Located over 6,000 km from the capital city of Moscow, the city of Vladivostok (Russian Federation) is situated at the crossroads between China, Japan, and South Korea. Today, it is proving to be an ideal gateway that helps Russia step into one of Asia's largest and wealthiest regions.
Two Transformations
In ancient times, the territory of Vladivostok belonged to the Balhae Kingdom (698–926). Beginning in the 10th century, it fell under the control of the Khitan and Mongol tribes, and subsequently the Manchu people of China. In the 13th century, several cities emerged within the Primorsky region, but they were quickly destroyed by Mongol forces in 1233.
For the next several hundred years, this land became a battleground between the Mongols and the Manchus, falling into oblivion until the second half of the 19th century. After Russia signed territorial and trade treaties with China in 1858, Vladivostok officially came under the administration of the Kremlin.
Throughout its nearly 160-year history, Vladivostok transformed from a world-class commercial hub during the Tsarist era into one of the world's most secretive military bases during the Soviet era. Today, Vladivostok is envisioned as the Kremlin's trump card in its strategy to expand its presence aggressively into the Pacific.
The construction of the city began in the second half of the 19th century, despite being located thousands of miles away from the capital at the time. The Russian Tsar demonstrated his ambition to further expand his vast Eurasian empire by naming the city Vladivostok, which means "Ruler of the East" in Russian. Immediately after its founding, the leader of the Russian Empire affirmed that the city would become the most vital stronghold guarding the eastern frontier of the country and overseeing the Amur Bay.
Throughout the remainder of the 19th century, in addition to its geographical importance, Vladivostok was known as a famous stopover for merchants thanks to its openness. Traders from Japan, South Korea, China, and even the United States traveled thousands of miles here to trade diamonds, gold, silver, and many other rare items. When the famous Russian writer Anton Chekhov visited this Far Eastern city in 1890, he remarked that Vladivostok was the busiest "European city" in "Asia."
Following the Russo-Japanese War in 1904, Vladivostok rapidly transformed into the Russian Imperial Navy's most powerful base in the Pacific. By World War II, the city was built up to become a formidable fortress for the Soviet Red Army against Nazi forces. In 1948, the Soviet Union decided to militarize the city, turning the center of Russia's Far East region into a secret base and deploying an array of state-of-the-art weaponry. Ten years later, Vladivostok was officially declared a "closed city" to foreigners, as well as to Soviet citizens who did not possess special permits.
In 1992, nearly a year after the dissolution of the Soviet Union, Vladivostok was once again opened to all domestic and international visitors. After nearly two decades, today's Vladivostok—with strategic investment from President Vladimir Putin—has quickly become one of the most open and free cities in Russia, and is recognized as one of the most dynamic regions in the world.
Russia's Gateway to Asia?
Recognizing the strategic location of Vladivostok, the Kremlin has continuously invested in this Far Eastern city for many years, with the expectation of turning it into a "magical gateway" that brings Russia to wealthy and powerful Asian investors.
To that end, in July 2015, Russian President Vladimir Putin signed a law establishing a "free port" in Vladivostok, a gateway connecting Russia with the Pacific—a major step in Moscow's pivot toward Asia. Under this law, Russia slashed a massive amount of paperwork and streamlined bureaucratic regulations to protect investors in the city.
Today, Vladivostok is one of the most open and bustling cities in Russia.
Previously, in 2012, with the desire to showcase a powerful image of a major power in the Asia-Pacific region, Moscow spent 20 billion USD to invest in upgrading Vladivostok for the APEC summit. Two colossal cable-stayed bridges were constructed to connect the city's major islands. One of them became the longest cable-stayed bridge over water in the world, before yielding the title to another bridge in China.
This was considered Russia's largest construction program since the collapse of the Soviet Union. By clearly demonstrating its commitment to the vast Far East region, Russia seemingly aimed for two strategic goals: first, to firmly secure its eastern border, and second, to develop economic cooperation with neighboring Asian countries.
By December 2015, Russian President Putin once again proved his special focus on Vladivostok when he declared to Parliament that developing the Far East region was a "national priority." It is worth noting that while this region covers an area equivalent to India, it is home to fewer than 6.5 million people.
Since Mr. Putin introduced the policy to prioritize the development of the Far East, Vladivostok has undergone significant changes: the city has become more modern, transportation more convenient, and the infrastructure system is now robust enough to support economic development for decades to come. According to Business Insider, the amount of investment capital flowing into the Far East increased by more than 10% in 2016.
With strong decisions from the Kremlin, investors registered to operate in various sectors in this region will enjoy a 5-year consecutive tax exemption, while many other businesses will only be subject to a very low income tax rate of around 5%. In addition, an on-arrival visa policy will soon be applied to citizens of numerous countries to boost investment activities in Vladivostok.
Mr. Vasily Markov, a leader at the Russian branch of the audit firm Deloitte, commented: "The bureaucratic process in Vladivostok is now quite pleasant and requires very little paperwork, which is rare in Russia. Although many people are still hesitant and cautious, I see that investor interest here is enormous," according to Sputnik.
Meanwhile, Mr. Salvatore Babones, a specialist in social policy and sociology at the University of Sydney, Australia, noted: "The new policies that Moscow has offered to investors are not unprecedented in the world, but they represent a major shift within Russia. It is the clearest evidence of the Russian desire to open up the country to the world and will strongly accelerate the integration of this Russian city with Northeast Asia."
This expert asserted that within a short period, Vladivostok has the potential to become a major economic hub in Asia, on par with Singapore or Shanghai in China.
However, according to some economists, those changes are not yet sufficient to generate success commensurate with Vladivostok's advantages, and a more open mechanism aimed at helping schools and businesses attract talent from around the world is precisely what the capital of the Far East needs most at this time.
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Geography Vladivostok is located in the Russian Far East, on the coast of the Sea of Japan, near the border region of the PRC - Russian Federation - North Korea. The city is situated at the southern tip of the Muravyov-Amursky Peninsula, which is approximately 30 km wide and 12 km long. The total area of the city is 600 km².
The highest point is Mount Kholodilnik, at an elevation of 275m.
The railway distance from Vladivostok to Moscow is 9,302 km.
Climate
Average annual temperature: 4.3°C
Average January temperature: −13.7°C
Average August temperature: 20.2°C
Average annual precipitation: 722 mm
