Guest post: An Agricultural Going-Out? The Case of Russia’s Far East

This is a guest post by Jiayi Zhou (Institute of Social Studies, The Hague), who has done research on Chinese in the Republic of Georgia and is preparing to write a PhD dissertation on Chinese “land grabs” in the Russian Far East. Her literature survey has come up with some fascinating information on this little-known subject.

Agriculture, though one of the target sectors of China’s Going-Out policy, remains a very small portion of Chinese OFDI (0.82% in 2010) and lacks any macro-level strategy. Amidst concerns over the world-wide “land grabbing”, China’s NDRC has tried to make clear that overseas agricultural projects and land acquisitions are not a part of its national food security strategy. But though China does remain largely food self-sufficient, it has become increasingly dependent on imports of soybean and livestock feed, and still faces pressing challenges of limited water resources, environmental degradation, and urbanization. But currently, according to Remin University’s Zhu Xinkai, agricultural investment abroad reflects more the “individual behavior of enterprises.” Now whether or not they have strong state backing, the presence of Chinese agribusinesses in Africa, Southeast Asia, and Latin America has been keenly noted by western media. Very little attention however has been paid to Russia, a fascinating case which might add much to analysis of the actors, motivations, and character of China’s so-called ‘Agricultural Going-Out’:

Russia borders China’s northeast, has vast amounts arable land lying idle, and is suffering from demographic decline and labor shortages – particularly in Siberia and the Far East. In recent years, Russia has been eager to stimulate foreign investment and agricultural production there, evident at the 2012 APEC summit, which was hosted in Vladivostok, and whose theme Russia chose to be global food security. Russia’s land-demography dilemma is the exact opposite of China’s, where in at least in one small village named Sunrise (太阳升村)in Heilongjiang province, peasants are grumbling about the ‘人多地少 ’  [too many people, not enough land] issue (see full story; Sunrise Village, in Dongning county, has only 1000 mu (67 hectares) of land for over 400 people. According to the source, as of 2011 it had some 50-60 villagers operating farms in Russia and even more going abroad as hired help). Chinese agribusinesses also have similar complaints, constrained as they are by village ownership rights – the Household Responsibility System – from easily acquiring large and contiguous plots of farmland (see Zhang and Donaldson 2010). Such factors can at least partly explain the phenomenon of Chinese agribusinesses, entrepreneurs, and peasants crossing the border into Russia to farm – where land is not only abundant, but also cheap.

Some of the larger-scale Chinese agricultural investment projects in Russia include that of Dongning Huaxin Group, with 40,000 hectares (ha) in Primorsky Krai; branches of the Heilongjiang Land Reclamation Bureau, which had some 80,000 ha in Russia’s Far East at the end of 2011; Baoquanling Far East Group, with over 6000 ha; among others (source).  Dongning Huaxin Group and Beidahuang Group have also collaborated to set up a ‘Friendship Farm’ which hopes to reach 200,000 ha by 2016. Larger businesses usually lease large plots of land (for up to 49-years), often in joint-ventures with Russians, and grow mainly soybean and grains, with some livestock projects as well. Export back to China seems to be the goal, but many of the afore-cited sources mention that due to shipping costs, tariffs, and a general lack of policy support from China, much of the production is still sold on the Russian market (source, source).

Nested within large-scale land deals are also small- and medium-sized enterprises, so-called ‘family farms’ [家庭农场], and individuals who cultivate through sub-leases and contracts. Wutong River Farm, for instance, which had “surplus labor, idle machinery, advanced planting technology – but no more available land on which to plant” signed an land concession agreement with Dongning Huaxin Group in 2010, for 3,000 ha of land near the city of Ussuriysk. There are also even smaller-scale Chinese ‘family farms’ which dot the landscape of Russia’s countryside, many of which operate independently and grow greenhouse vegetables for the local markets. One source even reported that Chinese farmers provide some three-fourths of the local vegetables in Russia’s Amur region.

When and how precisely this “farm panning” [种地捞金] rush began is unclear. One official suggests somewhere around the year 2000 (the first intrepid few from Sunrise Village to go farm in Russia left in 1998). According to the Heilongjiang Academy of Social Sciences, the farming boom in Russia is strongly correlated with the rise in the two countries’ cross-border trade (source). No credible statistics about Chinese agricultural activities abroad are collected at the national level, but some local governments have been keeping track: according to what is hopefully a reliable news report published in 2011, Dongning county’s official data showed that locals and locally-based businesses had concessions amounting to over 200,000 ha of land in Russia, with some 160,000 ha actually in development. For some perspective, Dongning county’s own arable land amounts only to some 50,000 ha. The city of Heihe’s data showed that as of 2011, Heihe businesses and persons had contracted some 60,000 ha of Russian land, with 40,000 ha in development.

