Relations between the two powers in Asia have become more elaborate and more intimate in the past decade. After a period of stagnation in the 1990s, there was an eight-fold increase in trade over the decade, from $5.7 billion in 1999 to $48 billion in 2007. Before the crash of oil prices and the Russian economy went into the tank, trade was projected to increase to $60 billion by 2010. Trade is fed by China’s growing appetite for oil and timber and other Russian Siberian and RFE natural resources such as fish. Illegal Chinese immigration and contraband complicate the trade between the two countries. And trade has been booming.
The huge oil and gas developments on the island of Sakhalin off the northeastern Siberian coast have become important chips in the Moscow-Beijing political economic scenario. Sales of Russian oil from Western Siberia to China have been an important element in the trade. And Moscow has been planning an off and on major pipeline that would feed China’s oil center at Dachang as well as other world markets with an eastern terminus on the Pacific. But the high-tech nature, capital-intense oil and gas developments produce little employment for the local RFE populations. And local governments and businesses have been characterized by corruption and mafia-type operations, sometimes in league with Chinese, Korean, and Japanese organized crime.
Some 50,000 Chinese work legally in Russia's Primorye region along the Pacific coast. But their actual number is believed to be twice that, according to Russian officials. The Chinese workers earn an average of about $100 a month, half the regular Russian salary but far more than what they could get back home. Other resident Chinese are traders operating the gray markets between the two countries.
Agreement on setting the 2,700-mile border in October 2004 was supposed to have resolved issues — including immigration — dating back over 300 years to the Russian empire’s push into relatively uninhabited areas. But the Chinese still lament “the lost one and a half million kilometers transferred to the Russian Empire” in the so-called “unequal treaties” of the 19th century at the high-water mark of European colonial penetration of China. Chinese authorities are supposed to be cooperating with Moscow in preserving the demographic imbalance between northeast China's growing 110 million and the Russian Far East’s dwindling 6.6 million.
But the overall decline in the Slav population of the Russian Federation and an out-migration to other parts of Russia from the RFE have taken a heavy toll. Since the dissolution of the Soviet Union, the RFE Russian population has dropped by 14 percent in the last 15 years. The Russian government has discussed a range of re-population programs and economic development to avoid a projected drop to 4.5 million people by 2015. But like other Russian economic programs repeatedly announced and revamped, this has not been happening.
In fact, when Moscow recently tried to clamp on new laws regulating the import of used cars from Japan and South Korea, rioting in Vladivostok became a national news story. This month, at least two senior officials in the Russian Far East countermanded an order by Prime Minister Vladimir Putin to use force to disperse anti-government protests. Some of the demonstrators who echoed similar protests in Moscow called for Putin’s resignation because of the growing economic difficulties, particularly hard-felt in the RFE with strong ties to the world outside Russia.
Putin made a personal inspection tour of the area last year in an effort to get a huge construction and demonstration project for the Asian and Pacific Economic Council (APEC) summit in 2012 underway. Despite several announced appropriations of funds for the project, including a new city on an island off the Vladivostok coast, nothing has been started.
Meanwhile, Chinese illegal aliens have been entering Russia since the border opened to tourists after the collapse of the Soviet Union in 1991. In 1994, officials estimated that 90 percent of the Chinese who came in tour groups just disappeared. Most went to trade in the markets and did not return home. Some migrated to other parts of Russia or even tried to go to third countries via Russia. In cities ranging from Omsk in central Siberia to Petropavlovsk-Kamchatka in the northeast, Chinese traders have filled many of Russia's outdoor markets.
At least 100,000 Chinese are estimated to illegally live in the RFE region alone as traders and laborers, with thousands more regularly arriving on legal temporary worker visas. The head of the Russian Federal Migration Service warned in 2000 that the Chinese could become the dominant population in much of the Russian Far East later in this century.