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Chinese strategy - 2024

While anyone try to analyze current Chinese investments into Russian Far East, it turns obvious that their trend is focused upon local resource based projects instead of systematic infrastructure development. Such strategy has several targets, and development of Chinese North-East by the use of Russian resource rent is one of them. In 2023 first serious capital run from China equal to $ 68,7 billion was registered in the long time. It’s not too much, but creates a big trouble for Chinese authorities. Another reason for capital run from China is, by some experts, the effort of business elites to localize overseas investments and thus hide their capitals outside from domestic scrutiny.

As a result, growing activity of Chinese investors is registered on the stock markets of Tokyo and Seoul, although government is trying to block that trend. One of the officially acceptable option for this trend is offshore zone at the Russkii Island in framework of Territory of Advanced Development (TAD). In framework of the officially stated investments here Chinese companies can hide their profits by the special legal privileges, and use them however they want. Experts forecast also that any developer models for Chinese capital run may be used in framework of designated Vladivostok satellite city, which should attract about $ 3 billion.

One more perspective point for Chinese investments here is Big Ussuriiski Island development in Khabarovsk, whose plans could not be synchronized by parties during many years. As Russian government stated, now mutual understanding is finally achieved and intergovernmental agreement is in the process of preparation. Resulting, cargo-passenger border gate, flood protected road and logistic-touristic centers will appear here soon and make the island one of the key regional center of collaboration.

Parties plan to start full size designing during 2024 and begin construction in 2025. 1,4 million people and 1,3 million tons of cargoes should cross this border gate in 2030. Regional government already prepared all documents for the island road by its own and plan to start construction this spring. Since opening this road it will pass annually 700K tourists and 700K tons of cargo.

During 2024 Russia will present to Chinese partners a concept of the island development. Recently Russian Vostok Development Ministry, Khabarovsk government and local company “Orion” signed agreement on creation transport-logistic complex with private investment of 14 billion rubles. They will create Russian-Chinese center of duty free trade of 30 billion rubles with hotels, recreational and museum zones, cable car road to Khabarovsk and flood protecting dams. As Heilongjiang provincial governor Liang Huiling stated, Big Ussuriiski island will become soon the key zone of regional mutually profitable and cultural collaboration.

Chinese investments began to come also to the real estate construction in Primorye. Recently created company “Vostok-Stroy”, new resident of Vladivostok Free Port, with 49% of Chinese share will create cottage settlement in Peretino town near Partizansk (Golden Valley town) on 10 hectares with 673 million rubles investment. It will start construction this year with Chinese technologies and supplies to complete up to 2028.

While Russian director of “Vostok-Story” owns 51 % share, Chinese entrepreneur Mao Weihong has 33%, and Wang Changfu — 16%.