Chinese Entrepreneurship and Russian–Chinese Border Development in the Context of Global Regionalism

Introduction

The role of Chinese entrepreneurship in the development of Russian–Chinese border ties in the context of global regionalism is a complex and multifaceted issue. Chinese entrepreneurship has played a significant role in the development of the Russian Far East, a region that shares a long border with China. The Chinese government and businesses have been investing in the region, building infrastructure, and establishing trade and economic ties with local Russian businesses.

Chinese entrepreneurship has diversified the supply of regional public goods, such as improved transportation and communications networks, which have facilitated the movement of people, goods, and capital across the border. This has led to increased economic activity and integration between the two countries, to the benefit of not only local communities but also the global economy as a whole. Moreover, Chinese entrepreneurship has eased trade in products and services and contributed to the growth of regional value chains. This has led to increased economic growth and development in the Russian Far East, which has been a significant contributor to the region’s outward-oriented development strategy.

However, there are also challenges associated with Chinese entrepreneurship in the region, such as concerns over the unequal distribution of benefits, the potential for overreliance on Chinese investment, and the need for greater regional cooperation to address transboundary issues.

Currently, there is a strengthening of migration flows between countries and regions worldwide. Representatives of one ethnicity are moving not only within their own civilizational enclave but also becoming part of other ethnic societies and state entities. This mobility carries both positive aspects and a number of serious challenges and risks for the receiving society. Therefore, research focusing on analyzing the distinctive features of migrant integration into a new society and their interaction with the indigenous population is particularly relevant today.

For the past 30 years, the Russian Far East has seen the presence of representatives of a completely different (non-Slavic) civilization — steady streams of citizens of the People’s Republic of China have settled here. Chinese migrants engage in various economic activities in the Russian Far East region, as labor migrants and tourists, interacting daily with the Russian population. One component of labor migration is the presence of Chinese entrepreneurs on Russian territory.

Theoretical Framework and Methodology

This paper studies the characteristics of Chinese ethnic entrepreneurship in the Russian Far East in the process of interregional Russian–Chinese interaction, with a focus on the dynamics of Chinese entrepreneurship in the Russian–Chinese border region, including the development of trade, investment, and cultural exchange. The study also examines the challenges and opportunities faced by Chinese entrepreneurs in this region, as well as the strategies they employ to overcome these challenges.

In the late 1980s, the opening of borders in the Russian Far East led to the unfolding of multifaceted cooperation with a rapidly developing China, interacting at various levels with representatives of Confucian civilization. Chinese entrepreneurship in the Russian Far East has become one of the directions of this interaction, playing a significant role in the development of the Far East. A detailed and comprehensive study of this phenomenon allows for a deeper understanding of the trends that have emerged and the potential prospects for further development of Russian–Chinese relations. Studying entrepreneurship in the Russian Far East is also important for shaping intergovernmental and regional policies toward China and understanding the specifics of the life and activities of Chinese migrants in the host society.

The economic, business, and domestic relationships that have developed between Chinese entrepreneurs and the Russian population can be analyzed within the conceptual framework of “ethnic entrepreneurship,” a term widely used in sociology and economics. The issue of ethnic entrepreneurship was first addressed in the early 19th century by the German historian Werner Sombart, who suggested that certain peoples possessed special “moral forces” that enabled them to engage in entrepreneurial activities successfully.¹ To date, there have been numerous studies in sociology and economics dedicated to the issue of ethnic entrepreneurship. For instance, Robert Waldinger examined the phenomenon of ethnic business in the context of mass migration processes that began in the second half of the 20th century, closely linking the development of ethnic entrepreneurship to immigration waves. Waldinger proposed an interpretation of “ethnic entrepreneurship” where the success of migrants lies in their exploration of vacant market niches, rather than gradually displacing local entrepreneurs due to inaccessible group mobilization or intense competition.² Ivan Light and Stavros Karageorgis emphasized that ethnic economy primarily reflects the nature of immigrants’ employment in the host society and their independent efforts to sustain themselves.³

By analyzing existing concepts in this field, several criteria of ethnic entrepreneurship can be identified: the “ethnicity” of business — internal closure, the priority of ethnic affiliation among business partners; the absence of a “strict” attachment of product consumers or hired workers of ethnic entrepreneurs to the same or similar ethnic group; a tendency toward specific economic activities (often trade); occupying vacant market niches and self-sufficiency (or self-employment) as the sole means of earning a living. “Ethnic entrepreneurs” are those who base their business on the utilization of ethnic resources and ethnic networks.⁴

The Rise of Ethnic Entrepreneurship in the Far East

The formation of ethnic entrepreneurship in the Far East is directly determined by the ongoing migration processes. In the 1990s, the migration landscape in the Far East underwent significant changes. In 1992, an agreement on the visa-free crossing of the border was signed, which coincided with a critical period for Russian domestic consumer markets, the abolition of monopoly and liberalization of foreign trade, the collapse of the Soviet Union, and the formation of the Russian Federation. As a result, a large number of Chinese entrepreneurs, tourists, and contract workers appeared in the Far East.

