The Russian Far East and China’s Northeast: A Decade in the Shadow of the Belt and Road Initiative

The Russian Far East and China’s Northeast: A Decade in the Shadow of the Belt and Road Initiative
Gaye Christoffersen

In 2013, the same year the Silk Road Economic Belt (SREB)—soon to be rolled into the Belt and Road Initiative (BRI)—was unveiled, Vladimir Putin proclaimed that promoting economic development in the Russian Far East is the “national priority of the entire 21st century.” His “Turn to the East,” announced in 2012, was seen as benefiting, first of all, the Far East region of Russia. It was in 2012 that Putin hosted the APEC Economic Leaders’ Meeting in Vladivostok.  For over two decades already, the development of this area had been closely linked to Northeast China—just across the border—pointing to the need for taking a close look at the interrelationship of thinking on both the Russian and Chinese sides. In parallel, Xi Jinping and Putin announced their plans, and through 2021, they jockeyed to adjust to each other’s initiatives toward cross-border interaction.

In this article, I start with the evolution of China’s thinking because it has had a greater impact on Russian policy than the other way around. Chinese analysts frame the seventy-year history of the PRC in the border areas as having had five stages with the latest placing all projects of border integration under the BRI: border free trade zones, infrastructure construction along the border, and a going-out strategy of Chinese FDI.¹ In Russian analysis, we can detect at least three stages in thinking about this corner of Russia: (1) 2012-16, high expectations in Moscow for large, but controlled, Chinese investments in the Far East; (2) 2017-19, Russia agreeing to joining the Far East into the BRI as many noted failed earlier plans and doubted new ones; and (3) 2020-21, combining the Far East with the Arctic in a maritime partnership with support for the Northern Sea Route against the shadow of pandemic border closings. In the first stage, Russia did not fulfil its promises, scuttling Chinese plans. In the second, Russia agreed to new joint plans, but China saw scant progress. Plans then centered on the Polar Silk Route, but China sought to bring them into the BRI, while Russia countered with an “Arctic-Pacific” region affirming its sovereign control. In late 2021, borders remain largely closed, the Northern Sea Route awaits more climate change, and geopolitical, maritime ties offer more hope.

The Chinese and Russian sides have differed on how to design cooperation. China focused on infrastructural projects useful for importing Russian natural resources, while Russia focused on developing industries in resource processing. The two sides failed to reach a consensus. Later, China insisted, as a Near-Arctic state, on equal partnership in developing the Northern Sea Route, while Russia demanded respect for its sovereignty and rejected China’s Arctic claims. They are still in disagreement despite joint efforts.

Beginning with a pre-BRI stage, there have been at least three phases in how China conceptualized Chinese Northeast-Russian Far East (hereafter Northeast-Far East) integration since the 1980s. Reconceptualization over two stages during the past decade portrays BRI as the driver of that integration: The years 2012-2016 witnessed efforts by Heilongjiang province to make Northeast-Far East integration the core of Russia’s participation in the BRI; and in 2017-2021, Beijing promoted a Polar Silk Road which went through the Russian Northern Sea Route (NSR). Heilongjiang put Northeast-Far East integration at the center of this Polar Silk Road, conceiving of itself as the logistics hub of this road although it lacked seaports. Russian-Chinese joint construction of the Polar Silk Road in the Arctic led to discussion about creating a maritime partnership. The years 2020-2021 saw efforts at intensifying Northeast-Far East integration while dealing with problems such as center-local relations in both countries and Covid-19’s impact on a cross-border economic downturn.

China’s Northeast State-Building: Ministries and Border Planning

Han Enze has argued that state building in one country can influence the same process in neighboring states in a process that is asymmetrical for most countries on China’s periphery. China has greater resources and a larger capacity for continuously planning and building the state.² The Chinese National Development and Reform Commission (NDRC), the Ministry of Foreign Affairs, and Ministry of Commerce serve as the BRI’s core planning organizations, issuing numerous directives for the border area. The State Council issues directives meant to clarify basic principles of opening up border areas.

Chinese center-local planning appears well coordinated although Heilongjiang is considered to be overly assertive in its approach to the Russian Far East, and at times has been reined in by the Chinese Foreign Ministry. The two Sino-Russian Northeast-Far East integration programs of 2009-2018 and 2018-2024 should be viewed as nested in this continuous border planning process, which includes NDRC planning and Heilongjiang planning. A time-line indicates extensive Chinese effort at state-building and infrastructure building on the Sino-Russian border. Russian planning appears to be parallel planning loosely coordinated with the Chinese plans. Below, all plans listed are Chinese, except where indicated as Russian or Sino-Russian bilateral.

Table 1. Overview of Plans for the Sino-Russian Border

For every Five-Year Plan that the NDRC created for the nation as a whole, there was a corresponding border plan. The large number of directives in the past decade was indicative of a continuous Chinese process of building border infrastructure, and an elevation of local border trade to the level of a national strategy, especially Heilongjiang’s plan. After BRI was announced, Beijing financially incentivized provinces to create local provincial BRI plans that would support the national-level BRI.

