China Reform Monitor: No.  919

August 16:

In the last five years, 500,000 to 600,000 Russian citizens have left for China to evade being “milked to death” by Russian tax collectors. Many small businesses under pressure from Russia’s Federal Tax Service have closed their doors and moved to major Chinese cities in that country’s northeast, including Harbin, Beijing, Dalian and Shenyang. It is nearly impossible for Russians to obtain a permanent a residence permit in China; instead they rely on renewing business visas. “Working in Russia is proving to be more impossible, uglier, and more repugnant even taking into account all the fears associated with China,” the Russian newspaper Novaya Gazeta reports. Russian students are also leaving in large numbers for Chinese universities since the tuition prices are lower and job prospects are better. Pensioners in Blagoveshchensk, Amur Oblast are also renting or selling their homes and using the money to buy better homes in Heihe, Heilongjiang where apartments are “many times cheaper.” The article concludes that in Moscow, the Chinese migration into Siberia is taken more seriously than in Siberia where “many people would certainly not be averse to the Chinese finally shooting the bureaucratic crooks on the city squares. Let the Chinese live, for in the consciousness of a great many Siberians and Far Easterners, China is changing from our problem to an advantage.”

August 26:

According to the Pentagon’s report on China’s military modernization: “To strengthen its deterrent posture relative to India, the PLA has replaced liquid-fueled, nuclear-capable CSS-2 IRBMs with more advanced and survivable solid-fueled CSS-5 MRBM systems” at positions near the border with India. The report also said that the People’s Liberation Army is fast improving its infrastructure near the Sino-Indian border, which can be used for military purposes. Pakistan, it said, was a main importer of Chinese military equipment including the F-7 and JF-17 fighters, anti ship missiles, air-to-air missiles, helicopters, early warning systems and new frigates, the Indian Express reports.

August 29:

In the latest incidence of violence against Chinese in a Central Asian country, 300-400 locals protesting a Chinese mining company in Kyrgyzstan’s Naryn Region have badly beaten three Chinese employees. The Chinese company, which was not named in the report, is mining gold at the Buchuk and Soltan-Sary fields. Locals were protesting that the mining license should be given to a local firm but was not because a corrupt official from the state-owned Kyrgyzaltyn company demanded a bribe. After demonstrating, the protesters marched to the Chinese company’s office and when security guards fired in the air the protesters set upon them. Kyrgyzstan’s 24.kg news agency reports that the same Chinese firm was driven out after the April 2010 uprising that overthrew the Kurmanbek Bakiyev’s regime, but the firm returned after the area was stabilized. A special commission from the Kyrgyz Natural Resources Ministry has been sent to investigate the incident reports BBC Monitoring.

September 2:

A Chinese warship confronted an Indian navy vessel shortly after it left Vietnamese waters in late July, in the first such reported encounter between the two countries’ navies in the South China Sea, India’s Financial Express reports. The unidentified Chinese warship demanded that India’s INS Airavat, an amphibious assault vessel, identify itself and explain its presence shortly after it completed a scheduled port call in Vietnam. “Any navy in the world has full freedom to transit through these waters or high seas,” said one Indian official familiar with the encounter. “For any country to proclaim ownership or question the right to passage by any other nation is unacceptable.” Hanoi is also upset by what it believes to be a deliberate provocation that suggests China believes it is entitled to police the South China Sea.

[Editor’s Note: This week Lieutenant General Nguyen Chi Vinh, Vietnam’s deputy defense minister, visited Beijing where he met General Liang Guanglie, China's defense minister. Both sides agreed to increase military co-operation and set up a military hotline.]