China: Russian Far East, China’s Land of Plenty
In the bad, old days of the Cold War, the Soviet Far East was an armed camp. It was the closest to the United States, and heavily fortified. Now, it’s primarily South Los Angeles, only with Chinese, not Mexicans. [LINK]
Russia’s latest census has produced a bombshell result: over the past decade, the Chinese have emerged as the fastest growing ethnic minority in Russia. While official data of the October 2002 census will be published only next month, preliminary figures leaked to the press show that Russia’s Chinese population has grown from just over 5,000 in the late 1980s to 3.26 million today.
This makes the Chinese the fourth biggest ethnic group in this country after Russians (104.1 million), Tatars (7.2 million) and Ukrainians (5.1million) – all indigenous inhabitants of Russia. More than three-fourths of Chinese immigrants have settled down in Siberia and the Far East. The census results lend chilling reality to Russia’s age-old nightmare of a Chinese takeover of the Asian part of Russia. Eighteen million Russians scattered across the India-size expanse of the Far East and Siberia face 250 million Chinese cramped across a common border in China’s northern provinces.
Russia’s military is a sad and sorry remnant of its former self. In the Far East, Moscow is but a dot on a map for many, including many in the government. The pay for government employees and the military is even more haphazard than back west, and it often seems like no one in Moscow cares.
But, China does. Look at the oil fields that may exist:
The population of the RFE totals around 15 million with the population centers being fairly isolated from each other. With estimated reserves of more than 15 billion tons of coals, 9.6 billion tons of oil, and 14 trillion cubic meters of natural gas, the RFE is a resource abundant region.
Immense reserves of diverse energy resources are concentrated in the Russian Far East’s vast territory. In the region there are not only traditional – commercial energy resources – coal, oil, natural gas, hydropower – but also a wide range of non-traditional energy sources (tidal, geothermal, wind, solar, etc.). The general amount of potential oil resources is estimated to be 29 billion tonnes, for natural gas – 23 trillion m3, for coal 2.2 to 3.5 trillion tonnes. Geological exploration of these potential resources remains low. The discovered reserves of solely commercial energy resources in the RFE amount to almost 23 billion tonnes of coal equivalent (tce), of which over 4 billion tce represents actual transportable crude oil and natural gas resources. The probable output from the RFE’s rivers is estimated to be 1008.2 billion kWh annually. [snip]
The RFE’s vast territory and uneven economic development has resulted in the formation of several local types of general-purpose infrastructure in the region. In the more-developed southern districts there is a fairly developed general-purpose infrastructure consisting of railroad networks (the Trans-Siberian and Baikal-Amur railways), seaports, roads, and communications that have unused potential. On the other hand, most of the RFE’s prospective energy reserves are concentrated in the remote and less-developed northern districts, as well as the shelf zones of the Far Eastern and Arctic seas, which lack adequate infrastructure and developed transport links with concentrations of industrial districts, population and external markets.
Seven million people live on the frozen resource-rich taiga of Russia’s Far East, a region nearly as large as the contiguous United States. Roughly 1.3 billion Chinese are packed like pickles next door, where corruption, spiraling unemployment, environmental disaster, and growing rural unrest are taking the luster off the Chinese economic miracle. Unfortunately for China’s dire need for new demographic and economic horizons, Russia isn’t eager to share its chilly sandbox with the neighbors. The struggle between Dr. Malthus and Doctor Zhivago threatens the balance of power in the Far East. But economics rather than a Tom Clancy-style showdown will likely decide the winner.
If the Earth’s territory were divvied up according to demographic need and by potential for economic development, China would play Pac-Man at the expense of the Russian Far East. Four time zones wide, the RFE extends from the Bering Sea’a few miles from Alaska’in the northeast, to the Sea of Japan in the southeast, to China in the south, and Siberia to the west. The 100 million inhabitants of the RFE’s Chinese neighbor, the Northeast Provinces (also called Manchuria), live in an area that is roughly one-eighth the size of the RFE.
The RFE’s poor manufacturing base, crumbling physical infrastructure, high transportation costs, and small natural markets discourage local enterprise. The perversions of Soviet economics were accentuated in the RFE, resulting in economic dislocation even more severe than elsewhere in the former Soviet Union. Moscow’s make-work, value-destructive factories that struggled to survive after the command economy collapsed at least had a natural local market of millions of Muscovites. But after Soviet subsidies ended, similar facilities situated on RFE Frozen Plain No. 948,373 had a more difficult time getting raw materials’and selling their shoddy goods to markets thousands of kilometers away. On another front, periodic power shortages plunge large swaths of the RFE into Arctic darkness every winter’an eight-month-long exercise in frostbite that makes North Dakota seem balmy by comparison. Tiny cadres of progressive businesspeople who have managed to unlearn the lessons of 70 years of Soviet-style communism have to battle local politicians who set the Russian standard for incompetence and corruption. The RFE is Russia’s Wild West, but post-Soviet Russia doesn’t have the patience, time, manpower, or money to wait for Manifest Destiny to take hold’nor to exploit the RFE’s superabundance of natural resources, including timber, oil and gas, minerals, and fish. It’s no wonder that the region’s population has declined by 10 percent over the past decade.
