Da-Qi Industrial Corridor, to revive Heilongjiang’s rust belt.¹ Since then, China has adapted to Russian insistence that it is not only a raw materials supplier.

Cross-border economic integration has progressed through the construction of a large array of “mechanisms” within which Chinese and Russians have negotiated, leading finally to Chinese adaptation to the Russian position and Chinese willingness to finance Russian industrialization.

A Khabarovsk expert noted “there is no single ‘roadmap’ for the joint development of border areas. The joint agreed strategy of mutually beneficial cooperation has not been developed.”² He argued that Russia and China had two different roadmaps—the Russian one whereby Russia exports industrial goods to China, and the Chinese one where Russia exports only raw materials to support Chinese industrialization. A Russian analyst noted in 2016 that Sino-Russian relations were dominated by a “situational approach,” an ongoing process of negotiations reacting to challenges and opportunities as they emerged rather than strategic planning where both sides would have common understandings regarding desired outcomes and methods to achieve them. He noted there was a need to increase predictability in Sino-Russian relations through cross-border coordinating mechanisms.³ Recent agreements suggest that they, at last, are in place.

Moscow and Beijing continue to build top-down local-level mechanisms for cross-border cooperation because economic integration does not evolve naturally from the bottom-up on the Sino-Russian border. During the 2015 Eastern Economic Forum, the Cooperation Council of the Regions of the Russian Far East (RFE) and the Northeast (Dongbei) of the People’s Republic of China was formed as a mechanism for local cross-border coordination. At the 2017 Belt and Road Forum, Moscow and Beijing established the China-Russia Regional Cooperation Development Investment Fund. Its purpose was to promote Dongbei-RFE economic cooperation with Chinese business, which had been reluctant to risk additional losses in the RFE. China’s National Development and Reform Commission (NDRC) managed the Chinese side with 10 billion RMB initially, expanding to 100 billion RMB.⁴

Additional mechanisms include the “Years of China-Russia Local Cooperation and Exchange 2018 and 2019,” and the China-Russia Expo (previously Harbin International Trade Fair), part of the Belt and Road Initiative (BRI). This article examines the development of local-level energy and transport infrastructure projects and formation of a free trade zone as components of a larger regional initiative, which provides funding for cross-border integration previously lacking. 

Historical Memory

Contemporary Chinese analysis has endeavored to shape a widespread Chinese understanding that Dongbei-RFE integration is natural, the norm, while resisting integration is an aberration. For example, a Chinese author analyzed a 200-year history of Heilongjiang-RFE trade, identifying five phases where trade flourished and only declined during times of war and political turmoil. His thesis was that Heilongjiang-RFE trade was the normal situation during two centuries, important for the socio-economic development of both sides, while political impediments were not the norm.⁵ The concept of mutually beneficial border development predates the establishment of the PRC. Russians have at times supported border cooperation while also perceiving a security threat. In June 1948, Soviet ambassador to China, N.V. Roshchin, in discussions with the Nationalist government on how to stabilize border relations, suggested developing economic projects along the Chinese–Soviet border. If that could not be worked out, Roshchin warned “the Soviet Union might be forced to establish a ‘buffer zone’ along its border with China to protect Soviet national security interests.”⁶ Such warnings have resurfaced in many periods, lingering even in recent years as Russians were wary of openness.

Foreign authors have noted that previous centuries’ unimpeded cross-border contacts were interrupted by twentieth-century conflicts, e.g., the 1929 Sino-Soviet dispute over the China Eastern Railway and Japan’s occupation of Manchukuo, which turned the borderlands into militarized zones. In the early 1950s Chinese leaders such as Gao Gang had welcomed Soviet influence in Dongbei and economic integration of Dongbei with the Soviet Union. Following factional elite conflict and policy differences which led to Gao Gang’s purge and suicide, Moscow and Beijing both tried to limit border trade and cross-border interactions with rigorous border guard patrols. Even during the 1950s era of the Sino-Soviet alliance, Chinese leaders preferred to restrict traditional practices of border trade in order to limit Soviet influence in Dongbei.⁷

After 1951, trade between the Dongbei and the RFE was carried out under a barter trade agreement. The Sino-Soviet dispute, begun in 1959, did not initially interrupt local trade, which was suspended much later–from 1967 to 1983. In 1972, the Khabarovsk Krai party secretary had floated the idea of reopening border trade because of the krai’s need for Chinese goods, but that did not happen. Instead, Moscow further militarized the border.⁸ The Soviet Union’s 1936 constitution did not give local-level governments any authority to engage with neighboring countries. Nevertheless, from 1983 border trade resumed without being officially condoned until an official trade port between Suifenhe and Pogranichny was established in the late 1980s. In 1992, Beijing gave four border cities—Heihe, Suifenhe, Tongjiang, Manzhouli—a special tax-exempt status.⁹ Trade intensified, but plans repeatedly exceeded results as Russians hesitated.