In general, entrepreneurs from China can be divided into two groups: qualified businessmen and beginners. The former usually open businesses in Russia and engage in large-scale commercial activities, while the latter engage in trade at marketplaces. The former are experienced businessmen who already have successful businesses in China, necessary connections in both countries, and have demonstrated themselves as energetic and active entrepreneurs in Russia, capable of profiting from Russian–Chinese trade and increasing their social and property status. Accordingly, they are more demanding in choosing trading partners and conditions in the host country. However, most of them rent apartments or live in hotels, as they are wary of buying real estate in a foreign country. Typical characteristics of such Chinese traders are: (1) middle or higher education; (2) successful business experience in China; (3) experience in the public sector; (4) connections established during business or public service work; (5) a desire to conduct a multi-profile business, mobility, and use of all available connections in Russia and China.

The constant massive influx of Chinese traders, combined with cheap labor, has led to the formation of stereotypical perceptions of the so-called “yellow threat.” Since the early 1990s, there has been an increase in the number of articles in the central, far eastern, and even Siberian press dedicated to Chinese expansion in the far eastern region. Numbers of 40,000, 100,000, 150,000 Chinese who have illegally entered Primorye, and from 400,000 to 2 million in the Far East, have been mentioned. The foreign press has reported on “daily tensions” between Russia and China in the Far Eastern markets.⁵ Fears of Chinese expansion in the Far East have arisen despite the fact that the number of Chinese citizens present, for example, in Primorsky Krai (also known as Primorye) in 1996–2001, was unlikely to exceed 0.3–1.5% of the local population. These migrants came mainly to earn money and legally crossed the border as tourists. According to data from immigration and border services, 52,000 people entered Primorsky Krai in 1997, 73,000 in 1998, 80,000 in 1999, and 42,000 in the first half of 2000. In each of these years, less than 500 people from them did not return to China.⁶ The apogee was rumors of an impending armed attack by China on Russia, spread in Primorye in 1995.⁷

It is known that there was no attack by the Chinese on the Far East. It is clear that most Chinese, who were in Russia for the purpose of entrepreneurial activities, saw it as a temporary place of stay and a place for capital accumulation. Even those Chinese entrepreneurs who were in a “semi-legal” position could not stay for a long time outside the view of law enforcement agencies or merge into the mass of the predominantly Slavic population. Therefore, there is no need to talk about any real threat to the demographic and social situation in the region.

For Russians living in the Far East, the presence of Chinese has always been an important social factor, and in the late 20th and early 21st centuries, it became a reality of everyday life. The beginning of the 1990s was a time of “cultural shock” from the sudden encounter with the Chinese population and the resulting opinion of Chinese expansion in the Far East. “Dirty, uncivilized, uncultured, unreliable Chinese as the main characteristics of the nation — these are the first impressions that the population of the Far East received from mass contacts with the Chinese, mostly representing the peasant strata of Northeast China, in the late 20th century … A public opinion poll conducted by the Institute of History in the fall of 1994 in the southern Far East of Russia showed that 62% of the population fully or partially agree with statements about Chinese expansion in the Far East of Russia, with the highest degree of agreement among the most informed: the intelligentsia (81%) and people with higher and secondary specialized education (77%). 33% of those surveyed have a negative attitude towards the very fact of the presence of Chinese on Russian territory, and 40% of them consider the intention of Chinese to stay in Russia for permanent residence completely unacceptable.”⁸

However, one cannot ignore the socioeconomic context of the events. First, the impressions of the encounter with the Asian neighbor were superimposed on a negative emotional background (events at Damansky,⁹ Soviet ideological clichés about “Chinese aggression”). Second, the wave of Chinese migration accompanied ambiguous Russian reforms. “The presence of Chinese became part of the reality, which included political upheavals, the collapse of production, monetary reforms, privatization, voucherization and other phenomena that sharply increased the degree of negative attitudes of the people. In ethnic self-consciousness, the experience of meeting with Chinese merged with the experience of social crisis.”¹⁰ Third, Russians, unprepared for the encounter with a fundamentally different culture, and also due to the impossibility of overcoming the language barrier, often perceived Chinese behavior — loud speech and public spitting — as uncultured and annoying. However, the sinologist Alexey Maslov explains such behavior differently: this is “not a violation of any rules of politeness, but simply — folk traditions and habits, some of which are associated with ancient beliefs. For example, saliva must be spat out, as it contains ‘dirty’, or ‘used up’ energy — qi.”¹¹

