What is Putin's big plan?, Turning east? Russia Raises Far East Development Strategy Again

In the past week, the 8th Oriental Economic Forum was held in the Russian Far East city of Vladivostok. The Far East region of Russia has once again become the focus of attention for all attending parties.

At this forum, Russian President Putin outlined Russia's Far East plan through a speech and emphasized that the Far East is a strategic priority for Russia in the entire 21st century. Ten years after the implementation of Russia's Far East strategic plan, Putin once again emphasized the importance of the Far East region for Russia's economic development.

The Oriental Economic Forum was personally initiated by Putin in 2015, and he attends and delivers keynote speeches every year. According to the information on the forum website, the three-day forum from September 11th to 13th will be themed "Towards Cooperation, Peace and Prosperity", covering various topics such as attracting investment, improving the business environment, and strengthening development cooperation between Russia's Far East and the Asia Pacific.

Associate Professor Wei Jinshen from the School of Politics and International Relations at Lanzhou University told First Financial Journalist that as a major country spanning Europe and Asia, Eastern policy has always been an important component of Russia's foreign policy. "Since entering the 21st century, especially since the 2008 financial crisis, Russia has accelerated the pace of development in the Far East region." He said, "The Putin government's Far East policy focuses more on regional development and economic development considerations."

Moscow, the capital of Russia

Russian Far East Development Plan

Putin mentioned at the beginning of his speech that the international economy has undergone tremendous changes in recent years, and these changes will continue. "A new model of bilateral relations and integration is emerging. It is in this model that creativity, openness, and focus on development have become the strong comparative advantages of the Asia Pacific region. These are the key factors that determine the Asia Pacific region's economic growth rate to be the highest in the world, and the future of the world will belong to the Asia Pacific region."

According to data provided by Putin, the trade volume between Russia and Asia Pacific countries increased by 13.7% throughout last year, and in the first half of this year, it increased by 18.3%. He hopes that Russia's trade and economic relations with countries in the Asia Pacific region can continue to develop, and emphasizes that Russia's Far East region is open to strengthening trade and cooperation with countries in the Asia Pacific region, and the potential for such cooperation cannot be underestimated.

Public data shows that the Far East region accounts for 40% of the territory of the Russian Federation, with abundant resources, gathering nearly 50% of Russia's forests and gold reserves, over 70% of fish and diamonds, and over 30% of mineral resources such as titanium and copper. However, due to the large area of land located in the Arctic Circle and its surrounding areas, coupled with a lack of funds, manpower, and infrastructure, its development lags far behind the western region of Russia. The average proportion of resource exploration in the region is only 35%.

Putin believes that many of the scarce strategic raw materials needed for economic development are readily available in the Far East region, which is a strong foundation for Russia's economy to stand firm.

For the specific planning of the Far East region, Putin stated that special preferential policies will be introduced to support the development of industries in the Far East, and the "Free Port" and "Advanced Zone" bills will continue to be deepened; Increase the development of mineral resources in the Far East region; Improve the investment and financing environment for the Far East region and launch a federal level cluster investment platform for targeted development in the Far East; Increase energy supply to the Far East region and comprehensively build a super energy pipeline project for the Far East; Focus on building transportation facilities in the Far East region and expanding existing logistics and freight channels; Breaking through population bottlenecks and promoting sustainable population growth in the Far East region; In addition, improving the urban living environment in the Far East region.

Russia's earliest proposal to prioritize the development of the Far East can be traced back to 10 years ago. In early 2012, after Putin began his third presidential term, the Russian government officially established the Ministry of Far East and Arctic Development. One year later, the "National Plan for Social and Economic Development in the Russian Far East and Baikal Region" came into effect, marking the implementation stage of a long awaited new round of Russia's Far East development strategy.

Inviting Chinese capital to participate in the development of Russia's Far East region

Over the past 10 years, through government support for the development of the Far East region and the driving effect of the Eastern Economic Forum, data provided by Putin shows that Russian companies have signed investment agreements worth over 7.7 trillion rubles, of which 3.4 trillion rubles have been implemented. The development projects in the Far East have brought 125000 new job opportunities and approximately 700 new construction companies to Russia. The development projects that have emerged in the Far East include iconic projects such as the Amur State Natural Gas Chemical Plant, one of the world's largest natural gas processing plants, and the Nahodka Mineral Fertilizer Plant's large tonnage shipyard. In addition, the Udokanskoye copper mine, the Baimskoye copper mine, and the Malmedyskoye copper mine are also important development projects for Russia in the Far East.

In the past 10 years, the turnover of goods at Russia's Far East seaport has increased by 1.6 times, the number of houses built has increased by 1.3 times, and electricity consumption has increased by 1.2 times. The annual gold production in the Far East region has increased by 1.6 times, and coal production has increased by 2.8 times.

Meanwhile, the investment growth rate in the Far East region is three times higher than the average investment growth rate in all of Russia. From 2014 to 2022, the growth rate of fixed capital investment in Russia was 13%, while the growth rate in the Far East region was 39%.

Just before the opening of this forum, a domestic public opinion survey released by the All Russian Social Opinion Research Center on its official website on September 6th showed that up to 67% of respondents support Russia's "turn to the East" foreign policy, which prioritizes developing relations with Eastern countries rather than Western countries. Meanwhile, 65% of respondents believe that economic and trade cooperation, including major investment projects and the creation of joint ventures, will contribute to the success of Russia's "turn to the east" policy.

In recent years, foreign capital has also been active in the development and construction of the Russian Far East region. According to statistics from the Russian Far East and Arctic Development Group, 87 foreign-funded projects are being implemented in the Far East Advanced Development Zone and Vladivostok Free Port, of which 52 projects have been funded by Chinese investors, with a total investment of 10.8 billion US dollars. These projects involve industry, mining, agriculture, construction, transportation, and logistics.

According to Xinhua News Agency, in the joint statement signed by China and Russia in March this year on the development plan of key directions for economic cooperation between China and Russia before 2030, it was mentioned that both sides should deeply tap into the potential of local and border area cooperation between the two countries, improve effectiveness, and develop mutually beneficial cooperation in the "Northeast Far East" region between China and Russia.

According to the website of the Ministry of Commerce, in the development plan for cooperation in the Russian Far East signed between China and Russia, according to Russian statistics, China has been the largest trading partner in the Russian Far East region for many years.

Regarding the cooperation between China and Russia in the Far East, Wei Jinshen believes that both sides have achieved good results in infrastructure construction, border port trade, industrial park construction, tourism, and cultural exchanges. There is still greater development potential and space for future cooperation and exchange between the two sides.

In 2022, the bilateral trade volume between China and Russia reached a record high of 190.271 billion US dollars, a year-on-year increase of 29.3%. China has remained Russia's largest trading partner for 13 consecutive years. Previously, China and Russia set a goal of achieving bilateral trade of 200 billion US dollars by 2024.