Identifier
Created
Classification
Origin
09MOSCOW2722
2009-11-03 12:51:00
CONFIDENTIAL
Embassy Moscow
Cable title:  

MOSCOW'S CHINESE DIASPORA A WIN-WIN FOR RUSSIA AND

Tags:  PGOV PHUM PINR ECON ETRD KCOR SMIG TIP RS 
pdf how-to read a cable
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RR RUEHCN RUEHGH RUEHVC
DE RUEHMOA #2722 3071251
ZNY CCCCC ZZH
R 031251Z NOV 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 5289
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC
C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 002722 

SIPDIS

E.O. 12958: DECL: 11/02/2019
TAGS: PGOV PHUM PINR ECON ETRD KCOR SMIG TIP RS
SUBJECT: MOSCOW'S CHINESE DIASPORA A WIN-WIN FOR RUSSIA AND
CHINA

REF: MOSCOW 1910

MOSCOW 00002722 001.2 OF 003


Classified By: Political Minister Counselor Susan Elliott. Reason:
C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 002722

SIPDIS

E.O. 12958: DECL: 11/02/2019
TAGS: PGOV PHUM PINR ECON ETRD KCOR SMIG TIP RS
SUBJECT: MOSCOW'S CHINESE DIASPORA A WIN-WIN FOR RUSSIA AND
CHINA

REF: MOSCOW 1910

MOSCOW 00002722 001.2 OF 003


Classified By: Political Minister Counselor Susan Elliott. Reason:

1.
4 (b).


1. (SBU) Summary: There is a Chinese population in Moscow,
and recent events (including the closure of Cherkizovsky
market) have brought some aspects of the relationship between
the Chinese and Moscow into the public eye. The Moscow City
government, while benefiting from Chinese cheap labor to fill
Russia's labor gap, has largely ignored Moscow's estimated
100,000-strong Chinese diaspora. By contrast, the Chinese
government, with an interest in aggressively expanding trade
with Russia, has facilitated the growth of Moscow's Chinese
workers through financial assistance. This is a win-win
situation for the two governments, but many of the Chinese
who are living illegally in Moscow suffer a bleak existence.
While the Chinese mafia remains active in Moscow, the corrupt
Moscow city government turns a blind eye to a range of
illicit Chinese activities. End Summary.

Chinese in Moscow
--------------


2. (C) Mukhammad Amin Madjumder, President of the Federation
of Migrants of Russia, told us that more than 100,000 Chinese
live in Moscow. Our sources revealed that there are four
main groups of Chinese workers in Moscow: traders,
investors, low-wage workers in "legitimate" economic areas,
and trafficked workers. Vilya Gilbras, a history professor
at the Institute of Asian and African countries, told us that
nobody really knows the number of Chinese in the capital. He
explained that the Chinese may register anywhere in Russia,
but they generally migrate to Moscow. They move so
frequently that it is nearly impossible to accurately
document their numbers. Russia's unregulated border with
Kazakhstan, which is longer than the border with China, is
one major path into Russia, and ultimately to Moscow. The
Chinese are mostly from the border areas close to Russia.

Estimates are that 75 percent are in Moscow legally and 25
percent are here illegally.

Chinese Groups and Interests
--------------


3. (C) One large group of Chinese in Moscow is the traders
who have stalls in markets. Many of these individuals are
small business owners who have used their life-savings to
purchase goods, often gray- or black-market, for resale in
Russia. This business requires both Chinese and Russian
corruption, including customs officials, local officials, and
allegedly both Russian and Chinese mafia for "protection" and
the "right to operate." According to Madjumder, the Russian
government is corrupt, and in Moscow the police, the Federal
Migration Service, and customs all receive bribes. He
maintained that the Moscow city government does not have a
China policy but that the Moscow city government revolves
around corruption and business interests. Nevertheless, the
traders perform a function as the Russian population looks to
these markets for cheap goods. The Moscow city government
has allowed them to operate, but when Moscow Mayor Yuriy
Luzhkov wanted the land under Cherkizovsky market for
housing, they were immediately dispersed (reftel). Gilbras
told us that the main goal of many Chinese laborers in Moscow
is to stockpile huge sums of money by expanding into the
Russian market and selling cheap Chinese-made goods.
According to Gilbras, although some of the illicit
cross-border Chinese activities are sensitive and the Chinese
government is aware of them, the Moscow city government does
not bother to investigate them.


4. (C) Even after the recent closure of the vast
Cherkizovsky market, there are at least four active Chinese
markets in Moscow. Yelena Burtina from the NGO Civic
Assistance told us that many immigrants re-established their
small businesses at different markets after the Cherkizovsky
crackdown. The newspaper Vedomosti reported that a "New
Cherkizovsky" market, the Balashikha Wholesale and Retail
Trade Complex, opened in a northeast suburb of Moscow.
Similarly, the Federal Migration Service reported that 1,000
Chinese traders from Cherkizovsky would move to the Moskovsky
retail market. Madjumder told us that about 3,000 Chinese
are currently working in a number of major trade centers near
urban highways. Some Chinese have fanned out to the Moscow
Oblast while others are continually searching for work. The
authorities recently closed Moscow's Sevastopol market due to
illegal trade, and the Russian police profited by
confiscating Chinese goods and selling them. Moscow Mayor

MOSCOW 00002722 002.2 OF 003


Yuriy Luzhkov claimed that he was cleaning up the city when
he closed some markets, but it seems that he was merely
playing on nationalist sentiments in the run-up to local
elections, since he did not comprehensively address the issue
of illegal Chinese trade.