Situating Chinese agricultural activity in Russia within broader discourses about China’s Going-Out and foreign economic activities, as well as global ‘land-grabbing’, will of course require deeper and more conceptual analysis – but it’s clear that the case of Russia’s Far East has much to add to the debate. Certainly, this is not the caricaturized case of a ‘weak’ state subjugated by a rapacious economically dominant one (a rather unhelpful framework; see Danielle Tan 2012). And it also does not seem that Chinese agricultural investments negatively contribute to local Russian food security or siphon off jobs – in fact, the opposite may be the case (see Anatolii M. Shkurkin 2002). Layered upon this are also Russia’s domestic politics and geopolitical considerations, which have resulted in policies towards Chinese investment and migration that are ’tangled and fickle’ to say the least.  In September 2012, the Minister of Development of Russian Far East Viktor Ishayev outright stated that in the field of agriculture, Russia prefers cooperation with Japan and South Korea to working with China. In 2013, Chinese agricultural workers have also been effectively banned from working in certain areas (the Amur and Krasnoyarsk regions, among others) for use of harmful chemical additives.

Anbound Consulting: Africa will solve China’s problems

On 15 January, the Peking consultancy Anbound released a report that argues that a Chinese “Marshall Plan” for Africa would not only solve China’s problems of an industrial transition (by offshoring labour-intensive low-tech industries and by creating markets for outdated products) but also slow the yuan’s inflation by creating a pool of the currency in Africa.

None of the suggestions are original in themselves — nor is the recommendation for China to radically increase funding for research on Africa and exchanges with African NGOS — but Anbound proposes all this under a comprehensive ten-year, $400bn government- financed plan that would help the expansion of Chinese exports and manufacturing. The last of the 12 recommendations is facilitating family migration in both directions: in China, African migrants are to rejuvenate an aging labour force, while in Africa, Chinese are to bring capital, technology, and kn0w-how. The price label, and of course the advocacy of a comprehensive plan that includes migration, is exactly what suspicious Western critics have always feared: a grand Chinese strategy to take over Africa.

I am not sure what Anbound’s standing in China is. It is very unlikely that the government will take their advice, but I would be curious how widely shared such views are in policy circles.

 

 

Chinese review of The Silent Chinese Conquest

The English edition of Heriberto Araujo and Juan Pablo Cardenal’s The Silent Chinese Conquest, which was apparently published under the title China’s Silent Army, has been reviewed by Bristol University psychology lecturer and blogger Zeng Biao, who also owns a consultancy on Chinese-British relations, for the newspaper 21st Century Economic Herald. Zeng notes the author’s “betrayal” of their interviewees, the Chinese entrepreneurs and managers who proudly showed them around their businesses, but add that such betrayals are the stock in trade of “political and social affairs journalists”. He adds that he feels some empathy for the small traders the authors describe, and wagers that,

if China’s global influence continues to increase and develop bit by bit, as it has, then history’s take on these Chinese peddlers will surely be full of the humour and intimacy of today’s British writings on the East India Company.

Overall, Zeng’s opinion of the book is favourable; his “only regret is that it was not written by Chinese.” And, “in order to avoid more regrets,” he recommends that it be published in Chinese.

Does Zeng agree with the authors’ alarmist tone and sees it as a positive thing, as some Chinese nationalists tend to do with Western books warning of China’s “rise?” Or does he agree with the warning, that the “silent army” has dire consequences in terms of crime, environmental hazards, exploitation and so on, as well? Or does he simply think the authors’ research deserves discussion? This is not clear.

 

Chinese Muslim traders in Cairo

A short article by Su Junxia and Daniel Krahl recently drew an interesting sketch of Chinese Muslim traders in Egypt. As elsewhere in Africa, Eastern Europe and other low-income countries, there is a fairly large number of Chinese traders in Egypt who sell low-price consumer goods, mostly fashion. According to an earlier report by Heriberto Araujo and Juan Pablo Cardenal, some of them run garment workshops and many sell clothes door-to-door.

