The presidential campaign is gaining momentum, and videos promoting the candidate from the “power party” are gradually filling up the prime time on both major state Russian TV channels. One of the main propaganda tricks, to which Putin’s canvassers now love to resort, is putting in the limelight the workers and staff of certain plants and factories which have allegedly prospered over the years of Putin’s being in power – in contrast with the “goddamn nineties,” which are a favorite target for the incumbent Russian leaders. Nevertheless, the phrase “certain plants” was not incidental because, just like years ago, entire industries and even groups of industries in Russia’s economy are hopelessly stagnating. The blame for this lies not only on the late Boris Yeltsin and his milieu, but also on his successors who have been in power for all these 12 years.
Light industry is one of those critical spheres of economy. Any Russian citizen, who is not blind and still keeps his mental faculties and who goes shopping at least occasionally, can see that shops and markets are being increasingly filled with clothes and footwear from China. No wonder: according to the governmental daily Rossiyskaya Gazeta, last fall our consumer goods market was filled with Chinese goods for 60 percent already. Just think: only one country provides almost two-thirds of Russian citizens’ needs in footwear, textiles, and clothes! Again, no wonder. China had outpaced its major rivals from Western Europe and became our country’s main trade partner. Now, let us consider the structure of Russia’s huge import from China.
According to the data provided by the Ministry of Economic Development of the Russian Federation, the first place there belongs (which has long ceased to be a surprise) to machines, equipment, and electrical appliances, which together account for almost a half of all China’s export to our country. Light industry products, which make up 20 percent of Chinese export to Russia, come second. This is indeed a huge mass of goods, and most of it is affordable for the major part of the Russian population.
Supposing that Chinese import disappears from our stores, Russians will literally remain naked and barefoot. Brand footwear from Italian or Spanish (let alone British) manufacturers is affordable only to the privileged few, just like European brands of clothing, available at expensive boutiques or chain stores. Thus we see a graphic example of China, which for an umpteenth time helps out destitute Russia – whose leaders, in turn, never miss a chance to preach to its closest neighbors.
But what about Russian light industry – or, to be more precise, its remnants? According to Boris Fomin, president of the Russian Union of Entrepreneurs of Textile and Light Industries, the resuscitation of our light industry requires the investment of 20-30 billion dollars per year. Nowadays, the governmental subsidy to these branches is under 500 million dollars. Feel the difference, so to speak. Perhaps, Russia’s leaders are indulging in their favorite pastime: waiting for private investments to pour miraculously into light industry. However, private capitals keep flowing in a different direction. Instead of nourishing domestic industry, they have been for years leaking to deposits in the Western bank vaults, or get invested into luxurious London property, or spent on yachts on the French Cote d’Azur, or squandered at Courchevel parties. In the meantime, Russian textile and shoe factories keep dilapidating. So it is no mere coincidence that Chinese business circles consider the Russian clothing and footwear market to be one of the most promising for the expansion of their exports. In doing so, they are prepared to squeeze out the remaining West European rivals through extending offers to various categories of Russian consumers, in particular, those who wish to buy high quality goods, albeit more expensive.
This wide range of goods presents no problem for Chinese light industry, which is now a global leader in terms of production output. Meanwhile, the Chinese government is not going to curtail subsidies to domestic textile and footwear enterprises, which exceed three billion dollars per year. Please mind that these are regular investments, which have never been cut down over the recent years, and which enable a constant upgrading and expansion of production, creating new jobs and ensuring effective modernization. By the way, China defended its right to regular governmental assistance to its own manufacturers of textiles and footwear when it was negotiating joining the WTO. But who knows what do the final clauses of Russia’s WTO accession documents say? How far (if ever) will the interests of the light industry be protected? Russian public will only get to learn about that during the ratification of these documents at the State Duma.
In the meantime, presidential candidate Putin keeps talking about some plans of “joining the world’s top five economies.” Not with such decay in industry, and such level of dependence on imports. What top five economies can we talk about if we are being fed and dressed by a new super-power, like some underdeveloped banana republic, hopelessly lagging behind the developed world.
My fellow compatriots in the business of regularly scaring other Russian citizens with the “expansion of Chinese goods” should remember the old proverb: you can’t blame the mirror for your ugly face. The same goes for the Chinese import: you should not complain about its invasion, if the government has ruined the domestic industry and, instead of saving it, just watches it go down in flames.
