China and the World

Building bridges

What does Russia’s slow progress on a transport link to China reveal?

Crane w

We've built our bit

In 1868, Russia launched the Manza War. The conflict was intended to purge the territories Russia had acquired from China of the Chinese people still living there. In Vladivostok, the Russians attempted to shut down local gold mining operations and evict the Chinese that ran them.

Today, the authorities in Vladivostok have had a change of heart, and are instead looking to entice Chinese visitors and investors to a land they were once cast out of.

On September 4, Vladimir Putin opened the first Eastern Economic Forum (EEF) in Vladivostok, one of the 15 areas that he granted “free port” status in July. The Russian president said the forum was to offer “potential partners genuinely exclusive opportunities and incentives in the far east” of Russia.

Putin also boasted of the projects that Russia had already co-financed with foreign investors. One showpiece is the Nizhneleninskoye-Tongjiang Bridge, or the Amur Bridge. In his EEF speech Putin claimed that Russia had taken the decision on funding for construction on the bridge linking Russia and China.

However, the view from the Chinese side has been very different.

The bridge in question crosses the Heilongjiang River, known as the Amur River in Russia, and connects Tongjiang in Heilongjiang with Nizhneleninskoye in Russia.

The Chinese and Russian government agreed to co-invest in the 2,215-metre piece of infrastructure, with China responsible for financing and building up to 1,900 metres of the bridge in Chinese territory.

Recent reports from Chinese media have raised concerns as to whether Russia will follow through on its own commitment.

According to website Guancha, Chinese contractors have largely completed their 1.9 kilometre section of the bridge but construction stops abruptly at the other side of the river, as their Russian counterparts have yet to begin work.

A Global Times reporter used a telescope to take a closer look at what is happening on the Russian side last month. The finding? No one is there except a scarecrow.

Sina Finance reports that discussions regarding the bridge were first initiated over 20 years ago, but construction only commenced in 2013. Since that time, Xi Jinping has launched his “One Belt, One Road” initiative and in 2014 bolstered it with a $40 billion investment fund. According to iFeng.com, Russia has received investment from this fund, partially to help it complete the bridge, but has yet to clarify what portion will be used in the project.

Another Chinese entity is hoping things will go more smoothly with its own punt on Vladivostok. In this case the investment is in a new casino, with Macau gaming mogul, Lawrence Ho, its primary investor. According to the Financial Times, the management of the new Tigre de Cristal casino expects Russians to account for 80% of the venue’s footfall, but for Chinese money to constitute 80% of the yield, indicating a major bet that Chinese high-rollers will arrive to gamble in Vladivostok. But even this casino project was delayed (twice) as the Russian bureaucracy failed to deliver permits, forcing construction to stall.

This explains the growing impatience on the Chinese side. The governor of Heilongjiang, Lu Hao, has even complained that Russia’s lack of resolve to complete infrastructure projects is what infuriates Chinese investors.

The Amur Bridge is designed to have an annual cargo capacity of 21 million metric tonnes, and it is estimated that it will save $6 per tonne on the current cost of traversing the border, with investors seeing a positive return on their money seven years into its operation.

But with Russia yet to begin work on its portion of the bridge, that wait might be a little longer. Currently the Amur project stands as a powerful warning of what can go wrong in Sino-Russian partnerships.


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