China’and Manchuria in particular’has its own set of problems. Overpopulation, resource misallocation, and twisted economic incentives that are a result of the Chinese capitalist experiment are pressuring economic growth, particularly in the inland areas. According to the Economist, the Chinese Academy of Social Sciences has projected that unemployment could rise to 15 percent (compared with an official rate of less than 4 percent), with comparatively underdeveloped inland areas hit the hardest. The shuttering of state-owned enterprises throughout China’and especially in parts of Manchuria’part of the painful process of dismantling the infrastructure of the state economy, has resulted in widespread labor unrest. Private companies and rural enterprise have failed to pick up the employment slack: Arable land is scarce and exhausted, and land loss has accelerated as aquifers have dried up, resulting in declining grain harvests. The absence of a political safety valve has raised concerns that rural unrest could derail China’s slow economic liberalization process.
The enormous, remote, and bitterly cold Sakha Republic (also known as Sakha) is the second-largest producer and exporter of diamonds in the world and Russia’s biggest supplier of gold. Logistical challenges, high costs, regulatory hurdles and physical remoteness have slowed international participation in development of the Sakha mining industry.
The RFE accounts for almost 70% of Russia’s gold output. The richest gold deposits are located in the Amur, Kamchatka and Magadan oblasts, and the Republic of Sakha.
Many believe that Kamchatka’s mining industry began in 1994 when the Kamchatka geology committee announced international tenders for the exploration of two gold reserves: the Aginskoe reserves in central Kamchatka and the Asachinskoe and Rodnikovoe reserves in southern Kamchatka. According to early estimates, these deposits contain an estimated 198 tons of gold and 650 tons of silver.
Primorskii krai has plentiful reserves of lead, zinc, tungsten, boron, spar, tin, gold and silver. Diamond deposits were discovered recently, but remain unexplored due to a lack of financing.
Primorye has unique reserves of tungsten – 80% of all Russian output; boron – 100%; tin – 40%; lead and zinc – 60%; and spar – 100%. Four tungsten lode deposits for industrial mining are located in the Krasnoarmeiskii and Pozharskii districts. Two of them (Vostok-2 and Lermontovskoe) are controlled by Primorskii GOK and the Lermontovskaya Ore Company. Primorskii GOK is not currently operating because of high costs for rail and other transportation, making it unable to match world market prices (which were two to three times lower in 1995). Lead and zinc deposits are located mainly in the Dalnegorsk and Krasnoarmeiskii regions. Nine are being exploited by the companies Dalpolimetall (in which Glencore International has a 52% stake), Vostok, and Khrustalnyi GOK. Thus far, Dalpolimetall has sold its production to Japan, Korea and Thailand, rather than in Russia, due to the insolvency of local buyers. Boron deposits are mined by the Bor joint-stock company. Primorskii spar is mined by Yaroslavskii GOK. The Vosnesenskoe and Pogranichnoe deposits contain enough spar for 20 years’ worth of extraction. There are about 32 tin deposits in Primorskii krai, but fewer than half of these are actively exploited.
You can see the value of the Russian Far East to the Chinese, and the threat that even the existing Chinese population in the region poses. The Far East Military District is Russia’s first line of defense against a Chinese threat. From the order of battle at the link, it would appear that many or most of the ground troops in the region are stationed on Sakhalin or Kamchatka. Further evidence of the state of the Russian military:
Even though military installations are subordinate to the federal government, and officially receive most of their funds from Moscow, many are in fact dependent on regional economies for their well being. Service personnel do not receive sufficient pay to survive in the Far East, which has the highest cost of living in the country. Thus, the availability of second jobs as well as the food and other assistance provided by regional “sponsors” are critical to mitigating base difficulties. There is a climate of violence and desperation facing regional servicemen that can affect nuclear security. Men are so wretched that local naval facilities are plagued by suicide epidemics: in June 2000 three men killed themselves within a week. Another pair killed themselves in November 2001. More typically, sailors, including those guarding nuclear sites, try to make ends meet through theft. In March 2000 five sailors assigned to a unit that guards decommissioned submarines (who were earning about $25 a month) died attempting to steal metal from a partially dismantled Yankee-class submarine in Primorye. Last September, the director of the Zvezda Shipyard, where SSBNs are dismantled, was murdered by his stepson, in a case that may have been precipitated by disputes over the stepson’s involvement in sales of metal stolen from the facility.
It is possible that the border guards and soldiers in the RFE, with the naval and air forces, would make a respectable showing defending the Motherland in a fight with the Chinese. They are far more likely to be swept away by a tide of Chinese troops, with little or no effect on any invasion. The truth of the matter is that Russia cannot hope to defend the RFE with conventional force of arms. The only choice the Russian government has to slow or defeat the Chinese is the use of WMD’s, nuclear, biological and chemical weapons. This is a doomsday scenario, because the Chinese would almost certainly respond in kind. This fight would then become a problem for Japan, South Korea, etc.
I’m at a loss to predict how Russia could retain the Far East in the event the Chinese move militarily. And it’s one heck of a prize. The Japanese recognized it in the 1930′s when they fought and lost a war with the Soviets in the region.
Russia’s best shot is a joint development, I suppose. China has the manpower and Russia the cold weather skills to exploit the resources of the region. There’s enough wealth for all if they want to work together. Unfortunately, the Russians aren’t real good at working together. War appears unavoidable. 5-7 years out, after reunification with Taiwan.
I would call your attention to this blog post, however, about Taiwan. It appears that the heads of the two largest political parties in Taiwan have agreed that reunification isn’t necessarily a bad thing.
Table of contents for China: What the Future May Hold
This entry was posted on Friday, February 25th, 2005 at 2:59 am and is filed under Original writing, Analysis, China, China, China's Economy, Original writing. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.