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    Central Asia
     May 27, 2006
The Chinese are coming ... to Russia
By Bertil Lintner

BLAGOVESHCHENSK, KHABAROVSK and VLADIVOSTOK - The Chinese are coming! They are invading the Far East! If headlines in the new and free - but often sensational and irresponsible - Russian press are to be believed, a massive influx of Chinese into Siberia and the Russian Far East is turning the area "yellow" and Russia is about to lose its easternmost provinces.

But in cities such as Vladivostok, Khabarovsk and Blagoveshchensk the Chinese are not very much in evidence. They are there, but seldom seen outside their hotels and restaurants - and the region's ubiquitous casinos and Chinese markets. It is true, however, that Chinese merchants now

dominate the region's trade and commerce. Economically, the Russian Far East is becoming separated from European Russia.

Before the Soviet Union disintegrated in 1991, the Far East supplied European Russia and the other western republics with fish and crabs from the Sea of Okhotsk. The area's heavy industry produced steel, aircraft and even ships, and few foreign consumer goods were for sale.

Today, Chinese consumer goods - which are cheaper and better than those produced far away in European Russia - and even food are flooding the markets, while timber and raw materials are going south. Entire factories are being dismantled and sold as scrap metal to China. And the seafood is almost exclusively sold to South Korea and Japan.

In the long run this could also lead to demographic changes. There is a floating population of tens of thousands Chinese traders and seasonal workers who move back and forth across the border, and one day they may want to stay.

Russia's Far Eastern Federal District - a huge area covering 6,215,900 square kilometers - has only 7 million inhabitants, and that is down from 9 million in 1991. The population is declining rapidly as factories are closing down and military installations have been withdrawn.

Across the border, China's three northeastern provinces - Heilongjiang, Jilin and Liaoning - are home to 100 million people, and the area has even by Chinese standards an unusually high unemployment rate. Or, as one Western analyst put it: "If the Russians continue to move out, the Chinese are ready to fill the resultant population vacuum in the area." And that could lead to more than just a change of the demographic balance in what still is the Russian Far East.

Officially, 40,000 Chinese live more or less permanently in the Russian Far East - which stretches from the Lena River basin to the Bering Sea - but the actual figure is believed to be much higher. The largest concentrations are in the three main cities in the area, and their economic dominance is the strongest in Blagoveshchensk, the economy of which is less developed and diversified than those of Khabarovsk and Vladivostok.

Blagoveshchensk is also on the banks of the Amur River - with the Chinese city of Heihe on the other side. Hydrofoils full of Chinese traders bringing in goods ply between the two cities every 30 minutes. There are some Russian merchants too - but they are also carrying household utensils, shoes and tools from China.

And it is not only the trade in consumer goods that is in the hands of the Chinese. The construction sector in Blagoveshchensk is dominated by a Chinese-owned company, Hua Fu, which has just began working on what will be the tallest building in the Russian Far East. Chinese New Year is not an official holiday, but it is celebrated in style with fireworks, drums and lion dances.

Even the mayor of the city and the governor of the area, Amursky oblast, usually participate as guests of honor. Amursky oblast may also be the most vulnerable for what many Russians call a "creeping occupation" by the Chinese. It is huge - 363,700 square kilometers, the same area as Japan - but with a population of only 900,000. More than 35 million live in Heilongjiang across the Amur River.

Local Russians say the land is not suitable for farming, the weather being too cold most of the year, but the Chinese who have settled there have managed to cultivate the land. According to Lyudmila Erokhina, a researcher at Vladivostok State University, Chinese businessmen have bribed local officials to acquire land from Russian farmers, and then brought in agricultural workers from China to till the fields. A major problem, she says, is that Russia has no law that regulates private ownership of land. All land still belong to the state, and individual farmers can only get the right to use it.

But more food - vegetables, fruit, pork and even eggs - are brought in from China, which has led to serious concerns about food security in the Russian Far East. "The Chinese now dominate the agricultural sector and food supplies," said Erokhina. "We are totally dependent on them."

And as much as 80% of all goods - consumer goods as well as food - are smuggled in, with no taxes or duties paid to local or central coffers. Most of the timber that is exported to China - millions of cubic meters every year - leaves the country unrecorded as well.

The government is also losing billions of rubles every year in unpaid taxes by the fishing fleets in the Sea of Okhotsk - but that, local researchers say - is mainly the fault of the government. If a fishing boat unloads its catch in a Russian port, the owner has to pay 20% in value-added tax if it is sold locally, and a 5-7% export tax if it is meant for markets in other countries. Taxes and tariffs and much lower in South Korea and Japan. So the companies fish in Russian waters, sell their catch in Busan or Niigata - and deposit the proceeds from the sales in Japanese and South Korean banks.

According to researchers at the Center for the Study of Organized Crime in Vladivostok, an estimated 15,000-17,000 tons of seafood worth US$83 million is exported every year to South Korea and Japan, and 70% of it goes to foreign ports illegally. The owner of one of the biggest fishing fleets is Sergei Darkin - the 43-year-old governor of the Primoriye krai, the region around Vladivostok - which underlines the dimensions of the problem Moscow has to deal with it its "Wild East".

Seafood smuggling may not be directly connected with Chinese economic expansion into the area, but it reflects the close ties that the Russian Far East now has with the Asia-Pacific region - and how much it has become separated from European Russia. The crews on the ships are usually a mix of Russians, Koreans, Chinese, and even Thais and Filipinos.

But the question still remains: Why are there so few Chinese, or other Asian faces, in the streets of Vladivostok, Khabarovsk and Blagoveshchensk?

Speaking on condition of anonymity, a Russian immigration officer specializing in illegal migration from China explained that most of them live in secluded communities and seldom venture out, perhaps out of fear of being victimized by xenophobic youth gangs, which are not as many and not as violent in the Far East as in, for instance, Moscow, but still exist.

Chinese workers live in dormitories inside factory compounds, where the only Russians are the guards. Agricultural workers also live on the farms, which are often surrounded by walls and fences. And once their contracts are up, most of them return to China with the money they have saved.

But that is changing, as Vilya Gelbras, a professor at Moscow State University and a China specialist, pointed out at a seminar in Blagoveshchensk last year: "Now every second Chinese arrives in Russia with a firm intention not to go back to China. Most of them cannot be classified as 'free migrants' anymore." Many acquire false documents, even citizenship, from corrupt local officials who are more willing to accept bribes from Chinese and other foreigners than from their own people.

There may not be more than 40,000, or perhaps 50,000, Chinese living in the Russian Far East. But that is 40,000 or 50,000 more than in 1991. And as the Russian exodus continues, the Chinese may, as one researcher put it, "move into an empty Siberia resulting in its detachment and reorientation towards Beijing".

It may not be happening in the way the tabloid press is saying, but Chinese expansion is a fact of life in the Russian Far East, and there is little Russia can do to stop it.

Bertil Lintner is a former correspondent with the Far Eastern Economic Review and the author of Great Leader, Dear Leader: Demystifying North Korea under the Kim Clan. He is currently a writer with Asia-Pacific Media Services.

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