Despite extensive central planning for Heilongjiang, the province sought ways to minimize center-local differences. There are three potential mechanisms for exercising provincial influence – trailblazing, carpetbagging, and resisting.³ When Heilongjiang is trailblazing, it is getting out ahead of Beijing, promoting policies toward the Far East, that have local benefits. It lobbies Beijing, as every province has done, and can also present it with a fait accompli. When Heilongjiang is carpetbagging, it is implementing Beijing’s policies in a way that promotes local interests by slipping in local policies under the rubric of central policies. When it is resisting, it is failing to implement Beijing’s policies by shirking and stalling because they hurt local interests. Whatever presidents Putin and Xi agree to, it is modified at the local level. These behaviors occur because the central government is viewed locally as being inefficient at managing border issues.

Encouraged by Heilongjiang, Beijing designated Northeast-Far East integration a priority project of Russia’s participation in the BRI. Chinese views of relations with Russia under the BRI think of it as the latest mechanism to promote Chinese Northeast and Russian Far East regional cooperation, and try once again to link the Revitalization of the Northeast’s Old Industrial Base Strategy with the Russian Far East Development Strategy, an effort of several decades, now focused on jointly building the Polar Silk Road. Chinese hoped that construction of the Northern Sea Route would promote international transportation corridors, Primorye-1 and Primorye-2 high-speed railways, that would connect the Northeast with the Northern Sea Route and facilitate integration of Northeast China and the Russian Far East. Heilongjiang analysts claim this would make Northeast China a transportation hub on the Polar Silk Road.⁴

In June 2017, China and Russia signed a Memorandum of Cooperation for the development of two international transport corridors: “Primorye-1” (Harbin-Mudanjiang-Suifenhe-Pogranichny-Ussuriysk-Vladivostok/Nakhodka) giving Heilongjiang’s exports access to Asia-Pacific markets; and “Primorye-2” (Changchun-Jilin-Hunchun-Zarubino port) to benefit Jilin province and finally give Hunchun access to the Asia-Pacific. Some Chinese analysts thought these projects were key for implementation of Northeast-Far East regional integration.⁵

As BRI progressed, foreign analysts viewed it as Beijing’s geopolitical strategy for a Sinocentric order. Despite the extent of central planning, Beijing instructed all Chinese who wrote on the BRI to describe the drivers of BRI as provincial initiatives. forbidding calling BRI a “strategy.” Beijing required that all BRI topics were top-down delegated to researchers with no independent studies of BRI, no critical inquiry, no domestic criticism allowed on BRI, and no debates on how developing countries can pay back their loans.

The international debate over the nature of BRI, whether it was Beijing’s geopolitical strategy or the result of provincial initiatives, is germane to Heilongjiang’s participation in BRI and efforts to pull the Russian Far East into it. Baogang He emphasized the domestic sources of BRI, intending to counter Western analysts who focus on BRI as a geopolitical strategy.⁶ Min Ye also focused on the domestic sources, arguing that BRI is not simply a “personalistic vision” of an autocratic leader.”⁷ Jones and Zeng have argued that “BRI is an extremely loose, indeterminate scheme, driven primarily by competing domestic interests, particularly state capitalist interests, whose struggle for power and resources are already shaping BRI’s design and implementation.”⁸

After 2012, Beijing developed increasing confidence in its capacity to more actively manage its periphery, using concepts of hierarchy and asymmetrical power relations. Smith argues that the BRI is Beijing’s peripheral strategy meant to build institutions that will integrate neighboring states under its leadership and eventually construct a regional order that respected China’s core interests.⁹ Calabrese argues that China’s BRI-related activities involve a complex, heterogenous mix of national and sub-national actors. Despite BRI being a CCP-driven top-down design, its implementation depends on loose cooperation between provincial governments and central agencies.¹⁰ This need for BRI center-local coordination reproduces all the problems of center-local governance (条-快) that the PRC has encountered for seven decades.

Russian Far East State-Building: Ministries and Organizations

The presence of Chinese border state-building has always influenced border state- building on the Russian side. This was true in the early 1990s when Heilongjiang had approximately 24 border ports well-staffed and equipped while Primorye on the Russian side had minimal staff and equipment to the extent of contracting out border control to local Russian business, mafia groups, and the paramilitary Cossacks. Heilongjiang now claims it has opened 25 first-class ports to Russia, which accounts for 70% of the country’s border ports with Russia, and includes 15 river ports, 4 highway ports, 4 air ports, and 2 railway ports.

The Ministry for the Development of the Russian Far East (Minvostokrazvitiya) was established on May 21, 2012 as a federal body that coordinates state programs in the Russian Far East drawing from a list approved by the central government. Overseeing local governments in their implementation of the center’s programs, it is responsible for attracting foreign investment and is empowered to designate priority development areas available for foreign investment, the Territories of Advanced Development (Territorii operezhayushchego razvitiya). There are now 18 such advanced zones (ASEZ), which should provide infrastructure, preferential tax regimes, and skilled labor.

