The Russian Far East: A new arena for Great Power Contests in the Asia-Pacific

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The Russian Far East A new arena for Great
Power Contests in the Asia-Pacific
Rens LEE and Artyom LUKIN
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The Russian Far East basic facts

• One third of Russias landmass
• 6 mln residents
• A subnational unit whose ties to the rest of the
  country can be seen as problematic due to the
  regions remoteness from the nations core and
  its proximity to populous and economically
  powerful countries of the Asia-Pacific.

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RFEs 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.

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Moscows game plan for RFE

• 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.

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Special governance and fiscal regime for the RFE

• Putins 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
  

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Mixed results

• RFEs economic growth figures are a little better
  compared to Russias 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.

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China and RFE
A Soviet-era monument in Blagoveshchensk The
Amur land was, is, and will be, Russian
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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)

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China and RFE
The then PRCs Vice President Xi Jinping visits
Vladivostok in March 2010.
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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 AsiaIf 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.

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Sino-Russian projects in RFE

• Power of Siberia gas pipeline (under
  construction)
• Eastern Siberia-Pacific Ocean pipelines spur to
  China (in 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 RFEs 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?

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Yuan expansion in RFE
Chinas financial institutions are expanding
apace into Russia and the RFE
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Chinas strategic rear areas/overland supply
routes northeastern (Russia), northwestern (C.
Asia), southwestern (Myanmar)
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Japan and Korea - counterweights to China?
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The U.S. and the RFE North Pacific neighbors
Big and Little Diomede Islands in the Bering
Strait
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Scenarios

1. RFE as Chinas 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?

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Recommendations

1. Determine the peer competitor.
2. Watch Chinas 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.

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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.
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Recommendations
9. Assist with Russias 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.
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The Russian Far East A new arena for Great
Power Contests in the Asia-Pacific
Rens LEE and Artyom LUKIN