However, overall, the activities of Chinese entrepreneurs did not cause protests from the local population. There were no mass conflicts in border regions — individual conflicts had a domestic character. The inhabitants of the Far Eastern borderland, who have traditionally coexisted with the Chinese for centuries, generally did not fear their assimilating influence and respect them as a working nation.¹²

Undoubtedly, the entrepreneurial activities of Chinese migrants on Russian territory also included criminal factors. For instance, in the “Memorandum on the Social and Political Situation in the Far East in the Places of Residence of Chinese Migrants and Trends in Its Development,” it was noted that during 1992–1993, the social and political situation in the places of residence of Chinese migrants in the Far East had become significantly tense. It was emphasized that the export of foreign labor from China to the Far East was accompanied by an active desire of Chinese citizens to acquire Russian citizenship, participate in the privatization of housing, industrial facilities, and land plots, and strengthen their criminal infiltration into commercial structures and interaction with local corrupt elements, while Chinese poachers freely hunted on Russian territories. At present, mobile armed groups of specialists for combating Chinese poachers are being formed in various districts of Primorsky Krai. However, it will not be easy to fight them, among other things, because in some districts of the Far Eastern regions, the number of Chinese citizens exceeds the number of local residents. For example, in the Border and Partizansky districts of Primorsky Krai, 15,000 Chinese citizens live illegally, while the number of Russian citizens is only 7,500. Instances of hooliganism by Chinese citizens in public places in the cities of Khabarovsk and Vladivostok, including the beating of police officers, have also occurred.¹³

Alarmist sentiments among the Far Easterners were caused by several factors, including the massive influx of Chinese migrants, their mobile cross-border movements, and the rapid takeover of vacant economic niches, which was a kind of “cultural shock” for the residents of the border region, who had been closed to external (and in some areas, even internal) migrations until the end of the 1980s. The social and economic life of the Far Eastern society firmly incorporated a new element — Chinese migrants, who were poorly accounted for by official statistics, which deepened the distrust on the part of local Russian residents. Nevertheless, the Far Easterners actively used the services of Chinese entrepreneurs, and in the complex social and economic conditions of the late 20th and early 21st centuries, Chinese goods were in high demand among Russian consumers. However, a certain part of Russian businessmen suffered losses due to growing Chinese presence, as the prices of Chinese goods were too low, and imports from European countries and the European part of Russia were largely unprofitable. Therefore, local Russian entrepreneurs used existing ethnic distrust to persuade regional authorities, who themselves did not want to play the anti-Chinese card, to restrict the economic activities of China. Influential trading and financial circles in Moscow also exerted pressure on the federal government, seeking to protect their markets from the penetration of Chinese traders.¹⁴

The Peculiarities of Chinese Adaptation

In the early 1990s, when Chinese were settling in Russia, they were ready to adapt to the bureaucratic reality of another country, and one of the adaptation mechanisms was fictitious marriages. Contrary to stereotypes, marriages between Chinese and Russian women were not of great importance for conducting business. Firstly, such cases were few. For instance, in 1997–1999, 17 Russian–Chinese families were registered in the Amur Region. In 1992–1997, 170 Chinese received a residence permit in the Khabarovsk Territory, and 27 people married Russian women during this period. In the Jewish Autonomous Region in 1998, only four Chinese citizens married Russians and received a residence permit. Second, international marriages only provided the opportunity to speed up obtaining a residence permit in Russia. In turn, this visa gave the foreigner certain rights for doing business in Russia, but, considering the absence of legislation on cross-border business, marriages did not provide any special privileges and advantages. According to statistics, in 1992–2006 (for 15 years), 17,000 Chinese lived permanently in Russia, either with Russian citizenship or a residence permit. In 1995, 26 Chinese migrants received a residence permit in Primorye, and by the end of 1999, their number had increased to 46 people. In the Amur Region in 1991–1996, 99 Chinese received a residence permit, another 15 people received Russian citizenship, and another 28 married Russians. In the Khabarovsk Territory during this period, 170 people received a residence permit.¹⁵ However, for lawbreakers, even with a residence permit in Russia, deportation was applied.

