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September 27, 2012

Vladivostok Aspires to be Hot Pacific Rim City

by James Brooke

The world spotlight shone on Vladivostok in early September when 20 Asia-Pacific heads of government gathered for a business conference in Russia’s main Pacific port.

Looking ahead, regional officials and investors are working to turn Vladivostok into Russia’s first hot Pacific Rim city.

The region’s new governor, Vladimir Miklushevsky, says a key will be to attract investment from China - and to cut red tape. He is lining up investors for 19 development projects totaling $95 billion over the next decade.

 “We are going to reduce the administrative barriers for business projects,” he said.

Near the new $200 million airport, construction starts next year on a “Northern Macao” - Russia’s largest casino and resort complex

 “We are planning to develop it has an integrated resort, with gambling used as an anchor, and we’re planning to receive 10-12 million tourists a year,”  said Miklushvesky, governor of Russia’s Primorye region. “Why is tourism possible in Vladivostok?  First, it’s the unique location of Primorye.  There is a population from 200 to 300 million people within a one- to two-hour flight from us.  Of course, I mean citizens of China, Korea, and Japan.  And we are waiting for, and anticipating, their arrival.”

Salavat Rezbaev says another key to the region’s development will be investment from China. He is brokering Chinese investment for a $4 billion new port, and $30 billion new town.

 “Seven to 10 years ago, it would be unimaginable to offer a serious level of Chinese investment in certain areas of the economy, certain sectors,” said Rezbaev, who is chairman of New Age Capital Partners. “Right now, we’re witnessing it.  Not only are we witnessing it, we’re doing it, and we’re getting support from the regulators, from the government.”

Top-level backing was clear in early September when President Vladimir Putin inaugurated a plant to assemble Japanese Mazda cars in Vladivostok. Elizaveta Badalova represents Sollers, the Russian side of the joint venture.  Sollers also assembles SsangYong cars from South Korea in Vladivostok.

“Customers in Vladivostok used to buy used vehicles and the vehicles from Japan,” Badalova said.  “But now when they see their own plants and their own territory working, I think the impression is better.”

Foreign investors praise Vladivostok’s central location.

Clive Bowen, from Britain, plans to build a $200 million motor sports center near the new airport. 

“We are within an hour to an hour-and-a-half from all of the key markets for motor sports in Asia - so you have Japan, South Korea, and China,” he said, joined by the Russian Project President Vitaly Verkeenko.

By embracing Asia, Russia may finally create its own hot city on the Pacific Rim.