Russia's Chuvashia Republic falls prey to Chinese investment-related corruption

CHEBOKSARY, Russia -- Russian authorities are accusing a joint Chinese-Russian company of violating environmental regulations in Russia's Chuvashia Republic, where expanding Chinese investment has led to protests over alleged corruption.

Authorities charged the Sichuan-Chuvashia Chinese-Russian agricultural joint venture with neglecting farmland leased to it. The land now is covered with weeds, creating the threat of wildfires, officials at the local office of Rosselkhoznadzor, the Russian agricultural regulator, told Radio Free Europe/Radio Liberty (RFE/RL) on August 20.

The joint company now faces a fine of up to 700,000 RUB ($9,500).

Less than two weeks earlier, a court convicted Maksim Medvedev, head of the Bolshiye Algashi village in Chuvashia, and gave him a suspended prison sentence of more than three years for forging documents related to non-existent public discussions on allocating the farmland in 2019 to the Sichuan-Chuvashia joint venture.

Aleksandr Andreyev, a lawmaker at Chuvashia's State Council, had accused top Chuvashia officials of involvement in illegally allocating land to the venture.

In recent years, Chuvashia residents have staged numerous demonstrations against Chinese companies involved in developing the region and have accused local authorities of corruption related to those projects.

High risk investment

China has aggressively pursued investment opportunities across various regions, including Central Asia, but such projects are not without risks.

China's Belt and Road Initiative (BRI), which is focused on creating an extensive infrastructure network to transport Chinese goods, could potentially lead to Central Asian countries being heavily indebted to Beijing.

Beijing claims the project, which includes the construction of highways, railways, seaports and other infrastructure, as well as industrial and educational projects financed by China, will enrich all the countries involved in the initiative.

The reality shows, however, that the BRI's objectives highly favour China's interests, and more specifically on satisfying domestic energy needs, conquering international markets and increasing exports, among other goals.

The BRI "is ultimately a vehicle for China's geopolitical ambitions", according to a report by the Centre for a New American Security, a think-tank based in Washington.

"Liabilities for host countries -- loss of control, opacity, debt, dual-use potential, and corruption -- are often strategic assets for Beijing," the report said.

Chinese debt bondage

Central Asian countries that have signed onto the project are especially at risk of owing billions of dollars.

For example, as of March, Kyrgyzstan's foreign debt was $5 billion, with the largest share of it -- more than 40% -- belonging to the Export–Import Bank of China, according to the Ministry of Finance.

Tajikistan is another country at risk.

In spring of 2018, it relinquished the Upper Kumarg gold mine in Sughd province to China, with 50 tonnes of gold reserves, to settle a $330 million debt incurred to modernise the Dushanbe-2 power plant.

"Tajikistan has fallen into debt dependence on Beijing," Shokir Khakimov, a legal scholar from Dushanbe, told EurAsia Daily at the time. "So the authorities, realising that they can't pay their debts, agreed to China's proposal and transferred a gold mine to it."

Kazakhstan is taking steps to prevent a similar fate with a new law banning the sale of agricultural land to foreigners.

The law, which President Kassym-Jomart Tokayev signed on May 13, highlights the country's growing unease with Chinese territorial encroachment and investment schemes.