Overall, the economic interests of Chinese migrants in Russia were rarely long-term, so they did not strive to understand the Russian cultural and linguistic reality. The motives for their presence on Russian territory were somewhat different: “all Chinese migrants oriented towards permanent residence in Russia say that they have become accustomed to living here. More than 92% are confident that it is easier to earn money in Russia than in China and other countries. Finally, around 89% of respondents want to stay in Russia because there is work here....” Compared to the early 1990s, the intentions of Chinese migrants in Russia have changed. At least, this applies to that part of Chinese migrants who have successfully adapted to the Russian labor market.¹⁶

In interviews with Chinese entrepreneurs, respondents cited rich resources, such as land, forests, mineral products, as a reason for choosing the Russian Far East as a territory for business. On the other hand, the Russian Far East lacks sufficient labor. There are many opportunities to build a profitable business here. Another factor attracting Chinese migrants to the Russian Far East is the relatively favorable ecological situation: the absence of mass industrial production in this region and low population density, ecologically clean products, and significant natural potential from the Chinese point of view. Against the background of persistent ecological problems in China, such as water scarcity, air pollution, soil erosion, the Far Eastern region has emerged as a convenient and safe place for economic activities and living.

However, among the obvious challenges that seriously complicated the process of adapting Chinese to Russian conditions were problems with law enforcement agencies, communication with local residents, employment issues, engagement with officials and administration, and the absence of social security. It is also necessary to take into account criminal factors, which, in the eyes of some Russian observers, acquired threatening proportions: “Every fourth citizen of the PRC arriving in Primorsky Krai violates current legislation. Chinese citizens create stable criminal communities, engage in illegal activities, encroach on the national wealth of Russia, and also improve the infrastructure of intelligence operations against it.”¹⁷

However, it should be noted that the presence of Chinese on the border regions of the Russian Far East is an objective reality, and a significant portion of crimes committed by Chinese in the Far East belongs to the category of administrative offenses. “A lot of angry revelatory publications are devoted to the criminal activities of the Chinese, in which truth is mixed with fiction, often with a noticeable advantage of the latter, and which are read like fiction, written in the form of documentary prose. Partly, this phenomenon is explained by the understandable poverty of factual material, which the relevant authorities consider possible to share with the public, and partly by the obvious biases of the authors.”¹⁸ In fact, in the Amur Region in 1999, 69 crimes were registered, committed by foreign citizens and stateless persons, including nine citizens of the PRC. In the same year, 92 crimes were committed against foreign citizens, including 67 against Chinese citizens, who had often been victims of mercenary-related violent crimes.¹⁹

Despite the continuous presence of Chinese migrants in the border territories of the Russian Far East, the Chinese diaspora as a distinctive feature of ethnic entrepreneurship has not fully formed here. This can be largely explained by the proximity of their home country — migrants could return to China at any time, whether temporarily (for holidays, urgent matters, family problems, etc.) or permanently (business failure, legal issues, etc.). For example, crossing the border with China in Blagoveshchensk, Amur Region, takes only 30min. Therefore, Chinese migration to the Far East of Russia was characterized by a “pendulum effect.” The majority of Chinese residents in Russia viewed the country as a temporary place of residence, a platform for capital accumulation. According to surveys conducted among Chinese working in southern Primorye in 1995–1997, only 18% expressed a desire to settle in Russia.²⁰ Additionally, there are few job opportunities for Chinese migrants in fields other than entrepreneurship and labor in the Far East, except for employment in the education sector, as invited teachers in universities or private language schools. However, this activity is usually not very profitable, and many employees also engage in private entrepreneurial activities (typically trading and transporting Russian and Chinese goods in small quantities).

Chinese Migration as a Specific Type of Ethnic Self-Identification

Chinese migration to the Russian Far East represents a specific type of ethnic self-identification. The terms diaspora and community do not apply here, only the concept of “zemlyachestvo” (fellow countrymen) is suitable. This is because the notion of diaspora is usually associated with ethnic self-identification oriented toward returning to the homeland, while community implies ethnic self-identification subordinated to the interests of cultural and economic self-assertion and development. The concept of “zemlyachestvo” is a special type of ethnic self-organization that combines ethnic isolation from the host society with influence on it, establishing and expanding their socioeconomic positions in the new place of residence.²¹ Ethnic ties play a role in the initial integration into the new host community, where the support of relatives is necessary in finding housing, employment, and obtaining necessary documents. Over time, migrants begin to solve their problems independently and turn to fellow countrymen not for assistance but to socialize and celebrate national holidays.²²

