Thursday, February 9, 2012

Investment News and Commentary from Emerging Markets in Asia - China, India and ASEAN





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Russia, China, Korea to Develop Eastern Russia Seaboard

Feb. 12 – The governments of Russia, China and Korea are considering redeveloping old trade and sea routes found on the Russian east coast and providing shipping links and ferry services.

Up for redevelopment would be the Russian eastern port of Zarubino, in Russia’s Primorsky-Krai Province, although run down could be developed to become a regional port hub. Zarubino already has a ferry service to Sokcho in North-Eastern South Korea.

There are also calls to improve the immigration facilities at Kraskino, which lies near the border between Russia, China, and North Korea on Posyet Bay, south of Vladivostok. Additional steps are also being taken to examine the improvement of the Hunchun-Makalino rail link which links China and Russia.

Zarubino and Posyet are Russia’s two southern-most ports on its eastern seaboard, and conversely the two furthest (with the sole exception of Vladivostok) which remain ice-free during the winter.

The measures are still being discussed since the development would provide stability and generate more business for the region. A few years ago, China sought to lease the Zarubino Port from Russia since the 10 mile wide strip that extends down the eastern seaboard prevents easy access to sea transportation facilities for Heilongjiang and Japanese and Korean exports.

Heilongjiang businesses have had to send products south to Jilin Province for export via Dalian adding to transport costs. Freight can be sent via Zarubino but facilities are poor and an upgrade would cut travel for products to just four hours from China to either Zarubino or Posyet for export.

There is also an option to develop Zarubino as a northern version of Hong Kong with tax breaks and duty free facilities. This would boost business in the area and assist with persuading nearby North Korea to pursue more economically viable means.

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