Far East a foun­tain of op­por­tu­ni­ties

China Daily (Hong Kong) - - COMMENT - Wang Xiaowei The au­thor is a pro­fes­sor at Lomonosov Moscow State Univer­sity.

Rus­sia has long made the de­vel­op­ment of the Far East a pri­or­ity and ini­ti­ated the East­ern Eco­nomic Fo­rum to pro­mote eco­nomic de­vel­op­ment and in­ter­na­tional co­op­er­a­tion in the vast re­gion. The participation of the heads of state and gov­ern­ment of China, the Repub­lic of Korea, Mon­go­lia and Ja­pan in the fourth East­ern Eco­nomic Fo­rum in Vladi­vos­tok, Rus­sia, ear­lier this month has given the an­nual event added sig­nif­i­cance.

Var­i­ous fac­tors have prompted Rus­sian Pres­i­dent Vladimir Putin to hold this high-pro­file fo­rum. Thanks to the abun­dant re­sources and vast ex­panse of land, the Far East has lots of po­ten­tial which the eco­nomic pow­er­houses of China, Ja­pan and the ROK can tap and ease the head­winds Rus­sia’s econ­omy is en­coun­ter­ing.

The Western economies’ sanc­tions have forced Rus­sia to look East with much greater re­solve to strengthen re­la­tions with China, Ja­pan and the ROK, so as to at­tract more coun­tries to de­velop the Far East. Through the fo­rum, the Fast East has at­tracted more and more in­vest­ment, which crossed $40 bil­lion last year, and could in­crease fur­ther this year.

In Sino-Rus­sian co­op­er­a­tion, the com­ple­men­tary traits of the two economies will greatly help them re­sist and re­duce the ad­verse im­pacts of the Sino-US trade fric­tion on China and Western sanc­tions on Rus­sia.

Huge boon to co­op­er­a­tion

That Pres­i­dent Xi Jin­ping at­tended the fo­rum demon­strates the im­por­tance China at­taches to the de­vel­op­ment of the Far East and eco­nomic co­op­er­a­tion with Rus­sia. China is the largest trad­ing part­ner of and top source of for­eign direct in­vest­ment for the re­gion.

To a large ex­tent, Xi’s participation in the fo­rum will help change the phe­nom­e­non of “po­lit­i­cal close­ness but eco­nomic aloof­ness” in Sino-Rus­sian re­la­tions. Look­ing ahead, closer co­op­er­a­tion among local gov­ern­ments and small and medium-sized en­ter­prises will help the two coun­tries un­lock the po­ten­tial eco­nomic co­op­er­a­tion holds.

Also Xi’s participation in the fo­rum will prompt Rus­sia to pay more at­ten­tion to the lack of ad­e­quate le­gal in­sti­tu­tions and en­force­ment in the Far East. Fu­ture co­op­er­a­tion on en­vi­ron­men­tal pro­tec­tion, whose im­por­tance Putin em­pha­sized in his speech at the fo­rum, is sig­nif­i­cant for not only China and Rus­sia, but also other coun­tries.

China ac­counts for 80 per­cent of the FDI in Rus­sia’s Far East, which will cer­tainly in­crease in the fu­ture. Apart from the tra­di­tional in­dus­try of en­ergy, Bei­jing and Moscow will ac­cord pri­or­ity to co­op­er­a­tion on ter­tiary in­dus­tries as China’s strength in the field can help Rus­sia to de­velop its rel­a­tively lag­gard ter­tiary sec­tor. China’s e-com­merce plat­forms are ex­pected to play to their ad­van­tage in the Far East. And as an in­fra­struc­ture con­struc­tion gi­ant, China could greatly help pro­mote Rus­sia’s in­fra­struc­ture de­vel­op­ment while Rus­sia’s low-cost elec­tric­ity can help China fuel its de­vel­op­ment in the bor­der re­gion.

Be­sides, China’s pool of la­bor can com­ple­ment Rus­sia’s lack of work­force, and their eco­nomic co­op­er­a­tion in the Far East could make the re­gion’s eco­nomic growth out­strip Rus­sia’s over­all growth in the fu­ture, cre­at­ing more op­por­tu­ni­ties for China in en­ergy, ca­pac­ity and tech­no­log­i­cal co­op­er­a­tion.

Need to avoid risks

Among Chi­nese en­ter­prises’ in­creas­ing in­vest­ment in Rus­sia of late, plenty of suc­cess­ful ex­am­ples have emerged, al­though in­vest­ment risks re­main a mat­ter of con­cern for the in­vestors. There­fore, Chi­nese in­vestors and en­trepreneurs eager to set foot in the Far East must pay at­ten­tion to risk preven­tion.

First, they should give pri­or­ity to the long-term pro­grams that are mu­tu­ally ben­e­fi­cial and com­ple­men­tary, such as ex­ploita­tion of Rus­sia’s min­eral and for­est re­sources, and in-depth co­op­er­a­tion on veg­eta­bles, fruits and other food prod­ucts.

Sec­ond, in­vestors should fully ac­quaint them­selves with Rus­sia’s laws and reg­u­la­tions and learn about Rus­sian’s na­tional char­ac­ter­is­tics and local cus­toms and prac­tices.

And third, Chi­nese en­ter­prises should con­sider form­ing joint ven­tures with or in­vest­ing in rep­re­sen­ta­tive Rus­sian com­pa­nies to mit­i­gate risks.

As per­ma­nent mem­bers of the United Na­tions Se­cu­rity Coun­cil and strong pro­po­nents of a mul­ti­po­lar world, China and Rus­sia have seen bi­lat­eral ties reach an all-time high. With the United States re­sort­ing to uni­lat­er­al­ism and trade pro­tec­tion­ism, the world or­der faces pro­found chal­lenges.

Against this back­ground, deeper Sino-Rus­sian co­op­er­a­tion in the Far East in both eco­nomic de­vel­op­ment and se­cu­rity and mil­i­tary ex­changes will help bet­ter pro­mote peace and de­vel­op­ment in North­east­ern Asia.

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