SUIFENHE, China — Two hundred meters into the People’s Republic of China are a pyramid-shaped archway and mirror-windowed shopping complex where Russian tourists can make last-minute purchases on their way home.
On a quiet Saturday, Chinese sightseers stroll to the fence and gaze across no man’s land into Russia. The road they walk on is broad and paved. It turns to dirt when it crosses into Russia, as if entering a Third World country. There is nothing in particular to see. The hillsides are wooded. The land is empty. The border crossing is closed for the weekend. The sightseers take each other’s pictures and go home.
The site is typical of the 13 border crossings between Russia and China in the Far East, says Sergei Remizov, the Vladivostok-based manager of the Association of International Road Carriers’ Far Eastern Branch. The Chinese are geared up to do business. And the Russian side doesn’t have the staff or facilities to process trucks that roll back and forth between the two nations. “I’m even ashamed to look into the Chinese’s eyes,” Remizov said.
On the cusp of the 21st century, Asia’s two great land powers have an ambivalent relationship along their 4,300-kilometer border. While both sides are eager to exploit each other’s growing market economy, two-way volume of legal trade was a mere $6.1 billion in 1997, according to the Primorye regional administration’s Department for Foreign Trade. This compares with China’s trade of $60 billion with Japan and $43 billion with the United States.
The most promising investments seem either microscopic — individual traders with bags full of Chinese jeans or tennis shoes — or illicit, including everything from endangered species of turtles to bootleg Chinese vodka. Illegal imports from China amount to at least $3.6 billion a year, trade officials say.
China’s influence is perhaps most strongly felt in Primorye. Yet even here, China’s share of Primorye’s foreign trade has declined from 58 percent in 1992 to 16 percent in 1997, the regional administration reports. In part this is because the fall of communism opened Russia to imports from other countries. But Russia, with its economic crisis, isn’t Beijing’s top priority, officials say.
“When the Chinese bosses meet with Yeltsin, they always talk politics and friendship,” said Andrei Zagumyonnov, commissioner for the Primorye Krai’s Internal Trade and Foreign Affairs Committee. “But when they meet with President Clinton, they talk economics, and they sign a huge contract with Boeing.”
Russia’s Byzantine tax code is the biggest hindrance to trade, Chinese say. Russia has 44 taxes that take more than 85 percent of the profit from a company, Primorye trade officials say. The need to avoid the tax man creates an economy based on under-the-table cash deals. Syui Tsay Chen, head of the Suifenhe Mayor’s Office Department of Foreign Affairs, said business with Russia suffers because there is no trustworthy way to make wire transfers in the Russian Far East. And Russian law provides little protection for investors.
“For instance, say I am your partner, and I paid you to deliver some cargo,” Chen said. “But you don’t give me the cargo. Who will get my money back for me?”
The problems are not all Russia’s. Remizov says one trucker was stuck overnight at the Poltavka crossing last year, and Chinese hooligans assaulted him and stole his cargo. Police did nothing, he said. “There was even a recent case where a guy was eating lunch, and they stole his truck and drove away,” Remizov said.
Finally, Russian truckers refused to travel to China for a week this year, and Chinese officials agreed to crack down on crime.
While legitimate business remains sluggish, the underground economy is thriving. Russian loggers illegally ship timber to China, where it is milled and sent on to Japan, depriving Russia of the added value from processing the lumber. And the export of scrap metal is increasing as thieves steal metal from factories, hot water pipes, and World War II monuments.
At the same time, bootleg vodka, counterfeit Russian currency, uninspected meat and undeclared consumer goods head into Russia. In February, customs agents in Lesozavodsk, 400 kilometers south of Khabarovsk, stopped three trucks containing 280 barrels of pure alcohol, along with 42,962 bottles and 16,260 containers of vodka. The haul was worth 1.5 million rubles ($250,000).
Border guards periodically catch Chinese sneaking into Russia to catch endangered species — used as food or in traditional Chinese medicine. This year, Far Eastern customs inspectors seized everything from deer antlers worth $400 per kilo to $13,000 worth of illegally harvested ginseng.
The Siberian tiger is threatened by Russian poachers who export skins, bones and glands to China. And the Chinese population within Russia puts a strain on frogs, soft-shelled turtles and other edible species, said Vladimir Nesterenko, a biologist with the Institute of Biology and Soil Studies in Vladivostok. “The damage is increasing, because it is easier for them to do it [catch threatened wildlife] from inside Russia,” Nesterenko said.
Yet despite such strains, some see promise for Russia and China. U Sichimay, a businessman from Lyaonin, China, exports tomatoes to Irkutsk and Chita for 1/2 to 1/3 the price of local produce. As he talked business with a Russian partner in a Suifenhe cake shop, he predicted, “Business will develop, because we are neighbors, and we will overcome the problems we are having.”
Nonna Chernyakova contributed to this story.
By Russell Working
Valentin Trukhanenko
A Chinese shoe repairman at work in Vladivostok.
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