The Far East Development Corporation manages the advanced zones and the Free Port of Vladivostok. Chinese companies are attracted to these zones due to provision of infrastructure and preferential policies, but the laws governing the zones are reported to be constantly changing creating investor uncertainty. Problems include lack of coordination between different branches of government and the new institutions created to manage the advanced zones. Bureaucracies have proliferated rather than deregulating. A Russian analyst noted that if federal and regional governments could coordinate, the investment climate would improve.¹¹  

The ministry oversees establishment of the Vladivostok Free Port and construction of international transport corridors. The Eastern Economic Forum (EEF), held annually in Vladivostok to attract foreign investment, is managed by the ministry with minimal input from the local community. Ivan Zuenko argues the EEF has become an exhibition of the achievements of the ministry, a report to primarily Putin rather than foreign investors. He further argues the EEF is:

a forum for large-scale federal business with a federal agenda, on which local participants feel as if they are guests. The moderators and speakers in the sessions are practically always Moscow experts, who often have a very sketchy understanding of the realities in the Russian Far East.¹²

According to a 2016, report by the Institute of History, Ethnography, and Archeology on Chinese investment in the Russian Far East, in 2012 the central government began to cut back on domestic financing for development of the Russian Far East, and instead hoped for China’s investment for the region. The Territories of Advanced Development and the Free Port of Vladivostok were created to attract this foreign investment.¹³ The EEF has had an additional purpose of furthering Putin’s geopolitical strategies and emphasizing Russia’s military presence in Northeast Asia. As an investment forum, some foreign analysts assessed it as losing relevance due to a deficit in governance and rule of law, corruption and ever-changing rules for the Russian market.¹⁴ In 2016, Artyom Lukin acknowledged that the Far East was lacking in interagency coordination and necessary infrastructure, although he held out hope for structural reforms.¹⁵

There was further institutionalization in the creation of the Far East Development Corporation, the Far Eastern Development Fund, and the Far East Investment and Export Agency—all responsible for attracting investments—but a boom in foreign investment failed to materialize due to lack of infrastructure and human capital, and bureaucratic inertia. The Russia-China Investment Cooperation Committee was created as a mechanism within the Russia-China Investment Cooperation Forum. In 2021, rather than meet during the EEF, it met in Xiamen on September 8 on the sidelines of the China International Investment and Trade Fair (CIFIT).

The Ministry for the Development of the Russian Far East and Arctic, created in February 2019 to replace the Ministry for Development of the Russian Far East, coordinates implementation of federal programs in the Far Eastern Federal District, including the Arctic to improve the efficiency of developing the Arctic zone. Its head regularly reports to the Kremlin. Alexander Kozlov, the minister from 2018 to 2020, in April 2020 with Deputy Prime Minister and Presidential Plenipotentiary Envoy to the Far Eastern Federal District Yury Trutnev, met with Putin to report on progress building social infrastructure facilities in Buryatia and the Trans-Baikal Territory, which were integrated into the Far Eastern Federal District in 2018. Trutnev reported that 2,283 projects were being implemented in the Far East with government budgetary support. He claimed private investment far exceeded government expenditures and that the industrial growth rate in 2019 was 6%, much higher than in Russia as a whole. Kozlov and Trutnev were working on a draft law for a system of incentives for the Arctic zone.¹⁶

Alexei Chekunkov replaced Kozlov in November 2020, while also chairing the board of directors at the Far East Development Corporation (FEDC). As director and board member of the Russian Direct Investment Fund (RDIF) from 2011-2013, he supervised the inauguration of the joint Russia-China Investment Fund with the China Investment Corporation (CIC). From 2014 to 2020, he was director general of the Far East and Arctic Region Development Fund (VEB.RF), whichArtyom Dovlatov now heads. The two represent the linking of the Arctic with the Russian Far East. According to Dovlatov, “The ongoing reform of the Far East and Arctic development institutions is aimed at creating a single management mechanism, enhancing development efficiency and highlighting the achievement of national goals. VEB.RF will finance our priority projects in the Far East and Arctic.”¹⁷

In October 2020, Putin’s “Strategy for Developing the Russian Arctic Zone and Ensuring National Security through 2035” laid out policies for Artic development, replacing the 2013 Arctic strategy, which had emphasized civil society organizations as partners on environmental issues, with one dominated by energy companies and the military. In February 2021, Prime Minister Mikhail Mishustin approved six major state-supported investment projects in the Arctic region, focusing on Murmansk Oblast, Novaya Zemlya archipelago, and Taymyr Peninsula. Chekunkov noted that private businesses were expected to invest ten times more than the Russian government in these, logical since the Arctic region involves oil, natural gas, and LNG, which attract foreign investment. The federal government would partially compensate (20%) Russian companies for infrastructure-related expenditures in construction of transportation, energy, and electricity in the Arctic—all related to developing the Northern Sea Route.

