Lively Trade Springs Up on a Frozen Frontier. SINO-SOVIET ECONOMIC TIES

ON the frozen frontier of north China and Siberia, truck convoys rumble across the icy Heilongjiang River each day delivering beef, timber, and other goods in a mid-winter rush of trade. After dark, lamplights flicker at border checkpoints on the frosted river banks, as the stream of people and supplies between Chinese and Soviet border towns continues late into the night.

Once a little-known outpost, the Chinese city of Heihe, or Black River, is pioneering the revival of China's long-dormant economic links with the Soviet Far East. While engaged in a lively trade, Heihe has begun exchanging experts, workers, and tourists with Blagoveshchensk, a Soviet town across the river.

Heihe's awakening signals the eagerness of Chinese and Soviets to profit from more neighborly relations after 30 years of feuding.

``Local people are finding opportunities that were impossible to find in the past,'' says Oleg Troyanovsky, Moscow's ambassador to Beijing.

One of Moscow's chief aims in expanding Sino-Soviet economic ties is to tap Chinese resources to develop Siberia. Last year Soviet leader Mikhail Gorbachev called for boosting economic cooperation with China and Japan and announced the opening of Siberian coastal enterprise zones to lure Asian investment.

Similarly, China seeks Soviet technology and materials for upgrading its infrastructure and heavy industry, primarily in the northeastern region of Manchuria. Manchuria has lagged behind China's booming southern and coastal regions, which enjoy better access to foreign trade, investment, and technology.

Beijing and Moscow stand to gain from cooperation in key areas of compatibility. But obstacles imposed by their socialist systems ensure that commercial links with the West and Japan will remain more attractive.

Today the communist nations cooperate mainly through barter trade, which has increased 10-fold since 1981 to reach $2.7 billion last year. (The Soviet Union is China's fifth-largest trading partner.) The bulk of the trade is planned by government protocols negotiated yearly from official lists of imports and exports.

Yet trade is expanding most dramatically through informal deals along Sino-Soviet frontier, where dozens of towns have rekindled ties with Soviet neighbors. Border trade, revived in 1983 after a 15-year hiatus, leapt to $160 million last year, the Soviet trade office in Beijing says.

Although primitive, border trade meets local needs, says Lu Nanquan, director of Soviet Economics at China's Academy of Social Science. ``In summer, you can see Heihe farmers trading boatloads of watermelon for Soviet fertilizer,'' Mr. Lu says.

Beyond trade, Beijing and Moscow are eager to develop cooperation in labor export, technology, infrastructure projects, joint ventures, and tourism.

Last year China began exporting its cheap and abundant labor to Siberia, which has a manpower shortage. China's construction teams are now building housing in Siberia, its vegetable farmers are tilling Soviet fields in return for 60 percent of the crops, and its woodsmen are working in Siberian logging camps.

The Soviet Union plans eventually to employ up to 30,000 Chinese workers a year, Lu says. Last year more than 1,000 Chinese worked in the Soviet Union, and the figure is expected to rise to 10,000 this year, according to Chinese press reports.

In another area of cooperation, the Soviet Union is refurbishing outmoded Chinese factories that it designed and equipped in the 1950s. Iron and steel works, a paper mill, and a linen factory are slated for the upgrading, which may extend to more of China's 150 major Soviet-designed industrial plants.

The Soviet Union has also agreed to aid China in building new thermal power plants, power transmission lines, and electric railroads. Moreover, Moscow has offered to construct nuclear power stations in China, says Eugene Bavrin, the Soviet trade representative in Beijing.

China and the Soviet Union both view joint ventures as a major area for future cooperation, says Mr. Bavrin. Last year the nations agreed to jointly run two restaurants, an engine factory, and a shopping center, he says.

Sino-Soviet tourism began last year and is expected to grow in border regions. In December, the first ``sightseeing tours'' shuttled between Heihe and Blagoveshchensk. Tourists may not relish visits to World War II monuments, but shopping is popular.

Central Asian ethnic peoples make frequent trips across the border to visit relatives, says Bavrin. Some 14,000 people made such trips last year, he says.

Although Sino-Soviet economic ties have increased dramatically, serious problems remain. Bilateral trade today is only a third of its record level in 1959, Bavrin says, and is limited by what each side is able and willing to provide. Shortages in the Chinese and Soviet home markets restrict trade, which is 70 percent raw materials. ``The Soviets want all our soybeans, and we want all their chemical fertilizer, but such trade is impossible,'' Lu says.

Moreover, both sides hesitate to barter goods that could earn hard currency in other markets. Therefore the goods traded tend to be relatively cheap and of low quality, such as electrical appliances.

Another problem is that the Soviet Union, like Eastern Europe, runs a chronic deficit with China. But barter trade must be balanced, so China accepts Soviet and East European goods that it does not want. ``There isn't a great selection,'' says Lu. ``Take that Romanian furniture,'' he says, pointing to two wooden cabinets. ``It's useless. But the Romanians have nothing else to offer.''

The scope of Sino-Soviet economic cooperation is also constrained by the barter system, which requires that all Chinese laborers in the Soviet Union be paid in kind and not cash. Each country's lack of foreign currency precludes monetary trade.

Therefore, while China and the Soviet Union are likely to fill a niche in each other's economic programs, their cooperation is unlikely to threaten commercial ties with the West and Japan, which offer urgently needed high technology and investment.

``Chinese are not too enthusiastic'' about cooperation with the Soviets, Lu says. ``The door is open mainly to Japan and the West.''

You've read  of  free articles. Subscribe to continue.
QR Code to Lively Trade Springs Up on a Frozen Frontier. SINO-SOVIET ECONOMIC TIES
Read this article in
QR Code to Subscription page
Start your subscription today