to sino- russian

17 EXECUTIVE SUMMARY
The quality of the economic, environmental, and social
aspects of the Russian regional development programs
is far lower than those of the border areas of Northeastern
China. For example, the 2009—2018 Program does
not have a systematic and integrated marketing component,
which makes it impossible to evaluate its economic
and social effectiveness. The infrastructural
“modernization” envisioned by the 2009—2018 Program
is aimed at improving the transportation of Russian
raw materials to certain Chinese provinces, their
subsequent re-export to Russian regions (following processing),
as well as at improving Russian tourists’ access
to Chinese recreational sites. The Russian development
programs excessively focus on Chinese clients and partners,
whereas experts argue that the most effective cooperation
is based solely on healthy competition between
companies of many different countries.
The current long-term development program of Northeastern
China (which borders the Russian Far East) is
based upon the obvious advantageous aspects of the
region with respect to already existing opportunities,
including the production of “green” agricultural products,
the development of ecotourism and cross-border
tourism, processing of wood and non-timber forest
products, as well as manufacturing of machinery. Unfortunately,
these aspects are insufficiently considered and
almost neglected in the RFE development plans.
Part 2: Environmental Costs of
Industrial Cooperation between Russia
and China
The extractive mineral resources sector in the Russian
Far East is a key economic sector in Russia. It is also an
important part of the RFE regional economy and is
also expected to play a key role in Russia’s efforts to
intensify its international cooperation. There are two
possible scenarios with respect to the development of the
Russian-Chinese region’s mineral resources extractive
industry: “resource-transit” development and “innovation”
development. Currently, the developments within
this industry in the Russian Far East follow the resourcetransit
scenario. This scenario poses threats to the Russian
economy as it results in a loss of control over the supply
of strategic mineral resources to Russian industry;
the weakening of the RFE as Russia’s outpost region in
the Asia-Pacific Region; it also limits Russia’s opportunities
to export to economically attractive and environmentally
sensitive markets, such as Japan, the West
coast of the USA and Canada, South Korea, Singapore,
and Hong Kong.
Analysis of the FEBR Strategy with regard to the oil and
gas sector shows that the strategy is focused on existing
and planned projects of the largest Russian state-controlled
companies, including Gazprom, Rosneft, and
Transneft. It is clear that in implementing those projects,
priority will inevitably be given to the corporate
interests of these players (interests of which will not
always coincide with national priorities), while regional
needs will be given secondary consideration. This manner
of implementation has been demonstrated, in particular,
by numerous facts and decisions associated with
the optimization of the Eastern Siberia–Pacific Ocean
(‘ESPO’) oil pipeline routes, and by actions which
deliberately ignored the objective interests of the economic
development and environmental concerns of
regions such as the Sakha (Yakutia) Republic and the
Khabarovsk Kray.
Many problems derive from the low purchasing prices
of electricity offered by Chinese companies, which are
inconsistent with high Russian export tariffs relating to
electricity (high cost of electricity plus added tax), as
well as from the long transmission distances associated
with high levels in loss of energy. This, in particular, puts
in question the profitability and viability of Russian
electricity plants and the recovery of investments into
the transmission lines. It causes anti-competitive circumstances,
so leading to use of alternative more environmentally
harmful energy sources and, so, to environmental
detriment. However, incentives should be
provided in order to green industry, rather than to incentivize
all manufacturers for competitiveness’ sake only.
In this respect, the sale of power to China from CJSC
Integrated Energy Systems of Siberia and from other
companies based in Eastern Russia at a price lower than
that which exists in Russia is unacceptable.
Most points of growth in the border areas of the Russian
Far East are associated with Chinese capital invested
in the RFE, Chinese companies’ operations, involvement
of a foreign workforce and, in many cases, export
to China of products, for which there is no local