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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: 
 ¶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