Another characteristic of ethnic entrepreneurship is marginalization: migrants, having a strong social status in their home country, lose it upon relocation and are forced to switch to (usually) less skilled work. The social composition of Chinese migrants in the Russian Far East is heterogeneous, including students, employees, and entrepreneurs. Chinese scholars note that the education level of Chinese businessmen is generally not high, with less than 40% having higher or specialized education. Some have experience in administrative management, but they are facing the challenge of establishing businesses in the border regions for the first time.²³ The concentration of Chinese ethnic representatives in economic activities was associated with overcoming marginalization in a foreign linguistic and cultural environment.

The entrepreneurial activities of Chinese are linked to a hierarchy within the ethnic group. Chinese citizens of Russia or long-term residents who knew Russian at a native level and had extensive business and personal connections among both Russians and Chinese had an advantage over those newly arrived in Russia.²⁴ The social organization of their family and ethnic community life contributed to gaining advantages in relevant economic niches. The organization of entrepreneurship was based on the principle of “guanxi” (a Chinese term meaning “connections” or “relationships”). Guanxi facilitates decision-making between parties and plays a crucial role in building businesses both in China and on the international stage. It involves establishing strong connections through mutual assistance. Traders abroad are closely connected with traders in China, and any demand from buyers in any country is immediately transmitted to China to quickly find the necessary manufacturer or service.²⁵ Comparing the Russian concept of “blat” and the Chinese “guanxi,” researchers note that “guanxi” is neutral in society, and losing “guanxi” is perceived as a sharply negative phenomenon, while “blat” carries a negative connotation, and losing it often means a matter of life and death.²⁶

The guanxi conditions the existence of hierarchies within Chinese entrepreneurship, both in their formal and informal business practices. For example, shuttle trade could combine legal (e.g., importing clothes) and illegal (e.g., smuggling alcohol) behavior in the same transport channel. In addition, shuttle trade was used on a large scale to evade import taxes. In 1999, the volume of trade carried out by Chinese entrepreneurs was three times the volume of officially registered trade between Primorsky Krai and China.²⁷ At the same time, shuttle traders do not consider their economic activities illegal, despite the fact that they operate in a gray legal zone. As Tobias Holzlehner notes, “this is just an example of illegal transnational movements, because they challenge the norms and rules of formal political power, but they are quite acceptable, ‘legal’ in the eyes of the participants of these transactions and flows.”²⁸

In general, the economic interests of Chinese migrants in Russia are rarely long-term, so they do not seek to understand the Russian cultural and linguistic reality. The motives for their presence on Russian territory are somewhat different: “all Chinese migrants oriented towards permanent residence in Russia say that they are used to living here. Slightly more than 92% believe that it is easier to earn money in Russia than in China and other countries. Finally, about 89% of respondents want to stay to live in Russia because there is work here.”²⁹

Conclusion

Chinese entrepreneurship has played a significant role in the development of Russian–Chinese border ties in the context of global regionalism. It has contributed to the emergence of new regional public goods, the management of natural disasters and epidemics, the easing of trade in products and services, and the movement of capital and people. However, there are also challenges associated with Chinese entrepreneurship in the region, and it is important for policy makers to address these challenges in order to ensure sustainable and equitable development in the region. Issues such as language barriers, cultural differences, and legal restrictions have posed challenges for Chinese businesses operating in Russia. Nevertheless, the Chinese business community has been resilient and adaptable, finding ways to navigate these challenges and establish a strong presence in the Russian market. The Chinese diaspora in Russia has been a key player in facilitating cross-border trade and investment. Chinese entrepreneurs have established a strong presence in the Russian market, particularly in the retail and wholesale sectors. Chinese entrepreneurship has contributed to the development of infrastructure and transportation networks in the region. Chinese companies have invested in the construction of roads, bridges, and other infrastructure projects, which have facilitated the movement of goods and people across the border. The development of transportation networks has also promoted tourism and cultural exchange between the two countries.

The structure of Chinese ethnic entrepreneurship in the Russian Far East exhibits several characteristic features — the absence of a Chinese diaspora in the border territories, marginalization, and intra-ethnic support for business. For Chinese entrepreneurs, the Russian Far East is not a permanent place of residence but a stepping stone for further business development in their homeland and/or in European countries and the United States. However, Chinese entrepreneurial activities have become an integral part of Far Eastern society. The historical experience of Russian–Chinese interaction contributes to the formation of a generally tolerant environment in the border zone.

Notes