Historical memory production has been carefully managed by CCP researchers in border cities such as Heihe. The specifics of local histories have required effort at alignment with national narratives within a unified national framework. Heihe’s local history has long focused on its relationship with Blagoveshchensk.¹⁰ In contrast, Blagoveshchensk has been slow to establish linkages with Heihe.¹¹ China’s upbeat narratives of the past have failed to resonate in Russia.

Energy infrastructure and local-level integration

Energy and the new BRI context have finally changed the nature of local-level integration, but progress had been halting due to Russian wariness until developments of the past several years.

Beijing has placed its bilateral energy relations into what it refers to as the Belt and Road’s six energy channels. There had been much rhetoric about Russian support for the BRI but not many actual projects. The most important energy projects are the Rosneft-CNPC East Siberian-Pacific Ocean (ESPO) oil pipeline, the Power of Siberia gas pipeline between Gazprom and China National Petroleum Corp (CNPC); SIBUR and the Silk Road Fund’s cooperation, and Chinese investment in the Yamal LNG project in the Arctic. From the Chinese view, cross-border energy projects are linked to the question of the need for local regional integration between Dongbei and the RFE. China has promoted, and Russia has resisted, local integration across their common border. China had made Dongbei-RFE integration the key project of Russia’s participation in the BRI. To motivate Russia, China has linked local integration with progress in cross-border pipelines in 2009 and 2014. The timing of this linkage coincides with times when Moscow was pressured by low oil prices or economic sanctions following the seizure of Crimea.

A clear example of linkage in October 2009 occurred when Premier Wen Jiabao proposed that regional Dongbei-RFE economic integration be linked to Sino-Russian negotiations over the oil pipeline ESPO. Putin conceded, pressured by low world oil market prices. Called the “Program of Cooperation between the Northeast of the People’s Republic of China and the Far East and Eastern Siberia of the Russian Federation (2009-2018),” the regional integration agreement was a side agreement with less attention than the oil pipeline.

Sino-Russian negotiations over the Power of Siberia gas pipeline have been contentious.  During the 4th summit of the Conference on Interaction and Confidence Building Measures in Asia (CICA) in May 2014, there were several days of negotiating on the sidelines of the summit. The Chinese expected that the Ukraine crisis would make Putin more compliant than he actually had been.¹² Only in a last-minute deal, as Putin was about to depart, did China and Russia sign a 30-year natural gas deal, a $400-billion contract to export 38 bcm/year for 30 years in the Power of Siberia pipeline. Gazprom expects to take a 25% market share of Chinese gas imports and 13% of China’s total gas consumption by 2035. The contract was signed between Russia’s Gazprom and CNPC, not between the Russian and Chinese governments.

The May event was not a surprise as it had been decided months before on January 22, 2014 in a meeting between Gazprom and CNPC.¹³ CNPC had been waiting on China’s NDRC Price Department to approve price negotiations with Gazprom. The agreement had been delayed over differing priorities. China prioritized an eastern pipeline near Heihe in China’s Northeast. Russia wanted the Altai route which would allow diversion of gas from European markets to the Chinese market, making Russia a swing supplier.¹⁴ Putin appeared to have agreed to a price less than he had hoped for but was under pressure due to the Ukraine crisis. The US shale gas revolution was another factor as it drove the price of natural gas down. Russia reportedly had wanted a price of $400/thousand cubic meters based on prices Europe paid, while China had wanted a price of $235/ thousand cubic meters based on what Beijing paid Central Asia.

