China scoops access to Russian waters

Published on
December 5, 2014

A Chinese pelagic fishing company plans to invest CNY 60 million (USD 9.7 million; EUR 7.9 million) in a new fishing project in Russia’s Far East, which will include the construction of “four large fishing vessels.”

Dalian Xiang Hailin Long Distance Fishing Co. says it has signed a cooperation with the Russian Far East fishing agreement with implementation of the deal by the end of February 2015. Attempts to reach Xiang Hailin have been unsuccessful but the deal was reported in the farming pages of the People’s Daily, mouthpiece of the Chinese Communist Party, and appears to have been signed during a meeting between Chinese and Russian fishery officials that took place in Beijing late last month and organized by the Liaoning Province Association of Sino-Russian Cooperation as part of an “investment and trade fair” in Beijing.

Officials from the provincial government of Liaoning province “sat down with counterparts from the Ministry of the Russian Far East Development,” according to a statement on the meeting issued to SeafoodSource by the provincial office of the National Reform and Development Commission (an important Chinese government policy-making body) in Liaoning, a northern province home to the huge fishing hub and port of Dalian.

Russia is seeking foreign investors to invest in “high-tech fishing, farming and fish farming and processing” according to the Chinese statement, which notes the Far East ministry “plans to come up with 14 areas as the development of special economic zones in the Far East, to give special incentives to attract foreign investors.” 

With Russia blocking western seafood imports in retaliation against sanctions, current bonhomie between Chinese and Russian leaders is in contrast to frosty words in 2012 over fisheries when Russian patrol boats fired on Chinese trawlers that were claimed to be in Russian waters illegally. As a follow-up to that incident, last December Russia and China met to ink a “cooperation agreement” to “prevent, deter and eliminate illegal, unreported and unregulated (IUU) fishing of marine biological resources” also known as the “Agreement to prevent IUU Fishing.” A technical consultation meeting of the two sides was held in Shanghai last June to figure out how to implement the agreement and how to share information on fish catches and resources.

The Chinese side originally committed to start implementing the deal on 1 June this year though there has been no clear sign that this has happened. To start the implementation of all agreements to prevent IUU required domestic procedures. China was to inform the Russian side “through diplomatic channels” about the completion of domestic procedures.

China and Russia also meet in the Sino-Russian Fisheries Cooperation Commission, which is said to monitor the number of Chinese vessels in Russian waters at any time. Russian members on the commission have sought commitments on observers aboard Chinese vessels as well as real-time positioning satellite monitoring of vessels. The Chinese, meanwhile, have used the Commission to negotiate quotas for Russian waters.

Before the fall of the USSR and the emergence of China as a major seafood player, the Russian fishing industry was the third-largest in the world with a quarter of the world’s frozen seafood exports. But in recent years the industry has suffered from under-investment and corruption.

Major Russian retailers like Magnit, BIN and Perekryostok have emerged as customers for Chinese processors that package frozen and dried products for the Russian market. With a population of 142.5 million, Russia is Europe’s largest market, where seafood consumption has grown over the past decade given Russia’s nominal GDP per capita increased massively from USD 8,562 (EUR 6,931) in 2009 to USD 15,243 (EUR 12,341) in 2013.

According to IGD Retail Analysis, the country’s per capita food consumption grew by 11 percent year on year in 2013 with forecasts an increase of over 10 percent for the rest of the decade. Most of that is retail based: More than 90 percent of Russia’s seafood is purchased in supermarkets, opening up opportunities for packagers and processors in China.

Fears over growing Chinese economic presence and influence in the sprawling but sparsely populated eastern territories and eastern port cities like Vladivostok led Moscow to establish a government ministry to oversee Far East affairs. More than 75 percent of Russia’s population lives in urban areas but 70 percent of the population is also living west of the Urals — far from the vast Siberian region bordering China.

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