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. Last Updated: 07/27/2016

Region Is Building A Bridge to China

ReutersCustomers looking at goods at a market in the city of Birobidzhan.
BIROBIDZHAN -- The Jewish Autonomous District is playing a big role in a new drive to boost exports to China.

Closer to Beijing than to Moscow, the region is gearing up for construction by 2010 of a bridge across the Amur River, the first to link Russia and China.

The bridge will carry iron from largely untapped deposits in the Far East to steel mills in China, a new front in Russia's push to develop the region and sell raw materials to China.

"Products from Moscow to Kamchatka will cross the border in our region," said Valery Gurevich, deputy governor of the region, referring to the Kamchatka Peninsula.

In his office overlooking a statue of Lenin in Birobidzhan, Gurevich's telephone rings several times per day with business proposals from China.

The calls will only grow more frequent after the bridge is constructed, said Gurevich, the son of Jewish settlers who arrived here in the 1930s.

Stalin carved the region out of the marshy fringes of the Far East as a homeland for Soviet Jews. Today, 185,000 people live here and only a minority is Jewish. Jews account for about 5 percent of the 75,000 residents of Birobidzhan. A 540-kilometer stretch of the Amur River defines the border between the region and China's Heilongjiang province, where nearly 40 million people live.

Pending approval from the Kremlin and Beijing, the river will be bridged at the town of Nizhneleninskoye. Much of the traffic will be iron ore mined at the Kimkan and Sutara deposits in an $800 million project run by London-listed miner Aricom.

Aricom plans to ship more than 3 million tons of iron from 2011 to steel furnaces in China, which produced nearly 420 million tons of steel last year -- one-third of the world's total.

"The deposit is undoubtedly one of the largest unexploited iron ore projects in the world and benefits from both excellent infrastructure and close proximity to end market," Aricom CEO Jay Hambro said.

The bridge would almost halve the cost of transporting iron to China, he said, to just below $5 per ton from $9.15 using the current projected cross-border route.

The iron will further help Russia's trade balance with China. Last year, it exported $15.8 billion worth of goods to China and imported $12.9 billion.

But it is not just the trade in iron that will benefit.

"Business that isn't profitable now due to transportation costs will suddenly become profitable," said Valery Shulyatikov, a senior offical in the regional government.

Ninety percent of the Jewish Autonomous District's $30 million in external trade last year was with China, and cross-border trade rose 74 percent in 2006 and a further 70 percent in the first quarter of this year.

Timber is traditionally the region's main export product, but other new businesses are developing. Russia is quenching China's newfound thirst for mineral water, said Gurevich, and is starting to offer soybeans across the border.

For the Chinese in Birobidzhan, however, a nationwide ban imposed in April on foreign vendors in markets is making life tough. Chinese-made clothes and electronic goods occupy much of the shelf-space in the town's central market. But Chinese traders, who used to sell their wares directly to customers, now smoke in huddles on the market's fringes.

One trader, who did not want to be identified, said he and his colleagues sell imported products to Russian stall owners, who in turn sell them to residents. "Before, there were 300 to 400 Chinese here. Now, there are no more than 50," he said.