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🇰🇷 South Korea /Economy & Trade

Lessons from China-Mongolia-Russia Economic Corridor: South Korea's Role

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

Analysis Named sources Context piece
  • A 2016 agreement between China, Mongolia, and Russia to build an economic corridor has seen limited success, with only one of the three planned transportation routes showing partial activation.
  • The project's slow progress is attributed to insufficient demand from Mongolia and Russia, cautious participation from Russia fearing Chinese economic dominance, and external risks like the COVID-19 pandemic and the Russia-Ukraine war.
  • The article suggests that for future projects in the Tumen River region involving North Korea, China, and Russia, South Korea's participation could significantly improve infrastructure demand, participant enthusiasm, and mitigate risks, potentially reopening dialogue with North Korea.

A decade after China, Mongolia, and Russia agreed to establish an economic corridor in 2016, the initiative has yielded limited results. The plan, which aimed to connect China's "Belt and Road" initiative, Mongolia's "Prairie Road" plan, and Russia's "New Eastern Policy," has seen only one of its three planned transportation routes, the Eastern Railway Corridor, partially activated. The other two, the Tumen River Transport Corridor and the Primorye-1 Transport Corridor, remain largely undeveloped.

The three routes of the China-Mongolia-Russia economic corridor that include provinces of China are the 'Eastern Railway Corridor' that exits to the Yellow Sea, the 'Tumen River Transport Corridor' that exits to the East Sea, and the 'Primorye-1 Transport Corridor' that exits to the East Sea.

— Article textDescribing the planned routes of the economic corridor.

Several factors have contributed to the project's stagnation. Firstly, the demand for new transportation infrastructure in Mongolia (population approx. 3.5 million) and Russia's Far East (population approx. 8 million) is significantly lower than in China, which has provinces with tens of millions of residents. Building extensive infrastructure in sparsely populated areas reduces its economic utility. The partial activation of the Eastern Railway Corridor was primarily driven by China's need to import coal from Mongolia, leading to the construction of several feeder lines connecting mines to China, though the main planned railway was never built.

Secondly, Russia has approached the economic corridor with caution, concerned about potential Chinese economic encroachment and the establishment of trade structures that favor Chinese manufactured goods over Russian agricultural and fishery products. Modernizing the main railway lines, largely controlled by Russia, would require Chinese capital, a prospect Russia is hesitant about due to fears of diluting its ownership stake.

The demand for new transportation routes was not as great as expected. While China's demand was large, with populations in the tens of millions per province, Mongolia's (about 3.5 million) and Russia's Far East's (about 8 million) demand was not.

— Article textExplaining the issue of insufficient demand in Mongolia and Russia.

External risks have also played a significant role. The COVID-19 pandemic starting in 2020 and the Russia-Ukraine war in 2022 have further delayed the project's progress. These factors are also expected to influence future economic cooperation in the Tumen River region involving North Korea, China, and Russia.

Russia was very cautious about the economic corridor agreement. While regional development is good, it is problematic if it leads to the erosion of Chinese capital. Furthermore, if the trade structure becomes fixed with Chinese manufactured goods being imported and Russian agricultural and fishery products being exported, it could lead to a trade structure that the Russian government does not desire.

— Article textDetailing Russia's cautious approach to the economic corridor.

However, the article suggests that future initiatives in the Tumen River region might see greater success. North Korea's larger population (approx. 25.8 million) could generate stronger demand for infrastructure. Recent overtures from North Korea, such as inviting Chinese tourists and hosting high-level officials, indicate a potential willingness to engage economically. Russia, recovering from the war, might also become more proactive in regional economic development. Crucially, the article posits that South Korea's participation could significantly boost infrastructure demand, enhance participant enthusiasm, and mitigate external risks. Such involvement could serve as a catalyst for renewed dialogue between North and South Korea.

The risk of the UN sanctions, while not increasing, still remains a significant risk. Our role here is important. South Korea's participation will undoubtedly be a positive factor for the development of the Tumen River region, improving all three factors. Through this, we must create conditions to resume dialogue with North Korea.

— Article textHighlighting the potential role of South Korea in regional development and inter-Korean relations.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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