One observer noted: “Local elites of neighboring regions—less endowed with strategic natural resources and/or less important for the NSR—feel frustrated at being excluded. There was no mention of the Russian Far East in the Arctic investment projects.”¹⁸ Did the creation of a new institution combining the Russian Far East and the Arctic into one ministry shift the priority away from Russian Far East development, or did linking the Far East to the Arctic enhance the Far East’s possibilities for greater foreign investment? Would the Far East indirectly benefit from its proximity to the Northern Sea Route? How would this impact Chinese views of the Far East? Would this change Primorye’s potential identity from Pacific Russia to Arctic Russia? In a 2021 Pavel Minakir stated:

There is a ministry for the development of the region, and it should regularly report that development is taking place…what is “advanced development,” what do we want? Do we want to develop the Vladivostok region? Khabarovsk? So let’s develop them in a targeted manner. So far, it’s not working out very well.¹⁹

His point was that the ministry focused on economic growth, increasing the GDP for the region rather than economic development. The GDP growth was driven by foreign investment in extractive industries and was controlled by large state enterprises Gazprom, Rosneft, Novatech, Sibur, which did not contribute to a more broad-based, diversified development of the Far East. Minakr argued that the “Turn to the East” implied greater federal government investment in the Far East, but in fact, it was not happening. For example, in 2020, the Far East generated 1.2 trillion rubles in tax and non-tax fees. Of that, 300 billion rubles went to the federal budget. 450 billion rubles were returned to the Far East from the federal budget which seems like it invested 150 billion rubles, but this is only 10% of the 1.2 trillion rubles. Benefits of GDP growth accrue to large state enterprises from Moscow. According to Minakir, genuine development would depend on giving the Far East freedom rather than subsidies: “Let the people here develop everything themselves.”²⁰ 

A Chinese analyst would agree with Minakir that the local government lacks authority over the direction of regional development, noting “the Far East policy at the federal level is continuous, stable, clear and sober; however, it squeezes out the space of the local government. This is the problem.”²¹ Chinese analysis finds Russian center-local relations problematic, undermining economic development of the Far East and also bordering Chinese provinces. It is felt that Russian Far East governors are actively advocating for expanding economic and trade relations with China which is already significant. In 2018, China accounted for 83.5% of the total foreign trade of the Amur Region, 52.7% in Primorsky Krai, and 59.6% in Khabarovsk Krai, making China the largest trading partner for each.²²    

Minakir has noted that a majority of Sino-Russian trade and investment is controlled by state corporations and government ministries, and are in the “old” economy of energy, arms trade, and infrastructure construction. This had simplified the decision-making process between Moscow and Beijing, but it had not nurtured cooperation between small and medium-sized firms. Smaller firms have developed the “new” economy such as cross-border e-commerce and tourism. Reducing regulations and providing tax incentives would generate real economic growth in Russo-Chinese cooperation drawing on the capabilities of small and medium-sized firms. Free Trade Zones (FTZ) would give the production of these smaller firms greater access to the Chinese market.²³ 

Xi Jinping has promoted planning and policymaking coordination between countries in the BRI, but for Russia it is not clear that it will closely coordinate despite Sino-Russian parallel planning. Some Chinese analysts claim there is not yet mutually beneficial Northeast-Far East planning cooperation.²⁴ Russian law does not give regional authorities the legal authority or the finances to pursue joint projects with foreign companies. Their proposals must first be approved by Moscow. Chinese investors have successfully negotiated with Far East governors and thought they had agreement only to see the project evaporate because the governor did not have the authority. According to Anatoli Buryi, chairman of the Far Eastern Chamber of Commerce and Industry, this has left Chinese investors frustrated. Moscow has the authority but is reluctant to allow Chinese investment to take a controlling interest in Far East projects. Artyom Lukin reflects ambivalent local sentiment that Russia was different from China’s other BRI partners, and was “not willing to sacrifice its sovereignty in exchange for greater Chinese investment in the Far East.”²⁵ Yet just two years before Lukin had noted that “China’s control over one or two ports in the Far East is unlikely to undermine Russia’s national security.”²⁶

In July 2021, the ministry reported that Chinese investors were funding 58 regional projects worth US$11.6 billion, and that Chinese investment made up 73% of foreign investment. It is more optimistic than some Russian analysts who find a pattern of Russian high expectations of rapid and easily obtained Chinese investments followed by disillusionment when Chinese balk, or the conditions are not favorable enough to overcome a Russian fear of dependency on China or a loss of territory. Russians then conclude “Better to be poor and without the Chinese than to be rich with unavoidable changes that result in Chinese expansion.”²⁷ After the 2021 EEF, there were reported to be 380 agreements signed worth 3.6 trillion rubles with Chinese, Japanese, South Korean, Canadian, and Kazakhstan representatives.

