MINISTRY FOR THE DEVELOPMENT OF THE RUSSIAN FAR EAST PRESENTS CHINA WITH DEVELOPMENT MODEL FOR PRIMORYE-1 AND PRIMORYE-2 INTERNATIONAL TRANSPORT CORRIDORS
15 April 2016
During talks between China and Russia in Beijing, the latter’s Ministry for the Development of the Russian Far East presented its hosts with its vision for the development of the Primorye-1 and Primorye-2 international transport corridors, according to a report on the Russian Ministry’s website.
Russia was represented at the talks by the Ministry for the Development of the Russian Far East, the Far East Development Corporation, and the Far East Development Fund. The Chinese delegation included representatives of the National Development and Reform Commission, the China Overseas Development Association, and the China Machinery Engineering Corporation.
According to Alexander Krutikov, Department Director at the Ministry for the Development of the Russian Far East, the financial and economic development model created by Russian experts for the international transport corridors in the south of Russia’s Primorsky Territory will benefit both sides in the dialogue. The establishment of new transport corridors from China’s Heilongjiang and Jilin provinces to the Russian ports of Nakhodka and Zarubino respectively will lead to a noticeable reduction in costs for Chinese businesses: “the savings for Heilongjiang and Jilin provinces alone will amount to up to USD 1 billion every year.” The Russian Far East, meanwhile, will see a severalfold increase in freight traffic from the two Chinese provinces, whose economy amounts to almost 60% of Russia’s.
An agreement was also reached during the talks to set up a joint management company to develop the transport corridors. According to Mr. Krutikov, Russia will have the majority stake in the new company. On the other hand, China will provide 80% of the funding for the associated infrastructure facilities, while Russia will provide just 20%. The project has a forecast payback period of 10 years.
It is expected that the Export-Import Bank of China (China Exim Bank) will play a role in the creation of the joint management company.