Beijing had wanted an intergovernmental agreement but did not get it in May 2014. The May energy agreement left many issues unsettled, necessitating a meeting of the energy negotiation mechanism. On August 30, 2014, the 11th meeting of the China-Russia Energy Cooperation Committee met. The purpose of the meeting was to implement agreements made in May 2014.¹⁵ The Chinese would insist on an intergovernmental agreement, which they finally obtained in October 2014.¹⁶

The latest linkage of energy project and local integration was on June 5, 2019, when SIBUR and the Silk Road Fund signed an agreement to investigate investment opportunities that would develop relations between Dongbei and the RFE and coordinate for potential joint investments in petrochemical projects. This 2019 linkage of cross-border energy projects and local-level economic integration indicated Chinese interest in investing in Russian Far East industrialization. This was a breakthrough long sought by Russia, reflecting changes in the bilateral relationship.

The Amur Gas Processing Plant (Amur GPP)

The Power of Siberia pipeline will supply the Amur GPP, located near the town of Svobodny, on the Zeya River, north of Blagoveshchensk. Situated on the Trans-Siberian Railroad, Svobodny has the status of an urban okrug and is a transportation hub for rail and river traffic. The Amur GPP, owned by Gazprom, is planned to be the largest gas processing plant in Russia. It is designed for a processing capacity of 42 billion cubic meters of natural gas per year. Specific estimates are: helium production: 60 million cubic meters per year; ethane production: 2.5 million tons per year; propane production: 1 million tons per year; butane production: 500,000 tons per year; and pentane-hexane fraction production: 200,000 tons per year. Construction started in 2015. In July 2019, Gazprom announced that the Amur GPP was 44% constructed.¹⁷

In 2018, Gazprom sought $14 billion financing for Amur GPP from the China Development bank but found the Chinese tough negotiators and also concerned about violating US sanctions on Russia.¹⁸ Instead, Russian state lender VTB provided a credit line worth 4 billion Euros for Amur GPP. Gazprom has also sought loans from other banks. In November 2019, it was announced that an Amur GPP debt package was near signing. The German contractor Linde and the Italian Tecnimont will participate in the construction. According to Gazprom, the Amur GPP construction recruits Amur citizens and will employ 3,000 local workers when operational.¹⁹ Gazprom claimed that the Amur GPP would create 15,000 local jobs during its construction without indicating that some of them would be Chinese jobs.²⁰ In all the current media reports on Amur GPP, it is not usually mentioned that it is being constructed by Chinese workers although it logically would be since in 2015 Gazprom contracted out construction of Amur GPP to China Petroleum Engineering & Construction Corp., an affiliate of CNPC.

In September 2019, Chinese construction workers brawled in the Amur GPP construction site’s canteen. Hundreds of workers threw chairs at each other in a brawl among Chinese workers with no Russian workers visible in the video posted on a Russian website and viral on social media, viewed 18,000 times on Facebook.²¹ This brought to the world’s attention that Chinese workers were constructing the Amur GPP. The cover-up of the brawl was even more interesting. As the video spread through social media, there was a Chinese and/or Russian disinformation effort to claim that it was a brawl between Chinese and Myanmar workers in Singapore, but this was disproven by the Singapore police and AFP factcheckers who ascertained that the brawl took place in Russia.²² It was announced that the Chinese brawlers were all fired afterwards.

Chinese worker brawls while working overseas in BRI projects are not unusual. In June 2019, during construction of a power plant in Bangladesh, Bangladeshi and Chinese workers brawled, leaving one Chinese dead. In August 2019, Chinese workers brawled with 300 local Kyrgyz in a Kyrgyz gold mine operated by a Chinese company. It is unusual for Chinese to brawl in Russia, although in August 2019, Chinese and Russian tourists brawled in Barcelona, Spain, leaving one Chinese dead.²³

Amur Gas Chemical Complex (Amur GCC)

The Amur Gas Chemical Complex (Amur GCC) is also located near Svobodny and is owned by SIBUR (Russia’s largest petrochemical producer). Russia’s largest private gas producer Novatek, owns 48.5% of SIBUR, Gennady Timchenko owns 17%, and Sinopec and the Silk Road Fund each own 10%. Gazprom’s Amur GPP will provide feedstock to the Amur GCC. SIBUR has been planning Amur GCC for several years but in 2016 announced it would be postponed until the Amur GPP had completed construction because Amur GCC was dependent on Amur GPP’s output.²⁴

Sinopec had indicated interest in the Amur GCC in 2015.²⁵ In 2016, Sinopec was doing its own preliminary study on the Amur GCC and had expressed an interest in participating in it.²⁶ In March 2018, SIBUR discussed building the Amur GCC in partnership with Sinopec, producing for the Chinese market, which has a large demand for polymers. It would be built near Amur GPP. Both facilities would be supplied by the Power of Siberia pipeline.²⁷