But Su and Krahl highlight a population of Chinese businessmen and -women who are Muslim, and many of whom came to Cairo to study Arabic or religion. Yet for most of them, these are not ends but instruments to build business networks and eventually head home: “their first chance to really take part in the Chinese economic miracle.” In other words, their motivations seem no different from their non-Muslim peers. They, too, often find Egyptians “uncivilised”.

This is clearly not an in-depth study, but to the extent that it is correct it is a reminder of the limited ability of transnational networks to erode the power of the national imaginary, in China perhaps more than elsewhere. What I read reminded me of Antonella Diana’s study of the Dai in Sipsongpanna, Yunnan, whose reconnecting with ethnic kin across the border in Laos resulted not in weaker but in stronger identification with the Chinese nation, which seemed by comparison strong, prosperous and modern. Chris Vasantkumar’s work indicates that such reactions are not entirely absent even among Tibetans who move between Tibet and India.

New guide on social responsibility for Chinese contractors abroad

The China International Contractors Association released its Guide on Social Responsibility in September. The text, which is bilingual and clearly adapted to the lingo of international CSR, mostly sticks to generalities and exhorts companies to obey laws — for example, by paying taxes (article 4.7.3).

Nonetheless, some parts go beyond the language we have been used to. For example, article 4.2.1 recommends treating job applicants of “different ethnicites, genders, races, nationalities, age, religions, disabilities, marital status and sexual orientation equally.” Such language is unusual in China, and although hiring disabled candidates in the construction industry may not be very realistic, it is nonetheless a nice idea. The same article also advises against the use of child labour, but since this is illegal in China, it is already covered by the Chinese government’s requirement that Chinese companies abroad comply with Chinese as well as local laws. Article 4.4.3 recommends localised procurement, and article 4.4.2 advises incorporating CSR standards into subcontracting arrangements.

According to International Rivers’ (IR) useful guide to the state of China’s international dam building industry, The New Great Walls, an updated version of which has just been released, Sinohydro’s 2011 policy, developed in consultation with IR, goes far beyond these guidelines: it adopts the World Bank’s principles on infrastructural projects, mandates “community” consultation and access to social and environmental impact assessments, commits  to a dialogue with NGOs, and requires at least equal income and livelihood levels for those displaced by projects. It also required informed consent by “Indigenous Peoples” where applicable, an interesting fact as China is not a signatory to the UN convention on indigenous peoples and the term is not used in China.

According to The New Great Walls, there were “at least 308 dam projects … in 70 different countries” being built with the help of Chinese contractors or financiers as of August 2012.

http://www.internationalrivers.org/resources/the-new-great-walls-a-guide-to-china%E2%80%99s-overseas-dam-industry-3962

News reports on North Korean workers

Stories on foreign labourers — from Vietnam, Burma, and North Korea — have been circulating in Chinese media for some years (see an earlier post here). The news aggregator World-Story has made a compilation of recent media stories, some of them focusing on North Korean workers. This was occasioned by reports in South Korean media suggesting that North Korea was planning to send 120 thousand guest workers to Northeast China before the end of the year. The articles, reprinted in Chinese papers, suggested that these workers, including ICT specialists, had originally worked in South Korean-invested enterprises in the North but lost their jobs after the deterioration of North-South relations.

Global Times writes that a Singapore suit maker has moved its garment factory from Pyongyang (!) to Dandong, on the Chinese side of the Yalu River, where power supply is more stable, but continues to operate with over 400 North Korean workers. A Taiwanese investor based in Shanghai is also planning to open a factory in Dandong and hire North Korean workers. These workers earn around 1,500 yuan a month, compared to between 2,000 and 3,000 for Chinese workers. This figure, however, is a fiction because the workers themselves only get 150 to 200 yuan, while the rest goes to the North Korean government. (Another article, in 中国经济周刊, suggests a less drastic cut of 60%.)  It appears that the workers are mostly women, and according to the article, there are over 20 thousand of them in Dandong.

Although North Korean regulations only permit North Korean citizens to work in North Korean-owned businesses abroad, the article says that some of the workers have trainee visas. Dandong reached an agreement with North Korea that allows the workers to extend their visas without returning to North Korea. The workers are not allowed to leave the premises of the factory or to change employers. According to an article on 经济观察网, Dandong is “in the process of establishing a plan for North Korean labour.”  Two other border cities, Tumen and Hunchun, are said to have plans to bring in 10 to 20 thousand North Korean workers on intern visas, apparently modeled after the Japanese and South Korean systems that also use this euphemistic visa to bring in labourers. In fact, Hunchun apparently signed an agreement back in 2010 for 2,000 North Korean workers, and Tumen has set up a North Korean Industry Park 朝鲜工业园, with the North Korean ministry of trade and a company from Hebei Province as partners. But none of the articles reports any evidence yet of a massive influx of North Korean labour on the scale mentioned in the South Korean reports; in fact, applying for North Korean workers is described as a complicated process that sometimes ends in rejection.

