FX.co ★ China’s encroachment into Russia’s Far East increasing

Amid increasing stand-off with the West, Russia is making progress on “strategic partnership” with its eastern neighbor, China. Despite geopolitical tensions, the China Development Bank has confirmed its plans to invest $5 billion in Russia’s Far East. The Chinese government has not disclosed yet how and above all why it is going to develop this Russian region. However, the key issues have been settled at the top-level talks. A few days ago, the meeting of Far East Development Minister Alexander Galushka and President of the China Development Bank Zheng Zhijie resulted in acknowledgement of this costly investment project by both sides. Russia’s Far East Development Ministry posted a communique on its official website with the wrap-up of the talks saying, “In the course of the talks, the parties agreed the following directions of the investment cooperation such as determination of the priority development area in the Far East, funding of the infrastructure development, and implementation of long-term investment projects in Russia’s Far East.” Importantly, China’s authorities have been conducting “quiet expansion” on border territories. So, China’s state borders have been already adjusted for its benefit more than once. The Chinese authorities pursue their goals by giving credits and allocating money for large-scale infrastructure projects. As for the Far Eastern project, investments will be channeled to Russia’s regional economic zones. Meanwhile, Russia’s Economic Development Ministry and the China Development Bank’s management signed the cooperation accord in August 2013. It says that sea ports, railways, airports, bridges, motor ways, and other infrastructure objects will be built in the Far East. Emphasis is placed on investments in travel business, telecommunications technologies, and agriculture.