In June 2018, SIBUR announced that the Amur GCC would require approximately $8 billion in investment, and although it had been in talks with Chinese investors, it was still looking for Asian partners.²⁸ This implied SIBUR might seek Japanese or South Korean partners although it was building the complex on the Chinese border for export to China. SIBUR’s suggestion that it might partner with South Korea or Japan seemed to motivate Sinopec. In June 2019, SIBUR and Sinopec signed a joint venture agreement that would give Sinopec a 40% stake in Amur GCC. Also in June 2019, Novatek, Gazprombank, and Sinopec signed an agreement to jointly sell LNG to China,²⁹ which demonstrated that China was investing in the RFE’s industrialization. Petrochemicals are the foundation for expanding economic ties into other sectors. As Dmitry Konov, chairman of the Management Board at SIBUR Holding stated, “The agreement testifies to the strong investment appeal of petrochemistry as an industry that creates cutting-edge and green materials for construction, healthcare, car making, food, and other areas.”³⁰

During the Eastern Economic Forum 2019, SIBUR and Sinopec signed a preliminary, in-principle supply agreement with Gazprom, expanding Amur GCC to include liquid petroleum gas (LPG). The plant will be refining natural gas pumped from Gazprom’s Power of Siberia pipeline. The majority of the petrochemical products will be exported to the Chinese market. Under the expanded agreement, Gazprom, in addition to supplying 2 million tons of ethane per year, would also supply 1.1m-1.5m tons of LPG. The Amur plant’s potential output could be 2.3m tons of polyethylene and 400,000 tons of polypropylene, making the Amur GCC the world’s largest producer of polyethylene and polypropylene. A final decision was to be made in December 2019 and would depend on the Russian government’s tax arrangement.³¹

On September 17, 2019, SIBUR and Sinopec signed a framework cooperation agreement for the production of styrene, ethylene, and butylene-based block copolymers (SEBS), petrochemical products used in plastics and adhesives. Although Russia exports crude oil, in the past it needed to import SEBS because of no local production, according to SIBUR’s press release.³² They will construct a 50/50 joint venture in Russia which will promote industrialization rather than merely use Russia as a raw materials supplier.

China and Russia have not yet agreed on three sticking points: 1) the route of the Power of Siberia 2 pipeline and whether it will go through Mongolia, 2) how the Power of Siberia 2 will be financed, or 3) the price China would pay for the gas. Despite the improved cross-border ties, challenges remain that reflect economic circumstances more than political complexities.

Top-Down construction of local economic integration³³

The NDRC had taken charge of the Chinese side of Dongbei-RFE integration in July 2007. Responsibility on the Russian side was with the Russian Ministry of Regional Development. Project planning was very top-down. The September 2017 meeting of the Intergovernmental Commission for Cooperation of the Chinese Northeast and the Far East and Baikal Region of Russia decided to quietly abandon the 2009-2018 program and to develop a new program.³⁴ Chinese were disappointed that Russia had only implemented a small part of the 212 projects in the program, which caused Chinese large economic losses. A Chinese study on the program questioned whether top-down projects could be successfully implemented locally given that only 20-35% of the program’s projects were completed at the time of the study.³⁵ Chinese are concerned this pattern of blocking and delaying projects will be repeated by Russia in the BRI.

In 2018 the “Program of Cooperation between the Northeast of the People’s Republic of China and the Far East and Eastern Siberia of the Russian Federation (2009-2018)” finished with surprisingly little said about why it had failed. It had been put together quickly with poor communication between the Russian center and localities, creating a document lacking in funding and implementation mechanisms with a haphazard collection of incoherent projects.³⁶ It appeared pushed from above rather than having local economic drivers on the Russian side.

At the beginning of the economic reforms, Beijing had paired border provinces with neighboring countries. Heilongjiang had always assumed it had an exclusive claim to economic integration with the Russian Far East based on this pairing. In contrast, Russia sought to link the Russian Far East to China’s wealthier coastal region hoping for investment and business partners. In February 2018, a meeting of the Intergovernmental Commission for Cooperation of the Northeast and the Far East and Baikal Region of Russia introduced a new initiative, the “Years of China-Russia Local Cooperation and Exchange 2018 and 2019.” Its purpose was to invigorate Sino-Russian local-level economic relations with the usual activities in investment, trade, industry, agriculture, and cultural exchanges. It was another top-down push to energize Russian localities.

