Russian President's Visit May Boost China Trade

For Yeltsin, whom Chinese leaders once branded the `new czar,' the visit is a chance to bolster Russia's growing trade with China

EAGER to boost trade and arms sales to China, a beleaguered Russian President Boris Yeltsin arrives here Dec. 17 to build new ties to Russia's rival neighbor.

Mr. Yeltsin's three-day visit, which includes Beijing and a jaunt to Shenzhen in China's booming south, is expected to launch a new era of cooperation. Following the collapse of the Soviet Union, Russia was thrust into a tumultuous transition, and China, the world's last remaining communist power, plunged into an ideological crisis.

Arkady Volsky, a leader of the centrist Civic Union political movement in Russia, said Moscow could benefit from China's experience in several fields of economic reforms, particularly land management and agriculture, the use of special economic zones, and the utilization of foreign aid.

"China has been able to feed more than a billion people on its own," Mr. Volsky told reporters in Moscow. "We must study their methods."

With both countries' economies undergoing major change, the leaders are expected to soft-pedal ideological differences and strengthen their complementary economies with up to a dozen economic agreements involving trade, science and technology, nuclear power, and other energy generation.

For Yeltsin, whom Chinese leaders once branded the "new czar," the visit is a chance to bolster one of the few bright spots on a dismal Russian economic horizon. It comes in the wake of a tense domestic political battle which led to the downfall of his designated prime minister on Dec. 14. For Beijing, stronger links to Russia sustain a steady flow of technology and weapons to modernize China's People's Liberation Army and provide momentum in the country's transition from a planned to a market economy.

"Sino-Soviet relations ... have gone through a lot of twists and turns in the past decade," says a Chinese analyst who is an expert on the former Soviet Union. "On the whole, relations were bad, and the Chinese have become wiser. The leaders on both sides have drawn a lesson from the past."

Unfettered trade between the neighbors along their 2,690-mile border, and growing arms sales driven by Russia's need for hard currency and China's hunger for sophisticated weaponry have anchored the new Sino-Russian links.

Although Russia's global exports and imports are sagging, bilateral trade with China in the first 10 months of 1992 is expected to reach $5.4 billion, surpassing the level between China and the former Soviet Union. More than $3 billion of that occurs in direct border trade between regional officials and companies in Russia and Chinese enterprises. The countries plan to increase the current number of 19 border crossing points.

Despite growing concerns in the US and other Western countries, both sides say they will pursue growing military ties. Russia would receive cash, food, textiles, and consumer products, and China would get arms, and technology in metallurgy, power generation, and space exploration.

Russia is expected to agree to supply a nuclear power plant in Liaoning Province and another power station in the fast-growing province of Guangdong in China's south. Already, China has received 26 SU-27 combat aircraft and is looking to add 10 more, as well as 24 MIG-31 interceptors, missile-guidance technology, rocket engines, and technology to enrich uranium.

Western experts predict that arms sales to China could top $2 billion by 1994. As of October, credit provided by China to Russia totaled $1.07 billion, with Russia reportedly considering selling $500 million in military equipment and technology to pay off the debt in part.

"I think it is quite natural to consider this cooperation as an integral part of our relationship," says Russian Ambassador Igor Rogachev, adding, however, that Russia has to "remember the balance of power in the Asia-Pacific region."

He said the two countries also will sign an agreement establishing procedures for Russian experts, particularly thousands of scientists lured to China in recent years, to work here.

Desperation, in the form of a shortfall in Western aid, has forced Moscow to pursue its long-neglected ties to Asia.

"There's a change in the Russian perspective toward Western aid. They have realized that it is important to develop a policy of self-reliance," says Zhang Huanwen, a Russian specialist at the Beijing Academy of Social Sciences. "This is a welcome sign. But it will be a very long time before Russia can change its system of the last 70 years of eating from the same big pot."

In turn, both countries have pursued negotiations to resolve boundary disagreements, largely driven by mutual fears of turmoil in the former Soviet republics of central Asia, which reportedly is spilling over into China's western province of Xinjiang.

"Central Asia is the middle ground between China and Russia," a Chinese expert says. "Both China and Russia think it is important to stabilize Central Asia in the face of a resurgence of Islam."

Yet while Russia's arms trade benefits China, Chinese analysts say Russia's hunger for hard currency will lead it to sell arms its rival Taiwan, one of Asia's most lucrative arms markets.

"Taiwan's economy is very tempting to Russia," a Chinese observer says. "There is the possibility that the central government will lose its control of arms sales because different military regions can do what they like."

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