Alexander Sergunin has argued that Arctic Russian sub-national actors have been transformed in the last three decades from passive policy-takers to active policy-makers in both domestic and foreign policy. They have attracted foreign investment, worked with international organizations, and cooperated with foreign counterparts in areas such as education and environmental issues.²⁸ The situation of the Russian Far East challenges Sergunin’s argument.

Heilongjiang’s Role in the Polar Silk Road

To establish Heilongjiang’s Arctic identity, Beiji Village, Heilongjiang, is called China’s Arctic Village, the northern most village in China which is on the Amur River but not within the Arctic Circle. Its houses are wooden Russian style cabins. Villagers hunt and fish. Beiji Village brands itself as integrating Chinese, Russian, and Oroqen people, the Siberian minority that spans the Sino-Russian border. Many people along the border are of mixed ethnicity. There is a Northern Nationality Garden which contains a Russia Garden and an Oroqen Garden, with the Oroqen Museum, Orthodox Church, and the Russian Bar.

Beijing assigned Heilongjiang to the Russian Far East at the beginning of economic reforms during the regional pairing scheme for border provinces when Liaoning was paired with Japan, Jilin was paired with North Korea, and Shandong lobbied to be paired with South Korea. This could undermine the central ministries’ monopoly over foreign trade, but it did not appear problematic until the Xi Jinping era. It was not until October 2013 that the CCP Central Committee convened a Central Work Conference on diplomacy for the periphery, the first work forum to consider peripheral diplomacy. Prior to the forum there were several Politburo study sessions attempting to define China’s diplomatic strategy on the periphery. At the conference, at the same time Xi introduced BRI, he changed the order of the general framework for foreign relations and made the periphery China’s top strategic priority for the first time. Deng Xiaoping in 1979 had put the periphery as secondary to major power relations.  

Beijing analysts debated the wisdom of this shift. In 2015, Yan Xuetong argued for prioritizing periphery diplomacy, which could lead to countries on China’s periphery bandwagoning with Beijing.²⁹ Russia was included in this periphery. This expectation is reflected in Xi Jinping’s statements on BRI countries coordinating their policies with Beijing. China sees the Russian Far East and Siberia as an essential part of the NSR, and views the NSR as a positive factor contributing to Far East development that would lead to infrastructure support for the NSR in the Far East. China views its road to the Arctic as running through the Russian Far East.³⁰

Russia had limited its participation in the BRI although Putin always publicly stated his support for it. At the May 2017 Belt and Road Forum, he changed his position, stating his hope that China would connect the NSR with the BRI and indicating greater involvement in the BRI. Chinese Foreign Minister Wang Yi on May 26, 2017, gave an interview to Russian media indicating Chinese interest in Putin’s proposal to work together with each other and other countries willing to participate in the Polar Silk Road—the first official discussion of Sino-Russian cooperation in the Arctic.³¹

On June 20, 2017, the National Development and Reform Commission and the State Oceanic Administration jointly issued the “One Belt and One Road Maritime Cooperation Plan,” proposing to actively promote the construction of a Blue Economic Corridor connecting with Europe via the Arctic Ocean, incorporating the Arctic into China’s BRI initiative. On July 4, 2017, Xi visited Russia and discussed with Putin joint construction of the Polar Silk Road in the Arctic. On January 26, 2018, the State Council Information Office published the white paper “China’s Arctic Policy,” mentioning the Polar Silk Road and calling China a Near-Arctic country that would participate in Arctic governance. Chinese situated the Polar Silk Road along the Northern Sea Route and spoke of Sino-Russian joint construction of this addition to the BRI. Russians did not accept China’s Near-Arctic status, believing there were only two kinds of states, either Arctic or non-Arctic.³² Chinese called it an extension of China and Russia’s “Belt and Road Alliance,” and expected the Polar Silk Road would have a significant positive effect on the comprehensive revitalization of Heilongjiang. Some even claimed that Heilongjiang is a logistics hub, the “bridgehead,” that forms a three-dimensional transportation network with Harbin as the center and the border ports of Suifenhe, Tongjiang, and Heihe as nodes, which includes railway, highway, aviation, river-sea combined transportation, cargo on ice, and pipelines.³³

Chinese analysts in 2021 reiterate what was said in the 1980s, that Heilongjiang geographically is at the core of the Northeast Asian economic circle that includes Russia, China, the Korean Peninsula, and Japan.³⁴ But this could only become a reality if it integrated with the Russian Far East and developed transport links that gave it access to the Sea of Japan, the Asia-Pacific, and the Northern Sea Route. Provincial hope was placed on the BRI as the latest effort to connect Heilongjiang. The Polar Silk Road would organically integrate Russia’s Far East Development plan with China’s “Revitalize the Northeast Old Industrial Base.”³⁵