5. (C) Chinese investors are another group that the Russian
government would like to encourage to invest in Russia. In
August 2009, the Russian-Chinese Center for Trade and
Economic Cooperation signed a billion dollar deal with Jin
Yuan, a Chinese real estate company, which plans to invest in
commercial real estate in Moscow. Chinese investors also
have questionable business practices, but could be a source
of needed investment in areas like construction or commeQrciaQl
development at a time when many Russian companies cannot
access financing to complete projects.


6. (C) A third category of Chinese in Moscow is the
construction workers and other low-wage workers in
"legitimate" economic areas, some of whom appear to be
trafficked, while others appear to have come of their own
volition looking for economic opportunity. They perform a
function that Russian workers do not want to perform; heavy
manual labor at a low wage. This group benefits Moscow when
the economy is growing, but not when the economy slows down.


7. (C) Finally, a fourth group is the Chinese workers
trafficked into Russia. This group includes brothel workers
and, it is rumored, a number of individuals in construction
and other low-wage jobs. This group gets no respect from
either the Russian or Chinese government, and appears to be
at the mercy of the Russian and Chinese mafia and coyotes.
Madjumder confirmed that the Chinese mafia, a highly
organized billion-dollar business, is active in Moscow. He
cited the example of Moscow city, where Chinese work, but
live in harsh conditions, such as in enormous crates located
on Moscow city property.


8. (C) According to Gilbras, the Chinese used to run their
own brothel on Prospect Mir for Chinese clientele. Today,
there are still many Chinese prostitutes in Moscow. Gilbras
confirmed that there is also trafficking of Chinese women,
but it is difficult to say if the problem is very prevalent.
He said that the Chinese men in Russia find poor women in
Chinese villages and lure them to Moscow to work as
prostitutes. The Russian Government does not have a national
coordinating body for human trafficking issues. Nor does it
provide dedicated funding or services to assist trafficking
victims. For these reasons, reliable information on the
number of people trafficked to Russia, including in Moscow,
is difficult to obtain.

Winners and Losers
--------------


9. (C) Clearly, corrupt officials on both sides of the
border and in numerous agencies (customs, immigration, local
officials who control retail permits) benefit from these
gray- and black-market activities. Gilbras argued that it is
not in the GOR's interest to complain about Moscow's Chinese
workers directly to the Chinese government. Russia is in the
midst of a demographic crisis that has caused a labor
shortage and it has an unemployment problem during the
current economic downturn. In October 2009, the Moscow Labor
and Employment department reported 195,000 vacancies and
77,400 unemployed citizens registered. According to Gilbras,
although the Russian population is generally anti-Chinese,
the Russians are fond of the many inexpensive Chinese
products available in Moscow. Many Chinese workers in Moscow
do not speak Russian and are unqualified for most well-paying
jobs, but they can trade. Gilbras observed that the Chinese
government financially assists the Chinese in Moscow as part
of its plan to increase business opportunities.


10. (C) Regarding the rest of the winners and losers,
Chinese and Russian mafia members not only gain, but appear
to coexist peacefully. Some Chinese workers do benefit in
that they receive earnings they presumably are not able to
receive in the depressed border regions where they originate,
but arguably at a high price, given the difficult working and
living conditions. The trafficked workers, both in the sex
trade, but also in the low-wage areas, lose out all the way
around. There is potential for Chinese investors to gain or
lose, depending on conditions. They tend to be a savvy bunch
and not overly concerned with keeping their hands clean, but
they have relatively few investments in Moscow, which hints
at the possibility that they do not think they can keep
control of their investments. Chinese workers in Moscow are

MOSCOW 00002722 003.2 OF 003


a mixed bag, but a lot of their activities seem to be less
than above-board.

Social Problems
--------------


11. (C) Svetlana Kurchenkova from the New Eurasia Foundation
told us that Russians do not respect the human rights of
Chinese migrants in Moscow. The public chamber in Moscow and
the Moscow city ombudsman follow migration issues only
tangentially. The Chinese regularly encounter problems with
housing, medicine, social welfare, and insurance. Burtina
added that the Chinese face problems living in Moscow due to
being illegal and working illegally. Obtaining children's
education is yet another hurdle. Once the Chinese are in
Moscow and they encounter problems, it is difficult to return
to China because it is too expensive to go back.

Comment
--------------


12. (C) The case of Chinese shady business in Moscow is yet
another compelling example of the Moscow city government
allowing illicit business interests to flourish. It
demonstrates how the corrupt Moscow city government seems to
focus on those issues in its financial interest. Moscow
could better address its labor shortages if the Moscow city
government developed a more humane policy, showing respect
for human rights and labor laws and treating the migrants
with dignity, rather than exploiting them as cheap labor.
Beyrle