Government in Siberia signs 49-year outline deal for Chinese company to farm on countries’ border

https://next.ft.com/content/700a9450-1b26-11e5-8201-cbdb03d71480
Outcry in Russia over China land lease
https://en.wikipedia.org/wiki/Zabaykalsky_Krai

Chinese farmers rest in the field, 150 km East of Vladivostok, in the Russian Far East, September 4, 2000. Chinese farmers have to rent and cultivate land in the Primorsky Kray region due to the shortage of land in China. According to Russian President Vladimir Putin, in a couple of decades the Russian population of this region will mainly speak Chinese, Japanese and Korean. Around 30 thousand Chinese have permanent residence in the Primorsky Kray region. (Photo by Oleg Nikishin/Newsmakers)
June 25, 2015
by: Kathrin Hille in Moscow

Plans to hand a stretch of remote Siberian territory to Chinese investors have triggered a storm of protest in Russia, underlining how a relationship hailed by the leaders of both countries is being undermined by deep-rooted distrust.

The government of Zabaikalsky Krai, one of the country’s poorest regions, signed a preliminary agreement earlier this month under which Hua’e Xingbang, a private Chinese company, would gain control of more than 1,000 square kilometres of idle land bordering China on a 49-year lease for Rbs24bn ($440m).

But when the plan was made public, Russian politicians and media warned it could lead to an annexation of Russian lands by Beijing.

“This deal poses huge political risks, particularly to Russia’s territorial integrity,” Igor Lebedev, a deputy speaker of the Duma, Russia’s lower house of parliament, said. “The contract must not be signed.”

“They will bring in scores of Chinese. Then 20 or 30 years from now the Chinese government will demand those lands be given to China because all those Chinese people live there,” he added.

While Mr Lebedev’s nationalist Liberal-Democratic party often employs rhetoric that is hostile to non-Russians, his outrage has been widely echoed.

Vladimir Pozdnyakov, a Communist party deputy from Zabaikalsky Krai, also expressed concerns that the proposed investment could become a Trojan Horse for China to overrun Russia’s sparsely populated eastern Siberian and Far Eastern regions.

Only 5.4m live in the five Russian regions neighbouring China, while the two Chinese provinces on the other side of the border have a combined population of 63m.

Mr Pozdnyakov suggested the move could destroy the local environment. “We have more than enough experience with that. Where they have planted, the land is dead. Nothing will grow for years,” he warned.
Critics also fear it could lead to Russian agribusinesses being squeezed out because as well as exporting produce back to China they could also sell it more cheaply on the domestic market.
Chinese investors have been scouring Russia for opportunities to buy up land for agricultural production facilities since the steep depreciation in the rouble in December.
The controversy comes as Russia is forced into making an increasing number of concessions to Chinese investors, including over control of natural resource assets. Russia needs Chinese funds to replace a shortfall caused by western sanctions.
Konstantin Ilkovsky, governor of Zabaikalsky region, has defended the land sale by saying no Russians were willing to cultivate land in his region.
Russia’s political leadership have also recognised the dilemma.
“We do not have enough population,” Sergei Ivanov, Mr Putin’s chief of staff, conceded in an interview earlier this month. “If a Chinese investor wants to cultivate virgin land 200km from the border and grow vegetables there — so do it, for God’s sake.”
FT View
Putin and Xi: not quite the allies they seem
Russia’s President Vladimir Putin (L) and China’s President Xi Jinping attend an agreement signing ceremony during a bilateral meeting at Xijiao State Guest house ahead of the fourth Conference on Interaction and Confidence Building Measures in Asia (CICA) summit, in Shanghai on May 20, 2014. Chinese President Xi Jinping held today talks with visiting Russian leader Vladimir Putin, as the two powers seek to build ties in the face of Western criticism and territorial disputes. Russia’s relations with the United States and European Union have plunged to a post-Cold War low in recent months over its seizure of Crimea and Western accusations Moscow is fomenting unrest in the east of Ukraine.
The Russia-China summit will be stronger on show than substance

Russian president Vladimir Putin has pushed for closer ties with Beijing in response to Moscow’s fall-out with the west. He and his Chinese counterpart Xi Jinping have held numerous summits since the start of the Ukraine crisis and claimed that their relations are better than ever.

Hua’e Xingbang is a subsidiary of Zoje Resources Investment, a sewing machine maker from the south-eastern Chinese province of Zhejiang which is trying to diversify into more profitable sectors.

Liu Changgui, legal representative of Hua’e Xingbang, declined to comment on the planned Russia deal and the backlash against it.

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