An improved relationship between China and Russia has led to an influx of Chinese farmers into some of the most inhospitable parts of Russia. While the opportunity provides significant benefits to both countries, experts say that China’s presence in Russia could be a ‘geo-political time bomb’.
While there has long been a Chinese presence in Russia, the early 1990s saw a new-wave of immigration as Chinese farmers arrived to take over farms that had collapsed along with the Soviet Union. The flow of Chinese farmers increased further after the Global Financial Crisis of 2008 as China looked to manage risk by spreading investments.
In the Russian Far East province alone 350,000 of a total 2.2 million hectares is owned or leased by Chinese farmers, predominantly growing soybeans, wheat and potatoes as well as an increasing pork sector. In 2018, 150,000 hectares in East Siberia was leased to a Chinese company on a 49-year contract at a price of just US$5 / hectare.
Recent development between the two countries has been heavily influenced by the US-China trade war as China struggles to fulfil its enormous demand for soybeans. China has traditionally been a major consumer of US soybeans to the tune of $14 billion annually. In 2018, only 1% of China’s estimated 80 million tonnes of imported soybeans came from the US.
The Chinese government has continued to aid domestic production, including dedicating an additional 1 million hectares of land to soybeans. Also keen to capitalise on the situation, Russia made 2.6 million hectares of land available to foreign investors. Keen to restore the economy after the last recession, Putin is supportive of Chinese farmers and workers, despite lingering concerns about China’s real intentions.
The Russian government has made some investment into developing the infrastructure and transport required to aid trade in agricultural areas, but significantly more is required to make Siberia and the Far East more productive regions. As the relationship between China and Russia improves, the two countries have agreed to large scale cross border infrastructure projects, but Russia’s commitment is often hampered by a lack of capital. Currently recovering from a national recession, Russia’s population is just 10% of Chinas, as is their gross domestic product.
The Russians are concerned about the Chinese liberal use of agricultural chemicals which is seen as being excessive by Russian standards. Farmers often import chemicals from China, causing issues with methodology and analysis, as well as raising concerns around soil degradation and consumer safety.
One of the major issues is tensions between locals and Chinese workers. Among both Chinese and Russian employers, Chinese workers are seen as harder working and more reliable, and are favoured by Russian and Chinese employers alike. A large portion of the Chinese workforce is semi-migratory, working on farms during peak seasons before returning to China and taking their earnings with them. And While Putin is happy for the Chinese to farm some of the most inhabitable parts of Russia, many are suspicious of China’s interest in Russia. One in three Russians think that the new wave of Chinese farmers is part of China’s expansion policy, while a third think that it endangers Russian economic development.
Herein lies the conundrum for Moscow. With Chinese development of the Russian Far East and Siberia set to continue at a moderate pace, the Russian government will have to invest more money into the infrastructure required to maintain agricultural productivity. Concurrently, it must manage the social tensions that will likely increase as a result of those investments.