Russia: Outcry Over Land Lease To China

Courtesy of The Financial Times, a report on a controversial lease of Russian land to Chinese investors:

Plans to hand a stretch of remote Siberian territory to Chinese investors have triggered a storm of protest in Russia, underlining how a relationship hailed by the leaders of both countries is being undermined by deep-rooted distrust.

The government of Zabaikalsky Krai, one of the country’s poorest regions, signed a preliminary agreement earlier this month under which Hua’e Xingbang, a private Chinese company, would gain control of more than 1,000 square kilometres of idle land bordering China on a 49-year lease for Rbs24bn ($440m).

But when the plan was made public, Russian politicians and media warned it could lead to an annexation of Russian lands by Beijing.

“This deal poses huge political risks, particularly to Russia’s territorial integrity,” Igor Lebedev, a deputy speaker of the Duma, Russia’s lower house of parliament, said. “The contract must not be signed.”

“They will bring in scores of Chinese. Then 20 or 30 years from now the Chinese government will demand those lands be given to China because all those Chinese people live there,” he added.

While Mr Lebedev’s nationalist Liberal-Democratic party often employs rhetoric that is hostile to non-Russians, his outrage has been widely echoed.

Vladimir Pozdnyakov, a Communist party deputy from Zabaikalsky Krai, also expressed concerns that the proposed investment could become a Trojan Horse for China to overrun Russia’s sparsely populated eastern Siberian and Far Eastern regions.

Only 5.4m live in the five Russian regions neighbouring China, while the two Chinese provinces on the other side of the border have a combined population of 63m.

Mr Pozdnyakov suggested the move could destroy the local environment. “We have more than enough experience with that. Where they have planted, the land is dead. Nothing will grow for years,” he warned.

Critics also fear it could lead to Russian agribusinesses being squeezed out because as well as exporting produce back to China they could also sell it more cheaply on the domestic market.

Russia map

Chinese investors have been scouring Russia for opportunities to buy up land for agricultural production facilities since the steep depreciation in the rouble in December.

The controversy comes as Russia is forced into making an increasing number of concessions to Chinese investors, including over control of natural resource assets. Russia needs Chinese funds to replace a shortfall caused by western sanctions.

Konstantin Ilkovsky, governor of Zabaikalsky region, has defended the land sale by saying no Russians were willing to cultivate land in his region.

Russia’s political leadership have also recognised the dilemma.

“We do not have enough population,” Sergei Ivanov, Mr Putin’s chief of staff, conceded in an interview earlier this month. “If a Chinese investor wants to cultivate virgin land 200km from the border and grow vegetables there — so do it, for God’s sake.”

Russian president Vladimir Putin has pushed for closer ties with Beijing in response to Moscow’s fall-out with the west. He and his Chinese counterpart Xi Jinping have held numerous summits since the start of the Ukraine crisis and claimed that their relations are better than ever.

Hua’e Xingbang is a subsidiary of Zoje Resources Investment, a sewing machine maker from the south-eastern Chinese province of Zhejiang which is trying to diversify into more profitable sectors.

Liu Changgui, legal representative of Hua’e Xingbang, declined to comment on the planned Russia deal and the backlash against it.


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About This Blog And Its Author
Seeds Of A Revolution is committed to defining the disruptive geopolitics of the global Farms Race.  Due to the convergence of a growing world population, increased water scarcity, and a decrease in arable land & nutrient-rich soil, a spike of international investment interest in agricultural is inevitable and apt to bring a heretofore domestic industry into a truly global realm.  Whether this transition involves global land leases or acquisitions, the fundamental need for food & the protectionist feelings this need can give rise to is highly likely to cause such transactions to move quickly into the geopolitical realm.  It is this disruptive change, and the potential for a global farms race, that Seeds Of A Revolution tracks, analyzes, and forecasts.

Educated at Yale University (Bachelor of Arts - History) and Harvard (Master in Public Policy - International Development), Monty Simus has long held a keen interest in natural resource policy and the geopolitical implications of anticipated stresses in the areas of freshwater scarcity, biodiversity reserves & parks, and farm land.  Monty has lived, worked, and traveled in more than forty countries spanning Africa, China, western Europe, the Middle East, South America, and Southeast & Central Asia, and his personal interests comprise economic development, policy, investment, technology, natural resources, and the environment, with a particular focus on globalization’s impact upon these subject areas.  Monty writes about freshwater scarcity issues at and frontier investment markets at