Russia On Edge As China Grows

From The Sydney Morning Herald:

So much money is rolling in that the Communist Party chiefs of Manzhouli have lined the main road to town with Russian theme parks, monuments, a sculpture garden, exhibition centres, factories and other trophies of overnight material success. These tourist-free tourist attractions and empty commercial buildings are partly financed by masses of timber mills that are busily stripping the legal and not-so-legal forestry wealth of Siberia. Some is sent back across the border but most is loaded on south-bound trains to Chinese construction sites and furniture factories.

Siberian oil trains also pass through here, though not as many as before. China gets its oil at a discount thanks to a $US6 billion loan that enabled Rosneft, ’s state-owned oil giant, to buy key oil assets from Yukos, the company previously controlled by the tax evader-cum-political prisoner Mikhail Khodorkovsky. Russia, it seems, is honouring its deal with China by sending oil elsewhere.

Oil volumes fell last year but defence sales crashed, prompting analysts to speculate that China’s People’s Liberation Army no longer relies on Russian technology. Russia once supplied the bulk of Chinese industrial machinery but now the long lines of excavators, trucks and machinery are all heading the other way.

China is meanwhile increasing its dominance of almost every sector of the Siberian consumer goods market. Two years ago the mayor of Vladivostok made the hyperbolic claim that all of the port city’s retail trade and half of its trade in services were controlled by Chinese.


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