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Rouble Rumble

From  C H I NA  D A I L Y     E U R O P E A N W E E K LY     M A R C H 2 – 8 , 2 0 1 2

ROUBLE RUMBLE

WORKERS WHO STRUCK IT RICH IN RUSSIA ARE BEING URGED TO INVEST CLOSER TO HOME

By HE NA AND HAN JUNHONG

“2,300 people: population of Sihe village, including more than 200 millionaires and two billionaires 

200,000 yuan: per capita income of Sihe last year

890 people: number from Sihe who have business interests in Russia

7,798 jobs: number created at companies established in Shulan city by residents with business interests in Russia

At first glance Sihe looks like a normal village: row upon row of brightly colored houses, all separated by blue and white fences and topped with solar panels, and surrounded by a sea of fi elds. Look closer,

however, you will notice that the piles of corn that usually adorn front yards in this rural area of Northeast China have been replaced by black sedans, while several homes have installed geothermal heating, which
costs at least 100,000 yuan (11,900 euros), a luxury in the countryside. The village is an oasis of opulence in the impoverished countryside of Jilin province — and it is all thanks to Russian consumers.

“Since residents here started going to Russia to work, our lives have changed completely,” says Zhao Baoqing, 35, one of the first villagers to head across the border in the early 1990s.

Now, instead of conversations about seeds, fertilizers and harvesting, here residents chat about international fi nancial markets and foreign exchange rates.

“I remember when this place was poor, no one wanted our men to marry their daughters — we were ruffians.” That is no longer a problem, he says, offering as evidence the fact the village now has 22 Russian brides.

More telling perhaps is that Sihe — population 2,300 — reported an annual per capita income of 200,000 yuan last year and lists among its residents more than 200 millionaires and two billionaires.
Zhao, who now runs two small stores in Moscow selling imported Chinese goods, is one of at least 890 people who have been made rich by business interests in Russia.

The village, 220 kilometers from Changchun, the provincial capital, forms an area that used to rely on coal mining and agriculture as pillar industries. But, as resources have diminished, unemployment has risen and the local economy has stuttered. With job opportunities becoming scarce, more people decided to look abroad. Sihe workers first went to Russia in 1993. The initial trip, organized by the labor bureau in nearby Shulan city, simply involved 30 men going to plant vegetables on the outskirts of Chelyabinsk. Fearing the prices of daily necessities would be expensive, the villagers stocked up on cheap Chinese products before crossing the border. However, they quickly discovered that whatever they did not use could easily be sold.

Coming so soon after the fall of the Soviet Union, there was a large demand among Russian people for everyday goods, even at prices several times above the going rate in China.
“That’s when we realized there was a real business opportunity,” recalled Lu Wenxin, 59, who made the first trip. News in the village traveled fast, and the next time Lu hit the road he was joined by 35 neighbors.
This time, instead of working on a farm, they set up three market stalls and sold Chinese garments. Despite obvious diffi culties, such as the language barrier, most villagers still earned more than they would have toiling in the fields around their homes.

“Life in the village was really miserable and hard back then,” says Nie Haitao, who has been doing business in Russia for 19 years. “In 1993, my family of fi ve was making a total of just 4,000 yuan a year from growing corn.
“Although my parents objected, I went to Russia the following year with 600 yuan in my pocket,” added the 42-year-old.

Nie’s first business was in Chelyabinsk selling bubblegum, which he bought for 0.1 yuan each and sold for the equivalent of 2 yuan. Then, after making a little money, he began to sell sweaters.

Between September and Christmas 1994, he earned more than 10,000 yuan, an astronomical amount for a villager from Northeast China at the time. Today, he is involved in wholesale jeans in Moscow and said his business is on the up and up.

As more followed, the Shulan government established the Russia Labor Export Association to offer advice and guidance to people wanting to work, live or do business in the country. Jilin shares a 232.7-kilometer border
with Russia, which gives it a geographical advantage, while certain regions of the country — particularly the far east — have sparse populations and lack strong labor forces.

Today, Sihe residents have businesses across the vast expanse of Russia, from Vladivostok in the east to Novosibirsk in the west.

According to offi cial fi gures for Xiaocheng, the town that comprises Sihe, more than 90 percent of the 1,964 residents who worked abroad last year went to Russia, with the rest heading to South Korea and Japan. Together
they returned with more than 120 million yuan, the local government said.

Many traders from the area have set up shop at a market nicknamed “Shulan Street” in central Moscow.

“My first business in Russia was at Shulan Street,” says Zhao Baoqing. “It’s safer to be with villagers in a foreign country. The people who started doing business there early often helped latecomers.

“It’s not easy to do business there, there are often disputes. But we’re united when we face problems,” he added.

Despite its wealth, Sihe cannot escape the one characteristic that is shared by all rural communities with a large migrant workforce: a lack of young men.

Except for during traditional family occasions such as weddings and national holidays, the village is made up largely of women, children and the elderly. On evenings, less than half of its homes show any sign of life.

“Many of those people who earned money from working and trading in Russia moved to cities (in China),” said deputy village head Qiu Tingfa. “I went to Russia for business before, but I couldn’t get used to the life there, so I
came back. My sisters and brothers are still there, though.” He now runs a large leisure-activity center in Xiaocheng.

“Every spring plowing season, more than half of the people who appear in the fi elds of Sihe come from other places,” he says. “The majority of Sihe’s 400 hectares of farmland has been leased out.”

Li Shaochun, 39, is among the many villagers who have used the money they have earned in Russia to renovate their properties. After spending more than 100,000 yuan, his house boasts the latest electronic appliances and is more modern than those in major cities.

Yet, he hardly ever sees it. For this year’s Lunar New Year festivities, a traditional time for family reunions, he stayed just fi ve days before heading back to Moscow.

“My wife and son are there (in Russia), and I worry about them,” Li says. “The conditions in our Moscow house are very poor. We co-rent with another family — six people crowded in an area of 48 square meters.

“Compared with many newcomers, though, we’ve got it much better. They live in lodging houses where there are 10 people in rooms the size of 10 square meters.”

With labor export now a pillar industry for Shulan, offi cials are attempting to persuade successful traders to invest some of their wealth back into their native communities and help others.

“Sihe’s model is not easy to copy,” said Dong Yanguang, director of Shulan’s employment offi ce. “We need to still encourage labor export, but we also need those who have become rich to come back and spend money here.”

The city has introduced several preferential policies to achieve that goal, which had led so far to 767 original inhabitants returning and establishing 563 enterprises. With a combined investment of 600 million yuan, almost 8,000 new jobs have been created.

Yet, it is the success stories of villagers in Russia that are getting more attention from young people, especially in Sihe.

With their options still limited largely to working in fields, offi cials expect to see even more pack their bags for trips across the border in coming years.

 

 

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