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Who Gains? 
                 How will the trade reforms influence Sakhalin citizens used to buy things on Chinese marketplaces?

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February 6, 2007

Who Gains?

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According to the Russian Government decision, number of foreigners on marketplaces must not exceed 40% from January 15 to April 1; since April 1 the foreign citizens can visit marketplaces only as buyers. How will the reforms influence Sakhalin citizens used to buy things on Chinese marketplaces? The goods there had always been much cheaper though not of very good quality.

Nothing To Worry About

The Sakhalin Oblast Committee for Industry and Trade claims that the reform’s main goal is to develop safety and quality of goods and services for consumers, i.e. for us. Everything is right: there are no warm fitting-rooms at Chinese marketplaces, goods are often placed on the ground, and sellers have to spend the whole day on the street. It is time to begin civilized trade, the committee says. The prices have not increased as well yet. The Committee officers however do not answer how much the prices will rise after April 1.

Another reason for the trade reform is stated by the officials: why to buy low-grade goods in Chinese marketplaces if difference in prices is not so big in shops? You can fit on a new thing in a warm room and to return it back any time if you do not like it. Sakhalin citizens will trade on the market instead of foreigners. So it is nothing to worry about. Moreover, many Chinese citizens worked there illegally.

The RF Migration Service Sakhalin Oblast Branch Head Assistant Vladislav Markevich confirms the information. According to him, six Sakhalin entrepreneurs have been brought to responsibility for they provided working places to illegally coming foreigners. Interesting figures: last year 11.825 foreigners with permission to work in Sakhalin Oblast arrived, but only 1% of them had permission to trade. It means that only 100 foreigners worked on Sakhalin marketplaces legally last year.

Now the illegal sellers are leaving Sakhalin. Others come to the migration service office, pay 5 thousand rubles of fee and get permission to work. They have to find an employer in three days to register at work and living place.

What Is a Marketplace?

Regulatory documents to not contain a clear definition of a marketplace, the Federal Agency for State Regulation and Metrology (RosTechUregulirovaniye) Sakhalin Oblast Department Head Pavel Ivlev says. State standards are maintained for supermarkets or trade houses. As for marketplaces, they are “organizations creating conditions for negotiations based on sales and purchase agreements”. The Law About Retail Markets divides marketplaces into clothing, agricultural, etc. The document however needs amendments to maintain requirements for all kinds of marketplaces.

Buyers Suffer Most

The decision to make marketplaces “Russian” has already had some negative results. Counters with cheap goods got empty. It is really bad for retired people and families with low income, i.e. those who cannot buy clothes in shops. The same situation is in other Sakhalin towns. A week before the New Year can be mentioned here: 2 kids were almost killed in the jam.

The situation was a great present for Chinese entrepreneurs: they managed to sell all illiquid goods being stored for 2-3 years or even more. Their Sakhalin colleagues were on the verge of bankruptcy: they could not sell their goods so cheap and had almost no buyers.

The Chinese goods were not expensive because they never paid taxes trading illegally, an entrepreneur Sergey explains. Then, customs service was cheaper for them: Russians paid for kilograms while Chinese paid for cubic meters. It is easy to press the clothes in bags so that they took less volume.

What’s Next?

Nothing special. At the moment many Chinese citizens went to their homeland to celebrate the Eastern New Year. Part of them has re-registered their working places for local frontmen and will not lose much profit. The same will be after April, 1. Sakhalin citizens will be on the marketplaces instead Chinese, selling goods from China. Most of the profit will go out of Russia then. It is difficult to forecast the prices, but they are sure to be cheaper than in shops. The rumors are spread however that Syurpriz-2, Severny and Sakhalinsky marketplaces will be closed to build trade centers.

It is a good idea to improve marketplaces’ quality. Why not do it step by step? Sakhalin citizens just got another nervous breakdown. Was not it better to make foreigners to obey laws and sanitary regulations? There are a lot of questions. It seems that the Government and the State Duma have passed a “raw” law once again.

A Yuzhno-Sakhalinsk citizen Anna Petrovna is retired. We met her on the Chinese marketplace. She got used to buy things there but felt bad at the wild New Year sale. Anna Petrovna does not understand the Chinese’s fault before Government, and is very afraid that she will not be able to buy cheap shoes for summer. Who will cheer her up?

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Fbr 14
"One-Handed Bandits" Tightly Pressed 
                 In three years there will not be any casinos in cities: they will move to special gambling areas. Gambling machines will disappear as well. But what about the current situation?

Fbr 6
Who Gains? 
                 How will the trade reforms influence Sakhalin citizens used to buy things on Chinese marketplaces?

Jnr 30
Igor Bystrov: We Waste Half of Our Sea Resources 
                 Why we do not use our rich resources? Why our marketplaces are so poor and the prices for sea products are so high? The main reason must be the poor governing of the fishing branch.

Jnr 24
Gorny Vozdukh: How Much Is a Ticket? 
                 A lot of words have been said about Gorny Vozdukh base new born. But then Rosneft refused to finance the project and the region authorities came down to the business.

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Аналитика
Fbr 14 "One-Handed Bandits" Tightly Pressed
In three years there will not be any casinos in cities: they will move to special gambling areas. Gambling machines will disappear as well. But what about the current situation?
Fbr 6 Who Gains?
How will the trade reforms influence Sakhalin citizens used to buy things on Chinese marketplaces?
Jnr 30 Igor Bystrov: We Waste Half of Our Sea Resources
Why we do not use our rich resources? Why our marketplaces are so poor and the prices for sea products are so high? The main reason must be the poor governing of the fishing branch.
Jnr 24 Gorny Vozdukh: How Much Is a Ticket?
A lot of words have been said about Gorny Vozdukh base new born. But then Rosneft refused to finance the project and the region authorities came down to the business.
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