Some at the Harbin Engineering University argued that Heilongjiang should become “China’s outpost for the implementation of the national Arctic policy,” hoping they could turn it into a logistics hub for transportation between Northeast Asia, Europe, and North America when China participates in the Arctic Blue Economic Corridor (ABEC). In 2018, the university established the Arctic Blue Economy Research Center in collaboration with Russia’s Northern Arctic Federal University (NarFU) to carry out research on industrial collaboration, trade, investment, finance, and regional economic development between China, Russia, and the Nordic countries. It has become part of the University of the Arctic (UArctic), a cooperative network of universities and research institutes working on Arctic issues. During 2014-2015, Heilongjiang developed its own BRI initiative that would connect with the central government’s BRI. During 2016-2020, it worked on transit networks with Europe. The “Eastern Longjiang River Land and Maritime Silk Road Economic Belt initiative” included networks by rail, air, car, and river that would link seaports of Vladivostok and Nakhodka to Suifenfe and Harbin, then to Manzhouli; Birobidzhan linked to Dalian by rail, and cross-border power transmission. This network basically builds on the China Eastern Railroad and the South Manchurian Railroad built long ago by Russia and Japan. Heilongjiang planned a trans-border transport network through China’s Northeast and Russia linking Northeast Asia and Europe.³⁶

Others recognized that China’s Northeast is not yet connected to the Polar Silk Road due to: high operating costs of the route; poor logistics capacity of related ports; lack of judicial cooperation between China and Russia; and no mutually beneficial development plan between China and Russia. They recognized that the Northeast is geographically close but not connected to the Arctic and therefore needed a strategy for connecting with the Polar Silk Road.³⁷ It would be easier for Liaoning’s ports Dalian and Yingkou than it would be for Harbin or Jilin’s Hunchun. They would have to rely on the strategy of “borrowing ports to go to sea,” i.e., Primorye-1 and Primorye-2 railways.

Sino-Russian Dialogue on the Way Forward in Northeast-Far East Integration

The year 2019 appeared to be a time of critically assessing failures in the Programme of Cooperation Between Russian Far East and Eastern Siberia and Chinese North-Eastern Regions (2009-2018). In 2019, Feng Shaolei, in a talk to the Valdai Discussion Club, acknowledged that China and Russia were exploring a more effective and sustainable pattern of Northeast-Far East border cooperation than had been practiced during 2009-2018. He mentioned debates in China regarding developing the Russian Far East, and he was not optimistic.³⁸

According to Feng, the Russian Far East only attracts 2% of total foreign investment in Russia, leaving it dependent on federal government subsidies, 300 million rubles/year, a burden on the central government. Far East problems include monolithic market structure, heavy reliance on raw materials, low regional budget revenues, weak attraction for foreign investment, increasing dependence on Asian countries, and limited influence on the national economy. Feng thought the Far East is a drag on post-Soviet state-building, and it is holding Russia back from becoming a modern global power. He outlined how China’s view of the Far East has evolved through several stages. The first was a stage of “spontaneous” interaction, mainly focused on border trade and lacking government regulation, producing negative images on both sides. The second stage focused on integrating China’s Northeast Area Revitalization Plan and Russia’s Socioeconomic Development of the Russian Far East and the Baikal Region through a Programme of Cooperation Between Russian Far East and Eastern Siberia and Chinese North-Eastern Regions (2009-2018). This stage had large-scale projects. Russian and Chinese provincial level units submitted their applications for the proposed 208 key projects, seventy of which were for trans-border infrastructure. Twenty involved joint construction by the Chinese and Russian sides. The Chinese side had a 62% success rate in implementing its projects, while the Russian side only had a 28% success rate by 2016. These projects used domestic investment on both sides with minimal cross-border investment, thus undermining the goal of cross-border economic integration.³⁹  

The third stage involved connecting the BRI and the Greater Eurasian Partnership with an agreement signed in May 2015, which had not yet been implemented, to expand investment and trade, implement large-scale investment projects in infrastructure, jointly establish industrial parks and trans-border economic cooperation zones, and strengthen transportation infrastructure. Among the impediments: business communities in China and Russia lacked mutual understanding and trust, and Chinese companies felt they were prohibited from entering the downstream sectors in the Russian energy industry. Feng suggested that Far East development should be in the context of connecting China’s BRI and Russia’s Greater Eurasian Partnership, as China’s proposed Polar Silk Road integrated coastal Far East and Siberia into the strategic coordination framework. Russia should further open the Russian Far East, and change its view of the region, giving up “the phantom concept of the so-called ‘strategic backyard’ in its competition against the West or the ‘strategic frontier’ in the competition with China.”⁴⁰

Victoria Denisenko quoted Feng Shaolei’s speech to the Valdai Discussion Club, echoing his pessimism, and claiming the high point of Russian-Chinese interaction may already be in the past. Feng had complained that the low level of openness of the Russian Far East market is the main deterrent for Chinese entrepreneurs. Denisenko indicated that the same problem persisted for Russian companies in China.⁴¹

China’s 14th Five-Year Plan mentioned raising the level of Harbin’s opening up to Russia as part of the revitalization of the Northeast that would increase prosperity and stability of the border, furthering urbanization in towns and villages along the border and construction of border ports. It promised increasing support for the development of key border areas, providing road access, electricity, postal services, communications, border airports, and radio and television in villages along the border. It also mentioned establishing a negative list management system for cross-border investment. In June 2020, the NDRC and the Chinese Ministry of Commerce announced the “Negative List for Foreign Investment Access in Pilot Free Trade Zones 2020,” which reduced the number of industries in which foreigners could not invest, indicating greater liberalization in the fourth year of FTZ investment liberalization.

