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Rens LEE and Artyom LUKIN
The Russian Far East: basic facts
• One third of Russia’s landmass
• 6 mln residents
• A subnational unit whose ties to the rest of the
country can be seen as problematic due to the
region’s remoteness from the nation’s core and its
proximity to populous and economically powerful
countries of the Asia-Pacific.
RFE’s geopolitical importance
 Richly endowed with natural resources (metals, oil,
natural gas, coal, diamonds, timber, fresh water,
marine fish stocks, arable land).
 Strategically situated in the North Pacific, where
several big powers – the US, Russia, China, Japan,
Korea– intersect.
 Controls approaches to the eastern Arctic.
Moscow’s game plan for RFE
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Since around 2007, Moscow has declared the RFE a
national development priority.
APEC summit and the upgrade of infrastructure in
Vladivostok.
Far Eastern Federal University
Oil and gas pipelines, petrochemical plants
Trans-Siberian and BAM main lines expansion
Space launch facility
Etc.
Special governance and fiscal regime for the RFE
 Putin’s point man for the RFE:
deputy PM and presidential
representative Yuri Trutnev
 Ministry for the Far East
Development (reports to
Trutnev)
 Territories of advanced development (“TORs”) with
special fiscal, customs and regulatory regimes
 Vladivostok Free Port Area with visa-free travel
 Tax benefits for large investment projects in RFE
Mixed results
RFE’s economic growth figures are a little better
compared to Russia’s average. But:
•No noticeable increase in private investment, both
Russian and foreign.
•Population continues to shrink.
•Ineffective governance is the main systemic issue.
•Corruption remains a problem.
China and RFE
A Soviet-era monument in Blagoveshchensk: “The Amur land
was, is, and will be, Russian”
Sino-Russian Eurasian Alliance?
 Geopolitical alignment and single geo-economic
space in Eurasia (EEU linking up with SREB)
 Eurasianist discourse is on the rise in China and
Russia
“Eurasian Friendship”
hospital in Suifenhe
(Heilongjiang)
China and RFE
The then PRC’s Vice President Xi Jinping visits Vladivostok in March 2010.
Beijing sets its sights on RFE
 Chinese VP Li Yuanchao
(2014):
“We intend to integrate as one whole the program of the RFE development
and the strategy for rejuvenating of NE China. Thus we will contribute to
the linking up of labor, material and financial resources of the two
regions, making these two regions into a big market with efficient
distribution of resources, capital and technologies, and gradually, in the
future, into a new economic bloc in East Asia…If we are successful in
connecting NE China with the RFE, if we are successful in joining these
points together, we will create a single economic integration zone.”
Sino-Russian projects in RFE
 Power of Siberia gas pipeline (under construction)
 Eastern Siberia-Pacific Ocean pipeline’s spur to China (in
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operation and being expanded)
Udokan copper field (suspended)
Transport corridors from NE China to the Sea of Japan via
Primorsky Krai (under negotiation)
Bridge across Amur (under construction)
Joint investment fund for agriculture (being set up)
Casino resort near Vladivostok (in operation)
Chinese seek to buy RFE’s assets on the cheap and demand parity
or controlling stakes. This is holding up many potential projects.
For how long will the cash-strapped Russia be able to hold out?
Yuan expansion in RFE
China’s financial institutions are expanding apace into Russia and the RFE
China’s strategic rear areas/overland supply routes:
northeastern (Russia), northwestern (C. Asia),
southwestern (Myanmar)
Japan and Korea - counterweights
to China?
The U.S. and the RFE: North Pacific neighbors
Big and Little Diomede Islands in the Bering Strait
Scenarios
1. RFE as China’s “Outer Manchuria.”
2. RFE as a backwater.
3. Fortress RFE.
4. RFE as an area of international
cooperation and integration.
5. Wildcard scenarios – China attempting to
annex tRFE?
Recommendations
1.Determine the peer competitor.
2.Watch China’s behavior toward RFE as
an indicator of its strategic expectations.
3.Ease the sanctions’ effect on RFE.
4.Let the Asians do business with RFE.
Recommendations
5. Encourage improvement in Japan-Russia
relations.
6. Support Trans-Korean projects.
7. Encourage the US Pacific states’ partnerships
with the RFE.
8. Resume inviting Russia to biennial US-led
RIMPAC (the Rim of the Pacific) multilateral
naval exercises.
Recommendations
9. Assist with Russia’s admission into the Asian
Development Bank.
10. Work toward establishment of a Northeast
Asian cooperation and development financial
institution.
11. Form an ad hoc multilateral group to assist in
the RFE development.
Rens LEE and Artyom LUKIN