China Reform Monitor: No. 1131

October 13:

Western sanctions on Russia have turned Manzhouli, Inner Mongolia on the 2700-mile China-Russia border “into a prosperous trade hub,” with a planned 3 billion yuan free-trade zone, the Guardian reports. Russians travel for days to purchase Chinese consumer goods there, from clothing to washing machines, sometimes for resale back home. After Russia banned U.S. and European agricultural products, Chinese vegetables sales have also increased. Last year Russia exported 10 million cubic meters of timber through Manzhouli and 265,000 Russians crossed into China – a 14% rise over 2012. A month long visa-free entry program for Russians is in the works and rail services are planned from China’s southern manufacturing areas though Manzhouli and on to Poland. Liaoning University’s Li Jiacheng explains: “Russia looks to the east and tries to, with the help of China, break the sanctions of the west. China needs Russia’s help to counterbalance the US’ strategic rebalance (to Asia).” Last month, the two countries agreed to jointly develop Russia’s Zarubino port, 11 miles from China’s border.

October 17:

China and India have concluded talks on a border mechanism to prevent incidents like last month’s standoff between their armies in Ladakh from recurring, the Press Trust of India reports. They discussed confidence building mechanisms including regular interaction between their Army Headquarters and Field Commands, additional border personnel meeting points, and more telecom linkages between forward posts. Ouyang Yujing, Director General, Department of Boundary and Oceanic Affairs, led the Chinese delegation and Pradeep Kumar Rawat, Joint Secretary (East Asia) led the Indian side.

October 22:

Al-Qaeda’s new English-language magazine Resurgence has joined the Islamic State (IS) in calling for a jihad against China over its “occupation” of Xinjiang, reports theDiplomat. The first issue contains an article entitled “10 Facts About East Turkistan,” which cast Xinjiang as a longtime independent state that has recently been brutally colonized by Han Chinese, who are determined to obliterate its Islamic heritage. “In the last 1000 years of its Islamic history,” the article says, Xinjiang “has remained independent for 763 years, while 237 years have been spent under Chinese occupation at various intervals. In 1949, 93 percent of the population of East Turkistan was Uyghur, while 7 percent was Chinese. Today, as a result of six decades of forced displacement of the native population and the settlement of Han Chinese in their place, almost 45 percent of the population of East Turkistan is Chinese.” Chinese authorities have noted an uptick in the number of Chinese nationals traveling to the Middle East to fight or train alongside militant groups in the region. The map IS released of its envisioned Caliphate’s borders includes Xinjiang.

October 24:

At the Great Hall of the People in Beijing, 21 countries signed a MoU establishing the Asian Infrastructure Investment Bank (AIIB) – a new multilateral bank to finance infrastructure projects in Asia headquartered in Beijing. Authorized AIIB capital is $100 billion and the initial endowment will be $50 billon. The founding members will complete ratification in 2015 and the AIIB will be established by the end of 2015, the official People’s Daily reports. “To become rich, first build roads,” President Xi Jinping said during the signing. “The purpose of my proposing a joint push to build the Silk Road Economic Belt and the 21st Century Maritime Silk Road is to deepen economic cooperation among Asian countries for common development. [To] make China’s development more beneficial for countries in Asia,” Xi stressed the AIIB’s inclusiveness and multilateralism and invited “all countries with interest” to join.

October 27:

Unfazed by China’s objections, New Delhi has announced a 1.75 billion rupees (about $28 million) package to build 54 new border outposts and infrastructure along the Chinese border in Arunachal Pradesh. “I feel pained and anguished over reports of incursions by Chinese troops,” said Union Home Minister Rajnath Singh, who made the announcement at the 53rd commemoration of the Indo-Tibetan Border Police (ITBP), which guards the 3,488 km long border. Singh said the new posts will be set up in Arunachal Pradesh where there are large gaps at the Line of Actual Control (LAC),reports India's Economic Times.