Some key infrastructure projects in the 2009-2018 program have been implemented. The auto bridge across the Amur River from Heihe to Blagoveshchensk had its two sides joined on May 31, 2019 and opened in November 2019. The railroad bridge between Tongjiang, Heilongjiang and Nizhneleninsk, Jewish Autonomous Region, which had in the past been a symbol of non-cooperation, was completed in March 2019, after which tracks were being laid with a planned opening in July 2019 but by December 2019 the opening had not yet been announced.

At the September 2018 Eastern Economic Forum, China and Russia signed a new agreement, the “Program for development of Russian-Chinese cooperation in trade, economic and investment spheres in the Far East of the Russian Federation (2018-2024).” In the new program, there is no explicit implication of economic integration between Dongbei and the RFE. It is less ambitious and is focused on the development of the RFE. Nevertheless, Heilongjiang will benefit from development of the international transport corridor "Primorye-1" (Harbin-Mudanjiang-Suifenhe-Pogranichny-Ussuriysk-Vladivostok / Nakhodka) which will give Heilongjiang’s exports access to Asia-Pacific markets. The other corridor "Primorye-2" (Changchun – Jilin – Hunchun – Zarubino port) will benefit Jilin and finally give Hunchun access to a port. According to Song Kui, director of the Heilongjiang Modern Sino-Russian Regional Economy Institute, the transport projects were key for implementation of Dongbei-RFE regional integration.³⁷

At the 2018 Eastern Economic Forum, 20 Russian and Chinese regional leaders held a roundtable discussion, no doubt about the 2018-2024 program. The Russian minister for Far East Development Alexander Kozlov and the Chinese minister of Commerce Zhong Shan signed the document rather than Putin and Xi.³⁸ The new program was not published until November 2018, It was compiled, in collaboration with the Ministry for the Development of the Russian Far East (Minvostokrazvitiya),³⁹ by China’s Ministry of Commerce, the Chinese secretariat for the Intergovernmental Commission for Cooperation of the Northeast China and the Far East and Baikal Region of Russia, which vowed to closely monitor its implementation,⁴⁰

Free trade zones

In the aftermath of signing the 2018-2024program, Harbin economists complained about Beijing’s policies which they felt had slighted Heilongjiang in China-Russia trade. They sought a free trade zone for Heilongjiang which had been authorized by China’s State Council in 2013 but not implemented. In fact, they argued, the Chinese state had not given strong policy support to Heilongjiang province compared to Liaoning, which has several free trade zones. Heilongjiang had only two bonded zones in Suifenhe and Harbin.⁴¹ In June 2014, Suifenhe had issued a similar announcement calling for a free trade zone there.⁴² In 2018, the Heilongjiang provincial department of commerce had announced that Mudanjiang should have a free trade zone.

On June 3, 2019, the Heihe Daily announced that Beijing would soon approve several pilot free trade zones, one of which would be in Heihe. This was reported widely in Chinese media but there was no further information at that time.  Heihe’s announcement had the appearance of forcing the issue on Putin as it was made just 2 days before Xi Jinping went to St. Petersburg.
On June 5, 2019, during Xi’s visit, he and Putin discussed local cooperation. Xi declared Chinese Northeast-Russian Far East cooperation to be a success. Putin in his press statement announced that he had agreed to create two more Sino-Russian interregional cooperation mechanisms.⁴³

On August 26, 2019, the Heilongjiang Free Trade Pilot Zone was finally approved, and on September 17, 2019, the Heihe section of Heilongjiang’s Free Trade Pilot Zone was launched. The Heilongjiang Daily listed some of the Heihe companies benefiting from the cross-border industrialization zone,⁴⁴ which is actually 120 square kilometers divided between three cities: Harbin, the provincial capital, has an 80 square kilometer zone, Heihe has a 20 square kilometer zone as China’s largest border city, and Suifenhe has a 20 square kilometer zone. This division of the trade zone was meant to settle the competition between cities: Harbin will focus on high tech cooperation with Russia, Heihe on energy cooperation, and Suifenhe on the import of wood and grain from Russia.⁴⁵

