The third meeting of the Intergovernmental Commission for Cooperation of Northeast China and the Far East and Baikal Region of Russia will be virtually held today.
Between 2009 and 2018, China and Russia engaged in a cooperative agreement to economically invigorate Russia’s Far East region and China’s Heilongjiang province. This agreement produced several infrastructural links between the two countries, including a bridge over the Amur River, but did not fund many of the over 200 projects initially planned. As a result, the two countries implemented a new program in 2018 focused solely on developing Russia’s Far East.
The development of the Russian Far East, the country’s largest region but the smallest contributor to its GDP, has been a priority for Russia, especially since the imposition of US sanctions in 2014 (in response to Russia’s seizure of Crimea). In 2018, China accounted for 15.5% of Russia’s total trade and was its second largest trading partner. However, Russia only accounted for 0.8% of China’s trade. In addition, the Russian Far East received 2% of China’s FDI in Russia in 2017.
Expect Chinese investment and influence in the Russian Far East to increase as Russia’s need for new sources of FDI leads to its subsidising of Chinese investment. Russia will hope to use Chinese labour, technology and investment to build infrastructure in the remote region, while China can expect to benefit from an influx of cheap natural resources.
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Dane is a managing editor and senior analyst on the Current Developments team. He specialises in geopolitics and development in Latin America and the Caribbean, focusing particularly on Central America.