After completing his four-day visit to China, Putin boarded a flight back to Russia and presented an unexpected “gift.” Russian officials announced that an intergovernmental agreement regarding the Far East International Advanced Development Zone will be signed with China in early 2025.
This agreement is extraordinary, as it will provide unprecedented preferential terms for Chinese companies, including a 10-year corporate income tax exemption.
Putin’s Unusual Visit to China: More Than Just Friendly Smiles
Putin’s visit to China was certainly not ordinary. Not only did he bring friendly smiles, but also concrete cooperation commitments.
Why the Far East Development Zone Matters to China
According to Altabaev, Deputy Minister of the Russian Ministry for Far East and Arctic Development, during the Eastern Economic Forum held from September 3 to 6, the intergovernmental agreement is expected to be signed in early 2025. This agreement will be one of the first of its kind between Russia and China.
What does an intergovernmental agreement mean? It means that the two governments directly endorse the projects, providing political backing and a level of execution far beyond typical commercial agreements.
The speed of this move by Russia is astonishing. On July 31, Putin signed related laws, and by August 21, the agreement with China was already being pushed forward. This urgency indicates how crucial it is for Russia to develop its Far East.
The International Advanced Development Zone is a special mechanism introduced by Russia to offer preferential conditions to investors. According to the law Putin signed on July 31, these development zones will officially begin operations on January 1, 2026.
Enterprises in these zones will benefit from super favorable policies, including a 10-year exemption from corporate income tax for newly established companies, along with 20 years of preferential treatment, limited inspections, and relaxed regulations.
Russia is also offering “dual protection”: companies that register as Russian entities within Russia will have their data kept confidential, preventing Western sanctions from finding a breakthrough; at the same time, they will enjoy tax advantages. This combination of “data invisibility” and “tax holidays” truly demonstrates Russia’s sincerity.
Why Russia Is Eager to Cooperate with China
Russia’s eagerness to strengthen ties with China is simple: the pressure from Western sanctions is immense. Although Russia’s economy has shown remarkable resilience, the large-scale withdrawal of foreign investments has put significant pressure on Putin’s government.
By turning its focus eastward, Russia seeks not only Chinese capital and technology but also aims to strengthen its position in the global supply chain, stabilizing its economic foundation.
According to Chekunov, Minister of Russia’s Ministry for Far East and Arctic Development, more than 10 projects are currently under review, five of which were proposed by Chinese partners. These projects mostly involve high-tech equipment such as laser instruments, robots, and composite materials.
For China, this agreement represents a huge opportunity. Chinese enterprises will gain a special channel to enter the Russian market, enjoy the same treatment as local companies, and avoid the impacts of Western sanctions.
Russia has promised to provide “special confidentiality systems,” including an undisclosed list of registered companies in the International Advanced Development Zone, limiting the information available about these companies, and maintaining tax and legal conditions unchanged for 15 years. This will provide Chinese enterprises with a stable operating environment.
Expanding the Belt and Road Initiative
Most importantly, this agreement will help China expand the breadth and depth of the Belt and Road Initiative, strengthening economic ties with Russia and achieving mutually beneficial cooperation.
Potential Challenges and the Future of China-Russia Cooperation
Although the prospects are promising, this plan faces many practical difficulties. Back in 2013, Putin proposed the idea of establishing advanced development zones, but so far, apart from a few energy projects, there has not been a surge of investment in the Far East.
A major reason for this is the region’s underdeveloped infrastructure. Take Heixiazi Island, located on the China-Russia border, for example. There is still no railway connection, and the island mainly relies on roads and shipping. Its infrastructure is rudimentary, and even basic industrial land is difficult to secure.
There is also the issue of labor shortages. The population density in the Russian Far East is only 1.2 people per square kilometer, and the Russia-Ukraine conflict has exacerbated this problem. In 2022, Russia’s working-age population decreased by about 2 million, with many skilled workers and professionals choosing to leave the country.
Despite these challenges, Putin’s visit to China has yielded significant outcomes. In addition to the advanced development zone agreement, China, Russia, and Mongolia have signed a memorandum of understanding on the construction of the “Power of Siberia-2” gas pipeline.
Once completed, this pipeline will allow Russia to supply 50 billion cubic meters of natural gas to China every year via Mongolia. For Russia, this provides a long-term buyer, greatly easing its financial pressures.
During his visit, Putin also met with Indian Prime Minister Modi and North Korean leader Kim Jong-un, further expanding Russia’s influence in the East. In one sentence, Putin’s visit to China can be summed up as: “China’s good is the world’s good.”
Strategic Importance of the Far East Development
Developing the Far East is of strategic significance to Russia. The country is gradually restructuring its economic geography, turning its focus toward the East and developing its vast Far East region.
This region is rich in resources but underdeveloped, requiring foreign capital and technological input. As a neighboring country, China is naturally Russia’s first choice for cooperation.
If successful, this development could greatly reduce Russia’s reliance on Western markets, creating a more diversified economic structure and enhancing its resilience to risks.
While the future of China-Russia Far East cooperation looks promising, challenges remain. In addition to infrastructure and labor issues, both sides need to overcome cultural differences and management style barriers.
Experts believe that if China and Russia can focus on key areas such as energy processing, agricultural development, and logistics hub construction, they can create successful demonstration projects. Like playing Go, it’s better to create a few “eyes” first than to expand everywhere.
Russian Deputy Prime Minister Trutnev stated that countries in the Asia-Pacific region are most interested in the International Advanced Development Zone, but Russia is willing to cooperate with all countries. This open attitude will help attract more investment.
Conclusion
The China-Russia cooperation on the Far East International Advanced Development Zone goes beyond mere economic considerations. It is a strong response to Western sanctions and showcases the strength and strategic nature of China-Russia relations.
For Russia, this is an important step in breaking through Western containment. For China, it is a great opportunity to advance the Belt and Road Initiative and deepen ties with its neighboring countries.
Through this pragmatic cooperation, China and Russia are showing the world a new model of international relations—based not on hegemony and oppression, but on equality and mutual benefit.
Putin’s departure from China with this “gift” truly surprised many. The Far East International Advanced Development Zone agreement not only reflects the high level of China-Russia relations but also demonstrates both countries’ determination to tackle international challenges together.
The determination of Russia to develop the Far East is great, but the obstacles are not small. However, as long as China and Russia cooperate hand in hand, leveraging each other’s strengths, they can overcome these challenges and achieve the goal of shared development.
This “gift” is just the beginning, and there is much potential for future China-Russia cooperation. It seems that Putin’s visit to China was indeed a “fruitful” one, and China has also gained tangible benefits, creating a win-win situation that is truly gratifying.