The articles show how, at a time when China does not have a national immigration system, various municipalities are beginning to experiment with their own systems. The regime that seems to be in the making with North Korean workers is an extreme example of the type of exploitative labour migration regimes, in force in Singapore, South Korea, and Japan, that deprive workers of most rights while maximizing profits and minimizing the burden on the states involved. It is also another example of the logic of exception, i.e. the suspension of prevailing rules and protections in particular areas, that has been crucial to China’s development since the creation of the Special Economic Zones in the late 1970s.

At the same time, it is clear that as Chinese cities pursue such arrangements, they will be running against central interests. While Dandong hopes to create a new industrial boom on the backs of cheap North Korean workers as industrial wages go up in China, the central government is concerned about the potential for social unrest if there is an impact on Chinese wages or employment.

Finally, just as Aihwa Ong has suggested that the thrifty and self-providing Asian immigrant has become the ideal subject of the American economy, in neoliberal times the North Korean (and the Vietnamese) migrant seems to have become the model worker for China: self-disciplined, well-organised volunteering for overtime without being asked to, doing the work of two Chinese workers — or so the Chinese entrepreneurs cited in the articles say. “Most importantly, they are honest workers who don’t try to bargain,” one said. The idolization of North Korean workers comes at a time when Chinese workers are increasingly prone to strike for better labour conditions and higher wages, not only in China but also abroad. The recent illegal strike by Chinese bus drivers in Singapore for equal pay made headlines as the first in 25 years. In such conflicts, media in China is increasingly likely to take the side of Chinese nationals and demand better protection for them, as in this report on China Radio International.So China is becoming a source both of particularly onerous examples of the “East Asian migration management model” and of challenges to it.

Re-reading The Star Raft

Philip Snow’s The Star Raft is not often cited in today’s China-Africa literature, but it remains the most enjoyable volume in it. Snow is an engaging narrator without being superficial; his prose is erudite and unmistakably “posh” (he is the son of a peer, after all!), yet plain. He relies on a wealth of references that are nonetheless discreetly tucked away (few academics dare write in this way any more). At the same time, he has a clear sympathy for China (a very different China than that of today) that always avoids being dogmatic or breathless in the way some commentary today is. And Snow is emphatic about his “overriding concern with human exchange” (p. xvii), as much of today’s literature is not.

I am re-reading the book for a class I am co-teaching, and am struck by the prescience of the preface, written in 1987 — except on the subject of South Africa:

…[R]ight up to the mid-1970s [...] observers predicted the arrival of Chinese warships in the ports of [...] the East African coast. [...] Today, in the late 1980s, it is difficult to remember that the alarm was once so great. [...] Europe and the United States have come to regard [China] as an amiable semi-ally in their confrontation with the Soviet camp. Africa [...] has not found strength or unity, and it has not been able to free itself from Western influence. Most of its states continue to be economically feeble and sustained by constant transfusions of European and American aid. [...] Neither China nor Africa seems likely, in the near future, to disturb the West’s repose.

But the quiet may be misleading. [...] the process of modernization in which [China] is engaged will enable it, in the end, to assert its will far more effectively [...] Africa may not always be weak. The continent may look a very different place, for example, when the apartheid regime in South Africa finally collapses and is replaced by a black-ruled state, rich, powerful and equipped with the nuclear arsenal which the defeated white minority will probably leave behind. And as African countries slowly become more stable and more prosperous, their leaders can be expected to grow increasingly impatient with the continent’s unhappy state of disunity and dependence on Western funds and advice. [...]

We are going to have to accept the fact that the various non-Western peoples are likely to come together with increasing frequency: that they are likely, more and more, to question the disproportionate share of the world’s decision-making power and resources which we — and the Soviet Union — continue to enjoy. [...] From this point of view we shall be well advised to follow with some interest the expansion of contacts between all parts of the Third World. Will Brazil step up its growing economic role in Africa? Will the Arab states live up to the pledges they have made to use their oil wealth to give a political lead to the poorer developing countries? [...]

The Third World peoples will certainly have little hope of destroying our supremacy unless they can make a success of working together — not just as governments or companies but as individuals too.