Streetwise Professor

May 25, 2006

China & Siberia

Filed under: Commodities,Politics,Russia — The Professor @ 9:49 am

Columbia professor Padna Desai writes about the Russian demographic problem in The Wall Street Journal. Most of the article supports my analysis from earlier posts, but contrary to my speculation that the future may see a conflict between China and Russia over Siberia, she opines:

Some Russians also fear that the Chinese, seeking to increase trade, will come into the Far East and settle down permanently — and that Beijing will then somehow stake a claim on Russian territory! This is nonsense, of course, but I encountered such fevered scenarios of the “yellow peril” even among some liberal acquaintances on my recent trip to Russia.

I certainly don’t view such a conflict as a probability 1 event, but in my view it is anything but nonsense. Nature abhors a vacuum, and if present population trends continue, Siberia will become a human vacuum–but one with vast mineral wealth that China wouldn’t mind having. It is hard to imagine that a depopulated Siberia coexisting side by side with a vibrant, energy hungry, proud, and confident China is a stable long run equilibrium. Moreover, the Chinese have a long historical memory, with a particular talent for nursing historical wounds suffered at the hands of foreigners. Although the Russians do not rank with the British or the Japanese as exploiters of China during its humiliations in the 19th and early-20th centuries, they were not blameless either. As a result, I wish I shared Ms. Desai’s blithe optimism about Chinese-Russian relations over the long term, but I don’t.

Ms. Desai also suggests that immigration is a solution to Russia’s demographic dilemma. Good luck with that. Ask the Western Europeans how the immigration thing is working out for them. And if it doesn’t work in Western Europe–which it doesn’t, pace Paris car burnings, honor killings in Germany, Britain, and Sweden, etc.–it sure as hell isn’t going to work in Russia.

Addendum. Apparently the world, Goldilocks-like, is looking for a level of immigration that is “just right.” In the US, many people (arguably a majority) think it is too much. In Russia, too little. A couple of quick thoughts. First, what kind of immigrants are we talking about? Immigrants are not homogeneous. Some are skilled. Many are not. What kind of immigrants is it necessary to attract? How can you attract those immigrants (the skilled ones, presumably) without attracting the less desirable ones? Is immigration consistent with social welfare policy? (One of my intellectual heroes, Richard Epstein, said in a seminar at Michigan in the 90s that his primary objection to the welfare state is that it was incompatible with unrestricted immigration. Like many Epstein positions, not quite in the mainstream, but logically consistent and intellectually serious.) Put differently, how can you attract immigrants without attracting a disproportionate number of “gimmie-grants?” Second, where are the immigrants to Russia going to come from? China–maybe. The Middle East–probably not, and given the European experiences, its arguable that this represents the most desirable source of immigrants. And are people from places where it is routinely 35+ degrees C really want to move to where it is routinely 35- degrees C? Central Asia? Again, the disparity between educational attainment in most of Russia and Central Asia is immense, and it is doubtful that Central Asian immigrants will address the Russian labor problem. Third, the difficulties of assimilating immigrants have proven very difficult in Europe and the US, but they are likely to be immensely more difficult in Russia. Russia has no tradition of accepting immigrants. Russia is historically more insular, and arguably more xenophobic than the US or Western Europe (which is not to say by any means that xenophobia is absent in those places–this is an ordinal statement.) Language will be a barrier.

All in all, saying that immigration is the solution to Russia’s demographic challenge is fantasy. It reminds me of the standard economist joke, of which there are several variations, one of which is: An economist and a physicist are on the 50th floor of a high rise hotel. The fire alarm goes off. The economist and the physicist look out the window, and see that the entire lower part of the building is engulfed in flame. The physicist says–“there’s no way out. We’re going to die.” The economist says–“Don’t worry. We’ll just assume the existence of a 50 story ladder.” Assuming immigration to be the “solution” to Russia’s existential conundrum is no more realistic.

Addendum II. Mark Steyn weighs in:

The answer to many of China’s problems lies just across its northern border: the fast depopulating, resource-rich Russian east, which Beijing will wind up with one way or the other. If you read Mark Bassin’s masterful book Imperial Visions : Nationalist Imagination and Geographical Expansion in the Russian Far East, 1840-1865, it’s hard not to notice that the rationale behind the Russians’ sale of Alaska applies just as well to a big swath of their eastern provinces today. A century and a half ago, Grand Duke Konstantin Nikolaevich, the brother of Alexander II, argued that the Russian Empire couldn’t hold its North American territory and that one day either Britain or the United States would simply take it, so why not sell it to them first? The same argument applies now to the 2,000 miles of the Russo-Chinese border. Vladivostok will return to its old name of Haishenwei before too long.

And, given Russia’s own gender imbalance — between sickly men of low life expectancy and long-lived robust women — it doesn’t take much imagination to see a Sino-Russian union as a marriage of convenience in more than just the geopolitical sense. That’s the key difference between transatlantic Ouija boards on China: as the cannier American analysts see it, Beijing is a threat to Washington not because of its strength but because of its weakness.

As always, Steyn provides an interesting perspective. The Alaska II scenario is not implausible, but Siberia is more of an integral part of Russia–both physically and more importantly psychologically–than Alaska ever was. This makes a transactional transfer of Siberia less likely, and a violent one much more likely.

Addendum III. Richard Posner’s observation on the US & Mexico pertains to the feasibility of immigration as a palliative for Russia’s demographic problem:

As soon as per capita income in a country reaches about a third of the American level, immigration from that country dries up. Emigration is very costly emotionally as well as financially, given language and other barriers to a smooth transition to a new country, and so is frequent only when there are enormous wealth disparities between one’s homeland and a rich country like the United States. The more one worries about illegal immigrants, the more one should favor policies designed to bring about greater global income equality.

Since per capita income in Russia is already relatively low, the differential between Russian incomes and the incomes in possible sources of immigration is already small. Moreover, it is likely that the “language and other barriers to a smooth transition to a new country” are substantially greater between Russia and other countries than between the US and Mexico, requiring an even larger income differential to attract substantial immigration. In other words, large immigration is (not surprisingly) something that occurs in rich countries, and is not a panacea for the labor problems of relatively poor ones (like Russia.)

Russian efforts would be better devoted to keeping its high skill people from going west, to the US or Europe, than to attracting low skill people north or east to Russia.

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