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. Last Updated: 07/27/2016

Chinese Fly In to Settle Cherkizovsky Lockout

MTTraders removing goods Wednesday from Izmailovsky Market. The shops on the right are closed, while the Vernisage souvenir market, left, remains open.
A senior Chinese delegation arrived in Moscow on Wednesday as mounting tensions over the closure of Cherkizovsky Market threatened to sour relations between the two countries.

About 60,000 Chinese traders worked at Cherkizovsky, Eastern Europe’s largest market, and the closure amid a smuggling crackdown could stymie Chinese investment in Russia, Chinese state media reported.

The delegation, led by Deputy Commerce Minister Gao Hucheng and including officials from the Foreign Ministry and customs service, will meet with their Russian counterparts and representatives from Moscow City Hall, Chinese Embassy spokesman Li Hua said, Interfax reported.

The Chinese side hopes to recover billions of dollars of merchandise that has been seized at the market and help the traders relocate to “safe markets,” said Ling Ji, deputy director of the Commerce Ministry’s Europe department, Interfax reported.

The two main sticking points during the talks are expected to be proving that the Chinese traders imported their goods legally and that they worked legally at Cherkizovsky, Ling said.

“Chinese merchants need to provide business documents, including both lease contracts and goods clearance documents,” Ling said, China’s official Xinhua news agency reported.

Moscow authorities are requiring traders to provide documentation to get access to the estimated $5 billion in merchandise that is being held on the 300-hectare territory.

Yu Anlin, chairman of Wenzhou Business Chamber in Russia, said traders from Wenzhou city in the Zhejiang province alone have declared losses of more than $800 million, Xinhua reported.

Russian officials had no immediate comment about the Chinese visit Wednesday.

Igor Morgulov, an adviser at the Russian Embassy in Beijing, assured the head of the Russian delegation, Gao, earlier this week that Cherkizovsky’s closure was aimed at cracking down on crime and was not about targeting Chinese businessmen, Xinhua reported.

Gao told Morgulov on Monday that China would increase quality ­controls on merchandise sent to Russia and block the entry of counterfeit goods.

China says it supports Russia’s crackdown on smuggling but that the two countries need to work together to solve the problem. A Commerce Ministry spokesman said Friday that Russia shares the blame for smuggling because it has imposed cumbersome customs procedures that encourage “gray customs clearance.”

Many Chinese traders, even after filling out the requisite forms, have found it difficult to bring goods across the border without participating in “gray customs clearance,” said Sun Zhuangzhi, a scholar with the Chinese Academy of Social Sciences.

“It’s right for Moscow to fight against corruption. But Moscow needs to handle the market properly because it’s also important to Russia’s investment environment as well as the Russian people’s needs for daily goods,” Sun said, Xinhua reported.

Some 150 Chinese traders have been deported since Cherkizovsky was closed on June 29.

Cherkizovsky will be completely cleared of all goods by September, a senior City Hall official, Larisa Strelnikova, said Wednesday, RIA-Novosti reported.

But Cherkizovsky traders fear mass looting of their goods from the market, Yabloko leader Sergei Mitrokhin said, citing complaints lodged by traders with his party.

Izmailovo district head Sergei Cheplakov said last weekend that traders had taken away goods from 1,500 of the 50,000 shops in the market.

Even as China worries about its traders from Cherkizovsky, more Chinese migrants could be out of work as the Cherkizovsky crackdown spreads to the neighboring Izmailovsky Market. Police closed Izmailovsky on Tuesday after confiscating 5,843 truckloads of merchandise between July 11 and 20 and detaining 25 people, including 14 Vietnamese citizens who will be deported.

An Izmailovsky trader, who identified himself as Sakhil, 40, called the closure “illegal” and “unfair” on Wednesday. He said he had no idea what was going on but that he had five children at home to support.

A woman who refused to give her name said the police who have guarded the market since its closure were extorting bribes from traders for providing access to the market’s territory. “It’s outrageous. Traders cannot reach their pavilions, and trucks are being sent back if you don’t give a bribe,” she said.

However, the famous Vernisage, where tourists have shopped for souvenirs since the 1990s, remained open Wednesday. Interfax reported Tuesday that the souvenir market, located in the middle of Izmailovsky, had been closed together with the rest of the market.

Meanwhile, a dispute continued to simmer over how many people had worked at Cherkizovsky.

Migrants of Russia Federation estimates that the market employed 100,000 migrants, while the Federal Migration Service has put the figure at 3,000 migrants out of a total of 14,000 traders.

The Federal Migration Service defended its head count Wednesday.

“Lately, there have been a lot of people saying that supposedly more than 100,000 foreign citizens were working at Cherkizovsky Market. That’s not so,” said Fyodor Karpovets, head of the migration service’s Moscow branch.

“In my opinion, these statements are evidence of interested parties intentionally trying to build up the situation to get legalization for those who are in the city illegally,” he said at a news conference.

The six management companies operating at the market had a quota of 14,250 foreign workers, he said.

Of the 4,000 foreigners the service has checked, 900 were in Russia illegally and 444 of those have been deported, he said.