Those who have remained aren’t exactly the best and the brightest. “The Russian labor force in the Far East of the country is highly marginalized,” explains Natalia Zubarevich, director of regional programs of the Independent Institute for Social Policy. “Those people are presumably alcoholics who do not have high working skills. Moreover, this force is very expensive against the background of the Chinese.” 22In other words, Russia has lost the comparative labor advantage to China on its southeastern flank.
Finally, China is winning the investment battle. The resource-rich Russian Far East has become a hub for Chinese commerce—a freewheeling marketplace where China’s hungry entrepreneurs are pressing their luck. In recent years, savvy Chinese investors have succeeded in setting up special economic zones in places such as the Amur Region, the Jewish Autonomous Region, Primorye, and Khabarovsk. 23Investment dollars have followed; in 2011, Chinese speculators poured $3 billion into projects in Russia’s Far East—more than three times the amount of money allocated by Moscow. 24
While much of the Chinese migration to Russia’s Far East is legitimate, some of it is undoubtedly happening illegally. Today, there is a consensus among Russian officials that many Chinese nationals live in Russia. Where they disagree is on how many there actually are—and whether their presence is a threat to Russian security.
In response to the influx of Chinese in the Far East, Russia has attempted to curb—or at least control—the movement of Chinese nationals into its territory. It has done so by shortening the number of days allotted on work visas for Chinese visitors; requiring official sponsors for these individuals in both Russia and China; and increasing official searches for illegal Chinese migrants. 25
Russia has also instituted protectionist policies aimed at limiting the ability of Chinese workers to settle and prosper within the Russian Federation. In September 2012, for example, Russia’s Amur Region followed in the footsteps of cities such as Krasnoyarsk, Chelyabinsk, and Nizhny Novgorod and banned Chinese migrant farmers from cultivating land there in the future. 26
But the trend line appears relentless. The demographics of the Russian Far East are slowly changing. And, despite the various exclusionary efforts of Russia’s regional governments, they are changing in China’s favor. As a 2006 study of the subject in the Asia Timesput it, “Chinese expansion is [now] a fact of life in the Russian Far East, and there is little Russia can do to stop it.” 27
HIGH STAKES
The transformation now underway in the Far East could help determine Russia’s economic well-being—and its aspirations on the world stage. In recent years, the ongoing economic crisis in Europe, as well as Russia’s growing political tensions with Eurozone countries, has prompted the Kremlin to look east for new markets to aid its domestic modernization, secure new economic opportunities, and help restore its status as a great power. 28
By necessity, Russia’s resource-rich Far East looms large in this calculus. The region has been likened to an “energy superpower”—an area with vast, and as yet largely untapped, hydrocarbon wealth. Indeed, the island of Sakhalin alone is estimated to have deposits totaling fourteen billion barrels of oil and 2.7 trillion cubic meters of natural gas. 29Other resources, from softwood lumber to natural gas and precious metals, are also abundant. Yet although Sakhalin and other parts of Russia’s east have become a magnet for foreign—including Western—investment, the endemic culture of corruption that permeates virtually every aspect of post-Soviet society in Russia has deterred more conservative investors and slowed economic development.
The Kremlin understands this. President Putin has declared publicly that the modernization of the Far East—and, by extension, a closer linkage with Russia’s “federal center”—represents the “most important geopolitical task” facing Russia. 30His government has matched its words with economic investments. Over the past decade, the Russian government has made a concerted effort to invest in the Far East. In 2007, it launched a “Federal Targeted Program” for the Far East and Trans-Baikal regions, earmarking $22 billion for their development. 31Two years later, it went even further, implementing a new strategy that envisioned a three-stage process of development that would dramatically increase regional economic productivity by 2025. 32
But despite these steps, real, broad-based development of the Far East remains mostly a dream for a simple reason. For all the lofty rhetoric, Russia’s plans depend heavily on corresponding investments in the area from neighboring Asian nations. 33And so far, none have economically engaged Russia’s east. None, that is, except China.
COOPERATION NOW . . .
The conflict over the Far East is not yet at the forefront of relations between Moscow and Beijing. For the moment, improving bilateral diplomatic, economic, and military cooperation remains a cardinal priority for both countries.
These ties are driven in part by fears of Western encroachment. Back in 1997, Alexei Arbatov, then chairman of the Military Commission of the Duma, Russia’s lower house of parliament, expressed this concern explicitly. If the United States and its allies used NATO to continue to press in on Russia from the west, Arbatov warned, Russia, too, would have to look east—to new partners in Asia. 34And look east Moscow did. In 1997, Russian president Boris Yeltsin and Chinese premier Jiang Zemin issued a joint communiqué emphasizing the need for “multipolarity” in global affairs—a thinly veiled reference to joint opposition to America’s perceived post–Cold War hegemony.
Since then, the Sino-Russian partnership has expanded significantly. For example, Russia has pledged to side with the PRC in the event of a conflict over Taiwan—one of China’s primary national security priorities. In the summer of 2000, President Putin told President Jiang that the Russian Pacific Fleet stood ready to “block the path of U.S. naval vessels heading to Taiwan” if war ever broke out between the island nation and Mainland China. 35
Moscow backed up its support with concrete strategic assistance. In 2004, the United States–China Economic and Security Review Commission and the Pentagon both reported that Russia had sold China sophisticated weaponry as part of the latter’s preparations for a conflict in the Taiwan Strait. 36The following year, China and Russia launched their first ever joint military exercises in the Yellow Sea, staging a mock invasion of a third country in a not-so-subtle simulation of a takeover of Taiwan. 37Russia has also supported China in opposing Taiwan diplomatically. When then Taiwanese president Chen Shui-bian called a referendum over the island nation’s bid to join the United Nations, Russia equated the move with “dangerous splittism.” Owing at least in part to Moscow’s opposition, the UN ultimately rejected Taiwan’s effort. 38
Russia and China have also banded together to erect an anti-Western partnership in Central Asia. In 2003, the two countries jointly launched the Shanghai Cooperation Organization (SCO)—a six-member bloc incorporating the Central Asian states and designed at least in part to serve as a counterweight to NATO and the United States in the post-Soviet space. While the immediate goals of the bloc are to strengthen counterterrorism and military coordination among member states, the geopolitical objectives are clear. The SCO, China’s official People’ s Dailyhas explained, gives member states “the ability and responsibility to safeguard the security of the Central Asian region”—and to demand “Western countries to leave Central Asia.” 39