“Let us have an opportunity in Russia”

That day, the waiting room at the Vladivostok train station – the starting point for the Trans-Siberian Railway (TSR) – was crowded with Chinese people.

A Chinese man carrying his luggage said in fluent Russian, “Most of these people are returning home from Irkutsk, Siberia.”

Due to the recent announcement of a new Russian law which will limit the ratio of foreign retailers in Russian markets to 40% by this coming April, many Chinese retailers are hurriedly returning to their home country.

Because of the massive influx of Chinese business, the aggressive movement of Japanese products and the Russian authorities’ restraints, far-eastern Russia has become a war zone, in which South Korea, Japan, China and Russia are desperately fighting for the dominant position.

Most South Korean enterprisers doing business in Russia claim that the fighting between South Korea, China, Japan and Russia, in Primorye, has barely begun.

Efforts to make a Pacific route by the fast growing China are easily visible. On March 16, 10km north of Hasan station in Russia, a new railroad that connects with Hunchun was completed. In front of the railroad to Hunchun, a common station was constructed. While Russia, South Korea and North Korea were contending over the connection of the Trans-Korean Railway (TKR) and TSR, the Chinese government deftly used its alliance with Russia to connect its own railroad to the TSR.

China aims to use this railroad to carry its goods to Zarubino port of Russia and then to the Pacific route. Coupled with its intention, China is now eager to establish a land rout through the East Sea.

a Vladivostok News reporter said, “The road construction between Zarubino port and Hunchun was financed by the Chinese government.”

China is also competing with Russia over the use of Rajin port in North Korea. Residents of Hasan said, “China has leased the coast near Rajin port and has constructed roads from Hunchun to the harbor, after supplying money to North Korea.

On March 16, on a road to north of Zarubino port, Japanese used cars were being moved with temporary registration numbers; and Japanese people took over a North Korean restaurant near Vladivostok port and turned them into Japanese restaurants.

The Japanese government has been showing its willingness to invest in oil pipe lines in eastern Siberia in order to secure energy resources. A Russian oil expert stated, “If the Russian government guarantees the supply of oil, Japan will assume 25% of the construction expenses.”

In major cities in Primorye, Japanese people are a rare sight, but Japanese products are flocking the cities in huge numbers. On March 17, Japanese electronics commercials appeared in five minute intervals on a large electronic sign which stands in front of the Primorye office building, located in downtown Vladivostok.

The arrogant Russia, thanks to oil exports, has strengthened its restraint toward foreign companies in Far East areas and enforced its policy to give preferential treatment to high investors.

Though Russia and China are allies, Russia will not lessen its financial restraint by imposing a quota system on Chinese labor.

The control of the Russian central government has reached all the way to the border areas. Until last year, Russia cared little for the border area of Hasan. However, Russia is recently expanding the road from Vladivostok to Hasan and is planning to build a double track railway.

Korean consul general in Vladivostok Jeon Dae-wan said “Russia plans to build a driveway bridge next to the railway of Duman River connecting Russia to North Korea and construct a gas storage facility in Hasan.”

The advance of South Korean companies into the Far East area was faster than those of any other countries, but the companies are now struggling desperately to secure their positions while contending with companies from Japan, China and Russia.

Dozens of South Korean wood-processing, textile and toy companies are facing closure or relocation because of the high production cost and intense government surveillance.

Residents say that the prior occupation effect of major companies is now decreasing. Local communications company, NTK, in which KT invested, has suffered from its low performance due to fierce promotion of Russian competitors.

Hyundai Hotel, once known as the finest Hotel in Vladivostok, is also toiling over restraints from the Russian government and foreign companies. Hyundai Motors, which has the largest market share in the Far East, fears that they could be forced to take fourth or fifth position in the auto industry because of the aggressive actions of foreign car makers.

viyonz@donga.com