This new cooperation agreement underscores the Argun River Basin’s importance in overall Sino-Russian Strategic Cooperation, as many joint projects are located in this watershed. Many of these are old projects that have been on the drawing board for decades. It seems that border territories submitted these on-going plans to national agencies negotiating the agreement without having done any kind of impact analysis. The agreement contains troubling elements: Sino-Russian Cooperation provides very little by way of social and environmental safety programs that would be needed to counterbalance the exchange of natural resources across the border.
Russia will send the raw material base of the Far East and Eastern Siberia to China. The Agreement on Cooperation through 2018 calls for joint efforts to tap Russian deposits, but the processing and manufacturing enterprises will be built on in China, writes Russian newspaper Vedomosti on October 12, 2009.
During a September 23, 2009 meeting in New York, President Dmitry Medvedev and President Hu Jintao signed the 2009-2018 Eastern Russia and Northeast China Cooperation Program (the document is available in Russian HERE). The document includes 205 key joint projects in the countries’ border territories, reports RIA Novosti.
Almost all the Russia-based projects involve extracting raw materials from eastern Siberian and the Far East, including coal, iron ore, precious metals, apatite, and molybdenum. China will expand its tin, lead, furniture, fire-proof door, copper sheet, and brick production in its northeast region.
Many of the program’s key projects are located in the Argun River basin: improvement of several border-crossings from Manzhouli-Zabaikalsk to Shiwei-Olochi, development of the Berezovskoye iron ore deposit, plus five more large mining leases along the border river in Russia, a railroad from new mines to the border crossings, new lumber-processing facilities in Zabaikalsk and Manzhouli, etc. The program contains a small section on environmental cooperation that mentions the 2006 Agreement on Argun River Conservation, which thus far has not been implemented due to the Inner Mongolia regional government’s unwillingness to comply. The program also calls for transboundary environmental education exchanges and development of joint tours on transboundary rivers.
«Russo-Chinese cooperation in the next 10 years will based on the principle of ‘our raw materials — your technology’,»notes director of the Center for Strategic Studies of China Professor Alexey Maslov. «It’s not necessarily the case the there is no technology in Russia — the technologies are just several times cheaper to implement in China than in the Far East, a poorly mastered area, where high-tech industry is difficult and inefficient to operate.
«Eastern Siberia and the Far East can only be developed through investments in energy and mining,» states Higher School of Economics Scientific Director Yevgeny Yasin. He believes it makes little sense to operate labor-intensive production facilities here — there are simply not enough workers. The region in home to 3.5-4 million people, including women, children and the elderly; it would prove extremely difficult to find the 500-600 thousand people of working age needed to feed the region working at Russia-based oil refineries.
«Raw materials extraction and development requires significant investment. Neither of us can cope there alone, so Chinese involvement is quite necessary,» says Institute for Economy in Transition Executive Director Sergei Prikhodko. » He went on to warn that relying on the Chinese labor force means Russia will have to be careful and implement reasonable restrictions to protect Russian interests.
The Chinese are willing to compensate for the lack of hands. This topic was discussed at a two-day forum organized by the ruling parties of Russia and China, United Russia and the Communist Party of China. China agreed to a Russian proposal to build jointly owned woodworking factories on its territory with the caveat that a Chinese labor force operate the facilities. China has offered to create special customs corridors for this purpose and facilitate annual visa acquisition. Chinese workers will be able to return home to China. They are proposing a similar scheme for the agricultural sector: Russia and China seek to grow grain crops in the border region.
The trend is evident: Russia is becoming a raw materials dealer for China. The Russian Federal Customs Service estimates that by July 2009, trade between Russia and China had reached $19.5 billion, more than half of which came from commodities (56.4%), while machinery, equipment, and vehicle trade contributed a mere 4.4%. Russia and China have shown completely opposite results in the second quarter of 2009: China’s GDP grew by 7.9%, while Russia’s fell by 10.9%. There can be no question of parity in such a situation. The new cooperation program simply shows already established trends.
There is much analysis yet to be done on the new Cooperation Program to determine which Sino-Russian plans, projects, and agreements were not included in the list and what that means for their successful implementation.