Heihe’s trade zone launch ceremony heard speeches from Heilongjiang’s deputy governor Li Haitao and Heihe party secretary Qin Enting. Li noted that Heihe had an important role in the China-Mongolia-Russia economic corridor and the BRI as it built a Sino-Russian cross-border industrial complex. Qin expressed hope that Blagoveshchensk would soon open and become a free port.⁴⁶ Given Heihe’s ambitious plans for cross-border integration, which Qin referred to as “one city, two countries,” it was awkward that Blagoveshchensk was not yet a free port city.
Heihe’s leadership had much to celebrate: the Heihe-Blagoveshchensk bridge over the Amur River, the Heihe segment of the free trade zone, the Power of Siberia natural gas pipeline coming online, and the construction of the Amur GPP and Amur GCC across the river. Harbin should have been pleased with Heihe’s success. Nevertheless, it was reported on October 31, 2019 that the Heilongjiang Provincial Commission for Discipline Inspection conducted a special investigation in Heihe on its failure to implement the Eight Regulations, which were issued by Xi Jinping in 2012 as part of the anti-corruption campaign. In January 2019, Xi, speaking to the CCP’s Central Discipline Inspection Commission (CDIC), called for greater efforts to oppose formalism (doing useless busy work pretending to implement Beijing’s policies but not doing so) and bureaucratism (being bureaucratic, holding meetings, and issuing documents without concrete follow-up activities). Violation of the eight rules included accepting bribes and using public funds for banquets and travel. Communist Party cadres were instructed to resist “the four evil winds.” According to the Heilongjiang Discipline Inspection Committee, Heihe cadres were guilty of the four evil winds, bureaucratism, and formalism, and mutually supporting each other in practicing the four evil winds.⁴⁷

On October 26, 2019, the party secretary of Heihe, Qin Enting, went to Heihe Customs to investigate the facility and to hear its work report. Qin gave Heihe Customs a pep-talk on Heihe opening, becoming more efficient, upgrading facilities, strengthening communication with Russia, and contributing more to the BRI. Qin referred to building a cross-border industrial chain and developing cross-border industrial clusters,⁴⁸ and he warned the customs officials that the opening of the gas pipeline and the new free trade zone required different behavior by local cadres, more efficient, energetic and less corrupt. The one area in which local cadres have demonstrated energetic participation is cross-border smuggling networks, a practice that has evolved naturally with deep historical roots.⁴⁹ Border towns with transport links are home to gangs smuggling goods and bribing border officials. Local cadres are often the leaders of these gangs. A free trade zone may widen the parameters of permitted trade, redefining what was previously thought of as smuggling.

Chinese crackdowns on smuggling and Russian anxieties about borders that are too open point to challenges ahead even after distinct breakthroughs have been reached. Top-down, large-scale, centrally driven projects are indicative of how the Sino-Russian relationship has developed, still not overcoming wariness over easy cross-border ties but increasing trade and meeting concerns on the Russian side about de-industrialization. New controls can be expected over smuggling.

​Conclusion: Sino-Russian cross-border mechanisms

Sino-Russian energy relations and local-level relations both require mechanisms to manage them. Although Chinese histories and analyses have constructed Heilongjiang-Russian Far East economic integration as a process that has evolved naturally, a close examination reveals the need for continuous construction of mechanisms. Beijing has claimed that Dongbei-RFE integration is the priority project of Russia’s participation in the BRI. This contrasts with 15 years ago at the 2004 China-Russia Trade-Economic Forum, held during the Harbin Trade Fair. At that time Primorye governor Darkin asked for Chinese investment in Primorye to help the krai industrialize. Heilongjiang governor Zhang Zuoji called for Russian investment in Heilongjiang Province in order to upgrade its rusting industrial base. It was clear they lacked complementarity and that neither could be a source of investment for the other. The BRI changed this, injecting large amounts of funding into the Dongbei-RFE region.

The goal of joint cross-border planning has not yet been achieved as indicated by Heihe’s plans for a cross-border industrial complex with Blagoveshchensk, but Blagoveshchensk is not yet even a free port. Heihe’s reference to “one city, two countries” may be too much cross-border integration for Blagoveshchensk. Nevertheless, mechanisms used in Sino-Russian negotiations have stabilized relations through continuous communication, which helped adjust expectations and may be able to manage divergent views in Heihe and Blagoveshchensk. It remains for future research to determine what type of changes will occur in Heihe and Blagoveshchensk following the 2019 opening of the Power of Siberia natural gas pipeline, the opening of the Heihe Free Trade Zone (FTZ), and the completion of the Heihe-Blagoveshchensk auto bridge.