Publication: Eurasia Daily Monitor Volume: 3 Issue: 147

As Russian and Chinese officials indicated plans to launch a major forestry joint venture in Siberia, environmentalists decried the idea as an ominous sign for Russia’s taiga forests.

Russia and China discussed a long-term lease of one million hectares of Siberian forests as “a pilot project on joint use of forest resources,” the Russian Natural Resources Ministry press service said in a statement on July 26. The project was considered at a meeting in Moscow between Boris Bolshakov, deputy head of the Russian Federal Forestry Agency (Rosleskhoz), and Li Yuchai, deputy head of China’s State Forestry Administration.

Li reportedly said that the Chinese economy needs more timber, and Beijing views Russia as its main strategic partner in terms of timber supplies. Rosleskhoz, in turn, said that the pilot project would involve the “establishment of a joint enterprise to cut and process timber, including pulp production with Chinese investment.” Rosleskhoz, part of the Natural Resources Ministry, reportedly suggested Tyumen region as a location for the would-be pilot project. The forests are to be leased for no less than 25 years.

Russia was well prepared for the forestry talks with China, seeking up to $1 billion in Chinese investments to build a major new pulp plant, Kommersant commented. Since March 2006, Russian customs officials have tightened control on timber exports to China, while the government also levied higher export tariffs on unprocessed timber. As a result, timber exports to China have been going down in recent months (Kommersant, July 28).

Timber exports from Russia to China have skyrocketed in recent years, going up by nearly 40 times during the past decade. In 2000 Russia and China signed a framework agreement on forestry cooperation, and in April 2006 a Rosleskhoz delegation traveled to China to discuss joint projects.

Forestry products are big business in Russia. Last year, Russia exported about 50 million cubic meters of timber, of which about 40% went to China, according to the Russian Natural Resources Ministry. About two-thirds of Russia’s total forestry exports involve unprocessed timber; hence the country earned just $7 billion from this trade.

China reportedly uses Russian timber for lucrative re-export operations. These logs are processed in China and some are exported to Japan, Europe, and the United States to be used for furniture and flooring materials (Yomiuri Shimbun, July 27).

Russia has a fifth of the world’s forest cover, more forests than any other country. They cover about 10 million square kilometers, an area larger than the United States. Most of these forests are largely pine and spruce — called ”taiga” in Russian — and are located in Siberia and the Far Eastern region of Russia. Russia still has 289 million hectares of virgin forest, mainly concentrated in five regions of Siberia and the east.

Protection for these forests is far from adequate, particularly in the eastern regions of Russia. The situation is particularly grave in the Far Eastern areas, where almost three-quarters of forest area in the border areas with China is believed to have been cleared illegally.

In May 2000 Russian President Vladimir Putin dissolved both the State Committee for Environmental Protection, which was responsible for monitoring the environment, and Russia’s 202-year-old forestry service. These institutions were turned into departments of the Natural Resources Ministry, despite arguments that a single government agency should not oversee environment protection and also exploitation of natural resources because this inevitably brings conflicts of interest.

These arguments are set to resurface now that Russia’s Natural Resources Ministry has suggested a long-term lease of Siberian forests to China. Although one million hectares of forest represents a mere 0.2% of Russia’s total forested area, the idea immediately sparked concerns and criticism.

Nezavisimaya gazeta commented that the worst fears of Russia’s left radicals over Chinese expansion in Russia appear to have come true. This “pilot project” could well be followed by other similar ventures, the daily wrote. The paper quoted Vasily Sadliy, head of the forestry department of Irkutsk region, as saying that Irkutsk authorities were negotiating forestry joint ventures with China (Nezavisimaya gazeta, July 28).

The project is set to become a no-win situation for Russia, as there is hardly any point in swapping our pristine taiga for paper dollars or yuans, Komsomolskaya pravda commented. The would-be joint venture is almost certain to employ Chinese nationals, who are very unlikely to leave Siberia voluntarily, even after the expiration of the forest lease, the daily wrote (Komsomolskaya pravda, July 28).

The idea of the pilot project was met with harsh criticism in Russia. ANN news agency quoted Yuri Shvytkin, a legislator from the Krasnoyarsk regional assembly, as commenting that Siberian regions should employ Russian citizens, as now the Chinese appear to be infiltrating Siberia, and it would be difficult to drive them back home (ANN, July 27).