A free trade zone planned for northern China promises locals will be able to purchase Russian salmon at a 30 percent discount to normal prices. Opening in the large city of Harbin, a China-Russia free trade zone is intended to become a hub for sales of high-end Russian foodstuffs such as salmon to domestic Chinese consumers.
Russian salmon and vodka will become cheaper to Chinese consumers who will be allowed to shop in the free trade zone according to a statement from officials meeting at the Harbin People's Political Consultative Conference (CPPCC), a body overseeing the city which is now awaiting the green light from Beijing to build the trade zone. “With the reduction on the tariffs our consumers will be able to buy Siberian salmon at 30 percent less than prices paid in normal channels,” according to the CPPCC statement which also praised currently warm Sino-Russian relations.
The presence of cheaper Russian salmon in China’s domestic market could have an impact on booming sales of Atlantic salmon imports. Pacific salmon has thus far gone largely to China’s processing for export sector, which is already enjoying duty-free imports provided the salmon is re-exported.
Russia in recent years has accounted for 67.2 percent of the global pink harvest with increasing quantities of frozen pink and chum being exported to China and Korea for secondary processing and re-export to western markets. Russian salmon fisheries harvest about 500,000 metric tons of salmon per year with six species of Pacific salmon (pink, chum, sockeye, Chinook, masu, and coho salmon) of which 69 percent is pink, 20 percent chum and 10 percent sockeye.
A five-hour journey by train or road from the Russian border and located a day’s drive west of the key Russian port city of Vladivostok, Harbin wants to reprise its historic role as a Sino-Russian logistics hub. Harbin officials are hoping that the new trade zone will draw wholesalers and consumers from around China to Harbin to buy Russian delicacies like salmon, caviar and vodka.
The Harbin zone stands a high chance of being approved by China’s central government which has long looked to the lightly-populated and vast region of Siberia as a supplier of food for the huge population of China. In that light the two countries this year announced a USD 2 billion (EUR 1.84 billion) investment fund to develop agricultural projects in the two countries and set up a free-trade zone with backing from the Russia-China Investment Fund, an arm of sovereign-wealth fund China Investment Corp.
The fund has prioritized cooperation in agriculture and fisheries as well as customs procedures and logistics. The fund has also stressed that any free trade zone between the two countries would allow the direct exchange rate between the Ruble and the Chinese Yuan. Most of China’s trade is priced in dollars – making China dependent on the trajectory of the American currency.
However while China imports far more seafood and agricultural produce than it exports to Russia the latter has been keen to add value to those exports – by processing more of its salmon at home, for instance. Similarly unreported in China’s state media is Russian frustration over Chinese illegal fishing in its far eastern waters.
Processors and traders in China have long eyed the potential of a free-trade with Russia in opening access to the Eurasian Economic Union, a Moscow initiative which includes Russia, Armenia, Belarus and Kazakhstan, a market of 171 million people.
China has sway over Moscow, having last year signed a USD 400 billion deal to buy gas from Russia. China is Russia’s second-biggest trading partner after the EU, and trade between the two was worth USD 95.3 billion (EUR 87.6 billion) in 2014. More than 80 percent of trade is natural resources. China has also suggested a high-speed train line linking Beijing and Moscow.
Free trade zones are currently in vogue in China as a means of promoting economic reform in the services and consumer goods sectors. The country already operates over 120 free-trade zones enjoying special tax and customs regimes but most of those are located around ports and processing zones.