Russia’s “National Program for the Development of the Far East by 2035” had forecast that the economy of the Far East would maintain an annual growth rate of nearly 6%. However, the 2017-2019 rate was 3%. Then the Covid-19 pandemic slowed all economic activity. In January 2020, China and Russia closed the border between the two countries, to block the spread of the pandemic, but it was impossible because of numerous informal border openings that led to Chinese illegally fleeing Russia through them. Harbin resorted to bounty hunters to search for Chinese who had crossed illegally and might be Covid-19 carriers. There were huge economic losses in 2020 due to the border closure, the decline in exports and foreign market demand, the reduction in resource extraction, production decline, decrease in enterprise income, and shrinking domestic demand. According to Pavel Minakir, federal annual investment must increase by about 4% to return to previous growth rates. Due to reduced demand, two-thirds of Far Eastern industries had lost income. In the Far East, the first wave of Covid-19 was from April to August 2020 and the second wave began in October 2020, where the infection rate in the Far East was higher than for Russia as a whole, at more than 20 per 10,000 people.⁴² The pandemic shutdown revealed the extent to which the Far East depended on Chinese companies and labor.  

In 2019, Artyom Lukin had noted the serious impediments to Far East development: the Far East could not rapidly develop when the Russian economy as a whole had anemic growth, US sanctions on Russia scared foreign investors from the Far East, minerals and energy exports faced declining demand in Japan and South Korea, and the Russian Far East had not yet built an effective model for cooperation with China. It is this lack of an effective cooperation mechanism that reveals BRI’s limitations.⁴³

When Putin issued the September 2020 National Plan for Social and Economic Development in the Far East by 2024 and Prospects for 2035, Chinese scrutinized it to determine how it would further Northeast-Far East integration and support implementation of the “Program for development of Russian-Chinese cooperation in trade, economic and investment spheres in the Far East of the Russian Federation (2018-2024).” Heilongjiang found many unprecedented opportunities for itself in the 2018-2024 plan to invest in the Russian Far East responding to preferential investment policies and tax incentives in the 18 Territories of Advanced Development and the Free Port of Vladivostok. It planned to concentrate on linking Harbin, Heihe, and Suifenhe Free Trade Zones with some of the 18 territories. Previous practices of importing Chinese labor into the Russian Far East would be replaced with hiring local Russian workers, which would promote local economic development and win the favor of local residents. Harbin would concentrate on the construction of the Primorye-1 railway and other transport infrastructure.⁴⁴

Trade with China accounts for 34% of the Far East’s total foreign trade, and China has become the largest investor and trading partner in the Far East. There were high expectations that joint investment funds would smooth development of various cooperation projects, referring to the Sino-Russian Investment Fund, Sino-Russian Agricultural Investment Fund, Sino-Russian Development Fund, and the Russia-China Regional Cooperation and Development Investment Fund. In December 2020, the seventh meeting of the Russian-Chinese Intergovernmental Investment Cooperation Committee was held as part of the ongoing dialogue on the investment cooperation agenda.⁴⁵ It would appear that both sides are willing to work through these mechanisms to continue to try to create a more successful model of cooperation.

Evolving Maritime Partnership

Russia has resisted involvement in China’s territorial maritime disputes in the East China Sea and South China Sea. The Chinese push for a Sino-Russian maritime partnership was meant to get Moscow aligned with Beijing in these disputes. Russian-Chinese joint construction of the Polar Silk Road in the Arctic eventually became a discussion about a maritime partnership. Primorye’s concept of a Pacific Russia was always a maritime orientation focused on the Asia-Pacific rather than a continental orientation towards China. The Chinese push for a Sino-Russian maritime strategic partnership, evident in the 2012-2013 Senkaku crisis,⁴⁶ was more emphatically stated in 2021. Primorye’s Pacific Russia concept and Beijing’s Sino-Russian maritime partnership seemed compatible.

There were several factors driving an emerging discussion of a Sino-Russian maritime partnership: “Joint Sea” naval exercises since 2012; China”s first official Arctic policy document, the white paper “China’s Arctic Policy,” which mentioned the Polar Silk Road and conflated it with the Northern Sea Route; and the Sino-Russian first joint long-range air patrol that flew over Japanese and South Korean air space, over the Sea of Japan and Dokdo Island, in July 2019. The patrol included two Russian Tu-95 strategic bombers and two Chinese H-6 bombers, a Russian A-50 early warning plane, and a Chinese KJ-2000. Japan and South Korea both scrambled jets to intercept this patrol, with South Korea firing hundreds of warning shots. Both China and Russia denied entering either South Korean or Japanese air space.

