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China's Subtle Takeover of Russia's Far East

China's Subtle Takeover of Russia's Far East

While China and Russia have hailed their "unlimited partnership" on the world stage, an eastern corner of Russia has increasingly caught Beijing's eye – the border region of Primorsky Krai. This area, ceded to Russia by the Qing dynasty in 1860, has seen a surge of Chinese farmers in recent years, and their growing economic clout is outcompeting local Russian agricultural interests, according to reports from Nikkei, a prominent Japanese newspaper.

The influx of Chinese into this remote but resource-rich region along the two nations' 2,600-mile border is viewed by some as an effort by Beijing to extend its influence and potentially make claims on territory it considers historically Chinese. Last year, the Chinese government issued a decree that the country's maps should include the Chinese names for Vladivostok – the administrative hub of Primorsky Krai – and seven other locations in Russia's Far East.

For Chinese President Xi Jinping, this move aligns with his goal of restoring lands Beijing believes were unfairly taken during periods of past Chinese weakness, part of his vision for the "great rejuvenation of the Chinese nation." Beijing has made similar claims in the South China Sea based on "historical rights," putting it at odds with nations like the Philippines. And China's stated intent to eventually bring self-governed Taiwan under its control shows its willingness to use force to reclaim territories it views as its own.

Much like his counterpart Vladimir Putin's justification for the invasion of Ukraine based on "historical Russian lands," Xi appears to see parts of the Russian Far East as rightfully belonging to China. Putin himself has accused the West of trying to shear off resource-rich Siberian lands from Russia.

The economic and demographic realities of the Russian Far East may be emboldening Beijing. The region has seen a steady population decline since the collapse of the Soviet Union as residents departed for more prosperous areas of Russia. Today just 6 million people inhabit the vast territory, while across the border, China's three northeastern provinces are home to over 100 million. This imbalance has stoked long-standing Russian fears of a Chinese demographic “takeover.”

For Chinese farmers facing economic challenges at home, the open lands of the Russian Far East are an attractive prospect. As the former coal mining boomtown of Hegang in China's northeast has fallen into economic malaise, more of its residents may seek opportunities across the border, according to Nikkei's reporting.

"The concern for a 'Yellow Peril' in the Russian Far East is not new. It has existed for decades, if not centuries, due to the vast imbalance of population on the two sides of the border," said Yun Sun, director of the Stimson Center's China Program, in an interview with Newsweek.

While Sun does not see the issue of sovereignty as being directly in play, she notes that "how to manage the Chinese farmers on the ground will be a thorny issue" for Russian authorities.

There are potential economic benefits for Russia from the Chinese agricultural presence, however. A 2021 study in The American Journal of Economics and Sociology found that in some cases, Chinese farming operations and sales to Chinese-owned businesses boosted incomes for local Russian farmers. But the study also detailed economic pressures like increased competition for land driving up prices, lower wages for Russian farm workers, and impacts on crop yields.

As Russia has become economically isolated due to Western sanctions over the Ukraine invasion, its trade relationship with China has become even more vital, helping to prop up the Russian economy. But this has come at the cost of increasing Russian reliance on China and the yuan, the Chinese currency.

In the first half of 2023, Russia used the yuan to settle a staggering 75% of its trade with China and 25% of transactions with other countries, according to Russia's Economic Ministry. The Russian central bank itself admitted in a March report that it has “no good alternatives to the yuan when it comes to international reserves.”

"Reserve currency is a different matter," cautioned Sun. “You could argue that given their level of bilateral economic activities, it is only natural for Russia to assume more renminbi (yuan) in their foreign reserves. But we also know that has many practical difficulties—China's capital controls, the lack of full yuan convertibility, and Beijing's manipulation of the exchange rate.”

"So if Russia had other options, the renminbi is not the most appealing reserve currency," Sun stated.

Russia's deepening financial ties to China leave Putin in a precarious position as the decidedly junior partner should any economic or political disputes emerge between the two nations. Moscow is increasingly exposed to the economic challenges facing Beijing and the potential for third-party pressures, like when Russian companies in China faced payment disruptions due to U.S. secondary sanctions targeting banks that transfer banned goods to Russia.

While Putin and Xi have forged a united front against Western liberal democracy, Russia's over-reliance on Beijing's economic largesse gives China leverage that could see parts of the Russian Far East slowly pulled into its orbit – a subtle but steady drift of geography and demography that could one day present Moscow with stark choices over territories it currently claims as its own.

Sayed Hasan Al Manzur
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Sayed Hasan Al Manzur

Editor-In-Chief

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