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Eastern Shift! Vladivostok and Other Russian Far East Ports to Become International Free Trade Hubs

First ever East Russia International Economic Forum (Vostochny Economichesky Forum), aka, Eastern Economic Forum, is taking place in Vladivostok, Russia. Vladivostok is Russia’s port and international hub in the Far East, located very close to Japan.

During Soviet days Vladivostok was a closed city, where foreigners were not allowed. After the breakup of the USSR it became a hub for trade with Japan, sometimes illegal.

However, as Russia continues its historic pivot to the East (as I predicted since the beginning of 2014) more and more interest in free and legal country-to-country trade is developing. What a turn around from the Soviet days!

During the East Russia Economic Forum Putin announced that Vladivostok would become first Free Trade Port in the Far East, a development eagerly awaited by Japanese, Korean and Chinese business and investors. Putin also announced that following Vladivostok, other Russian Far Eastern ports will become Free Trade zones. He didn’t specify which ones, but I believe we are talking primarily Khabarovsk and Yuzhno-Sakhalinsk, but also probably Petropavlovsk-Kamchatsky, Komsomolsk-na-Amure and a few others.

Why is this announcement being made now:

This proposal had been on the table for the Japanese investors for some years. Russians promoted it as a way to make peace with old Japanese claims for Kuril Islands and Sakhalin (the latter has been withdrawn, as far as I know). However, Japanese, due to the internal politics and American pressure were unwilling to move the issue along. The elegant solution of the free trade zones, while Russia keeps the political, administrative and military control over its strategically important islands is a very wise solution of the old dispute.

The free trade ports issue stalled until China and Russia were literally pushed towards a very close alliance after the blatant intervention of the US and West in Ukraine and after the anti-Russian sanctions. The multi-faceted Russia-China alliance is making new leaps forward, the latest being Putin’s trip to Beijing for the Chinese parade (I’ll have a separate post about that).

As the trade between Russia and China is making these giant leaps, Korean and Japanese investors have to scramble to catch on while they can. The alternative is losing the lucrative Russian market, which is now opening up. But this rare opportunity will only last until the market is taken.

Japanese interest in the East Russia Forum is overwhelming, same as Chinese, S. Korean, Singaporean, etc. The organizers said that they planned for 1000 participants, while they got over 5000 participation requests. The interest from Europeans is just as huge.

The systematic Russian pivot to the East is continuing. It is helped by the short-sighted and silly policies of the West (recall my many predictions!).

Japan, usually identified as part of the West, is seeing the writing on the wall and is trying to shift towards the East as well. Japanese businessmen declared during the forum their desire to keep politics and business separate.

Video: Vladimir Putin proposes to create free trade zones in Vladivostok and other Far East ports.

Владимир Путин предложил распространить режим свободного порта на гавани Дальнего Востока

Video: Putin guarantees complete support for investors in the Far East:

Putin: Creating more economic freedom in the Far East is Russia’s priority:

Владимир Путин: Расширение экономической свободы на Дальнем Востоке — приоритет для властей России

Putin: Rosneft will invest 1.3 trln rubles in the Far East projects:

Владимир Путин: «Роснефть» вложит в проекты на Дальнем Востоке 1,3 трлн рублей

Putin: The Far East is welcoming to anyone who is ready to cooperate:

Путин: Дальний Восток гостеприимен для всех, кто готов к сотрудничеству

Full video speech by Vladimir Putin at First Eastern Economic Forum (Rus)

Synchronicity in action:

As I was getting ready to publish this post, I received three tweets from my Japanese friend Akaida. Here they are:

AkaidaOne ‏@akaider :

@LadaTweets Japanese companies consider participation in Silk Road Economic Belt http://tass.ru/en/economy/818948 … #russia #china #eurasia #BRICS

@LadaTweets Even Japan going #BRICS? Sanctions could lead to Russia-Japan currency swaps https://www.rt.com/business/314193-japan-russia-swap-sanctions … hmm! 🙂

@LadaTweets Japan dumps the DOLLAR! Russia-Japan join Teams https://www.youtube.com/watch?v=ULU24pSHvNo …

These are all positive signs, at least on the economic front. I spoke in my article Pro-US and Anti-Russian Japan: Eyewitness Overview and Predictions about Japanese business interests diverging from Japanese politics. Dependence on the US and habitual political confrontationism with the neighbors will continue putting the brake on Japan’s integration into the new model of development. I think US will keep its influence over Japan for another 5 or more years.

But cracks are showing, and they are showing on the business side. Japan, still being 2nd largest Asian economy and 3rd-4th largest global economy, plus possessing advanced technologies, is a very valuable business partner. Meanwhile, the ongoing weakening and collapse of the West is causing Japan to reconsider its tight economic alliance with the West. Japanese business has no choice but diversify in order to survive.

Japanese business is eager to set politics aside and set up alliances with the growing world and Asian powers, where the future development is, but old Japanese political allegiances are holding this process back.

This is my summary analysis of the most important features of the slow, ongoing shift of Japan’s position on global arena.

It has to be remembered that while Japan has no global political power, serving basically the US Trojan Horse in the region, it is an economic powerhouse, which at one point was the engine of the global economy. Also, Japan’s regional political and military ambitions are on the rise. All this together means that when Japan switches allegiances, it will be a huge blow to the US empire.
We should expect Japanese switch in conjunction with the EU switch, of which I briefly wrote in the above-linked article. This will be a slow and tedious process, to be sure.
Because Japan has built walls of confrontation and animosity against so many countries in Asia, it is difficult for them to reintegrate. Many in Asia distrust Japan utterly, based on history and present policies.
My prediction is that Japan will be able to re-integrate into Asia economically through the unifying factor of Russia. Generally, Russia will serve as the bridge and peacemaker for re-creating understanding and cooperation not only in Asia, but also in all of Eurasia, including Europe. The Middle East will take longer, but that will also happen eventually (not for a while, the wounds are too deep). Eventually, Russia’s role will be to re-establish the principles of cooperation and friendship on our entire planet.
Fro the time being, we should have no illusions about Japan politically and militarily. The confrontational approach will persist for as long as Japan’s best buddy is USA. The new Japanese military doctrine for the first time since WWII allows Japanese troops to be deployed oversees. This, understandably, makes everyone in Asia jittery, as people still remember the destructiveness of the Japanese militarism in the past.
There is a clear bifurcation (and rift?) forming between Japanese economic interests and its political direction. This will have to be resolved eventually. I give it 5-7 years. As USA empire weakens, Japan will gradually shift away from the West and closer to the East and Russia. Eventually, economic interests will prevail over politics. Japanese business must now scramble to catch up to China. Incidentally this applies to S. Korea and Singapore as well. If they don’t, in the shifting global economic landscape Japanese companies will start losing out to competitors, weakening the country’s economy.
On some level, Japanese government understands this gloomy scenario. This is why they quietly allow their business to disregard politics. Make no mistake, there is clearly a secret understanding between Japanese big business and the ruling elites (some might say they are one and the same). This is why publicly there is support of the US-Japan alliance, and behind the scenes, economic integration with Russia and the BRICS.
Incidentally, the same is happening with S. Korea, Singapore and other countries. In the next post I will have a telling story about the pressure applied by the US on S. Korea to prevent it escaping US clutches. Same kind of situation is applicable to Europe as well. Everyone sees the writing on the wall. But for the time being, US is still strong enough keep its ‘allies’ in its clutches.