Dmitri Trenin promoted shifting the continental land-based Sino-Russian partnership to a maritime partnership, arguing that Moscow’s geopolitical discussions need a maritime dimension, and Greater Eurasia needs a sea connection around it. The melting of the Arctic and the Northern Sea Route should motivate Moscow “to think strategically in terms of the waterways, in large part along Russia’s Arctic and Pacific coasts.”⁴⁷

In August 2021, Zhao Huasheng noted that a Sino-Russian maritime partnership had not yet formed but should be created. Their partnership had been a Eurasian continental partnership even though they both are becoming great oceanic powers. They had jointly conducted military exercises in several oceans—the Pacific, Indian, Atlantic, and Mediterranean—and jointly flown aircraft over the Sea of Japan and Dokdo Island. The idea of maritime partnership has been floated in Sino-Russian academic circles but there was no governmental agreement. Both countries are facing serious security challenges from the sea. China is the main target of the US Indo-Pacific strategy, while Russia feels alienated and negatively impacted by the Indo-Pacific strategy but is not the target. Zhao argued that China and Russia should form a joint response to the US Indo-Pacific strategy.⁴⁸ Given the tentative nature of the Sino-Russian discussion on a maritime partnership, it appears that it is not yet well-institutionalized and still at a stage of floating ideas unofficially.

Conclusion

China and Russia are pursuing state-building on the border between the Chinese Northeast and Russian Far East and are influencing each other, but they are building a very different state. The consequence of different state-building on the border is an asymmetry of state capacity. During the past decade, Beijing has continuously promoted greater state institutionalization in border areas, allocating resources, building infrastructure, and strengthening governance. The Russian side has a strong border presence in the form of border guards but has not been continuously investing in building infrastructure, roads, electricity, communications, and ports on rivers. Each side is engaged in a different kind of stat- building. The Chinese side is building infrastructure that would facilitate populating the border area where Chinese will live, work, and do cross-border trade. The Russian side perceives itself as maintaining a strong state presence along the border with border guards but is not addressing the problem of population decline.

Historically, Cossacks were settled along the Russian Far East border with the expectation they would fiercely guard it. The Amur Cossack Army was created in 1858 and the Ussuri Cossack Army in 1889. Under the Soviet Union, Cossacks were disbanded. In the post-Soviet 1990s, Cossacks were employed as vigilantes by local governments and recruited by the FSB.⁴⁹ Moscow in 2005 passed a law resurrecting the Cossack Army as a paramilitary group that allowed Cossacks to patrol the Russian Far East’s border, seizing illegal immigrants and poachers. The Russian side’s emphasis on security creates jobs for border guards and Cossacks, not economic growth.

Russians argue there is a balance between national security and economic development. Chinese argue Russians have over-emphasized military security and need to put more emphasis on non-traditional security issues such as economic security and population security which they feel Russians are now gradually doing.⁵⁰ Chinese expect to see less government regulatory control in the Russian Far East while Russians such as Victor Larin call for greater regulation and a new regulatory cooperation framework for Russia and China that would include protection of national security.⁵¹

Moscow focuses on the Russian Far East every September during the EEF, and throughout the year the Ministry for the Development of the Russian Far East and Arctic is Moscow’s representative in the region although its attention and resources have shifted to the Arctic. In 2021, Victor Larin, noted that although Moscow is the central player and dominant influence in development of the Russian Far East, it still lacks a clear strategy for the region and does not have sustained interest in it.⁵²

The Chinese goal of Northeast-Far East economic integration has existed for more than three decades. The BRI was expected to be the framework in which this goal would be realized, but that has not yet happened amid parallel planning loosely coordinating Russian plans with Chinese plans. Heilongjiang has been much more active modifying and adapting the center’s policies than localities in the Russian Far East are able to do.

Integration under the BRI has shifted to connecting the Chinese Northeast with the Arctic and the Polar Silk Road through the Russian Far East, which reveals ideas for creating a Sino-Russian maritime strategic partnership, but it has not formed yet. Xi Jinping anticipates that the BRI will progress to the point that member countries align their policies and planning with one another. In practice, this would end up with member countries aligning their domestic and foreign policies with Beijing’s. Smaller countries in the BRI with asymmetric border relations with China will open to Chinese influence and adopt Beijing’s policies.

Russia, however, is more likely to continue to emphasize national security and its own policy preferences despite the existence of asymmetrical state capacities. Russians appear unlikely to heed Feng Shaolei’s call for Russia to further open the Russian Far East, and to give up the Russian notion of the Northeast-Far East border being a “‘strategic frontier’ in the competition with China.”⁵³