Sunday, March 17, 2019

Russia Paying Too High a Price for Chinese Money, Polonsky Says

Paul Goble

            Staunton, March 17 – Russia is paying too high a price for the money that is flowing from China into the pockets of Moscow elites because China is treating the Russian Federation like a raw materials supplier from which it can take as much as it likes without regards to Russian needs or desires, Ilya Polonsky says.

            That becomes obvious, the Moscow commentator says, when one considers the strategies Beijing is using, strategies that reflect “a tested means of economic expansion” at the expense of the territories into which its firms are moving and then operating (

            “The close economic cooperation with the Chinese People’s Republic carries with it inevitable risks and even essential potential problems for our country,” Polonsky says.  Chinese firms acquire sufficient shares in Russian companies so that Beijing is in a position to make “strategic decisions” for those companies.

            Already, “20 percent of the Russian project for producing liquefied natural gas in the Arctic belongs to the Chinese company CNPC;” 12.5 percent of Uralkalia is now in the hands of Beijing. And after a later start, Chinese interests have already acquired two percent of the shares of VTB Bank.”

            But even this is only a small portion of what China has achieved, Polonsky continues.  Beijing now controls “a significant part” of Russia’s forests. “It is interesting that Russia with its colossal forest resources over the last 40 years has not built a single cellulose-paper factory” while China has built many, despite having banned the felling of forests on its territory.

One reason for this, the commentator says, is that in addition to legal exports of Russian wood products, China is illegally importing much more.  Indeed, no one knows exactly how much of Russia’s patrimony is now going over the border to China, an unacceptable situation no matter how much money some in Russia are receiving.

 “In addition to cutting down the forests,” Polonsky adds, “the Chinese are actively involved in agricultural projects on the territory of Russia.” They are renting out thousands of hectares of land across the Far East and talking to other regions as well.

What China needs from Russia are “resources and land,” he argues. What Russia is interested in is attracting investment. “But the question is at what price will our country receive that money.”  If that price is to lose much of the country’s patrimony either by exports, loss of control or pollution, then “one must think about the value of such a partnership.”

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