Heihe FTZ boosts Sino-Russian border trade

Where China meets Russia across the Heilongjiang River, the border city of Heihe is turning its unique geographic position into an engine of economic growth. By expanding border trade, Heilongjiang province is seeking not only to boost commerce and revitalize border regions, but also to raise local incomes, strengthen border governance and foster ethnic unity.

Approved in August 2019, the Heihe Area of China (Heilongjiang) Pilot Free Trade Zone occupies a strategic position in Northeast Asia. Heihe, a prefecture-level city in Heilongjiang province, sits directly across the Heilongjiang River from Blagoveshchensk, capital of Russia's Amur Oblast and a major city in the Russian Far East.

The two cities form the closest pair of corresponding cities along the China-Russia border and boast a comprehensive range of functions, making Heihe a natural gateway for cross-border trade and economic cooperation.

At the heart of this activity is the border trade center in the Heihe area of the Heilongjiang free trade zone. Spanning both highway and water ports, the center has helped build an industrial cluster around border trade. Its core function is to provide a platform for the local processing of imported goods while creating new opportunities to increase the incomes of border residents.

Under Chinese regulations, border trade refers to the exchange of goods by residents living in border areas at designated trading points or markets within 20 kilometers of a land border. Heihe's main urban area falls within this designated border trade zone, with local border residents playing a central role in cross-border commerce.

Zhong Huanyu, director of the foreign trade and cooperation center of the Heihe Area of China (Heilongjiang) Pilot Free Trade Zone, said the core policy governing border trade allows border residents to import goods worth up to 8,000 yuan ($1,193) per person per day free of import tariffs and import-related value-added tax.

The policy is designed to invigorate economic activity in border areas, promote trade prosperity, ensure supplies for the daily needs of border residents and improve their quality of life.

From January to June this year, border trade in Heihe reached 229 million yuan, accounting for 43.87 percent of Heilongjiang's total border trade. Russian soybeans accounted for over 98 percent of total imports, while imports of oats hit more than 800,000 yuan. Prepackaged goods accounted for 4.46 million yuan.

Initially, border residents were allowed only to exchange goods within designated areas. To enable them to better benefit from the policy, a new model of local processing of goods imported through border trade was later introduced. Under the arrangement, raw materials can be imported from Russia, processed locally and then sold as finished products.

The Heihe highway port border trade industrial park, covering 63,000 square meters, provides companies with standardized factory buildings, cold-chain storage and comprehensive services. The park aims to develop a new manufacturing cluster for border trade, primarily supporting local processing that adds at least 20 percent in value to raw materials imported from Russia.

In the first half, the cumulative value of locally processed trade in Heihe reached about 225 million yuan.

Since the implementation of the border trade policy, more than 1,200 jobs have been created directly, while over 5,000 jobs have been generated indirectly, Zhong said. In addition to benefiting from the daily tax exemption on goods worth up to 8,000 yuan, border residents can also find employment at local processing plants.

Beyond soybeans, Heihe is also exploring the import of Russian chicken feet through border trade, along with other products such as butter, dried fruits from Central Asia and crystal glassware.

Early last year, a designated inspection and supervision facility at the Heihe port for imported meat and chilled aquatic products received approval. The facility has recently completed acceptance inspections conducted by the General Administration of Customs.

"Going forward, we hope to achieve large-scale imports of meat and chilled aquatic products from Russia and Belarus," Zhong said. "We are also focusing on promoting imports through border trade of high-quality products such as animal protein and butter from Belarus. At the same time, we are working to connect with leading agricultural product processing companies and cold-chain logistics enterprises in China and Russia, introduce cross-border e-commerce platforms, and integrate high-value-added projects involving deep processing of soy protein, graded meat packaging, chilled cold-chain logistics and warehousing."

On June 6, 2025, the first test order under Heilongjiang's fully digitized service process for border residents to independently participate in border trade was completed at the Heihe highway port border trade exchange point. The system replaced traditional manual declarations and cumbersome inspection procedures, significantly improving trade efficiency and reducing costs.

Border residents simply place their ID cards on an integrated border trade terminal. Without entering any characters, they can complete the entire declaration process by clicking "next" just four times. Information is collected through facial recognition and ID verification, while the full range of services — including cross-border advance payments and smart customs declarations — can be completed in just 90 seconds.

Qiao Binglian, a border resident in Heihe, said the policy allows people from inland areas to use border residents' import quotas to bring in goods and benefit from the tax exemption.

Qiao, who is in his 70s, belongs to the Zhong'an Cooperative, which has between 500 and 600 members. Oil processing plants and other buyers from inland areas import soybeans through the cooperative. Border residents can earn about 30 yuan each time they complete a customs declaration on behalf of buyers through facial-recognition authentication.

Members of the cooperative can increase their monthly income by 300 to 400 yuan at the lower end and as much as 700 to 800 yuan at the higher end.

Heilongjiang Fengde Hengtai Grain and Oil Co is the first company in the Heihe Area of China (Heilongjiang) Pilot Free Trade Zone to import and process Russian soybeans under the policy allowing locally processed imports through border residents' trade.

The company's grain and oil processing project was completed and began operations in July 2023. Covering an area of 40,000 sq m, the facility has an annual soybean processing capacity of 100,000 metric tons, producing 64,000 tons of high and low-temperature soybean meal annually.

Lyu Xin, deputy general manager of Fengde Hengtai, said the company mainly works through cooperatives of border residents, who collectively purchase soybeans in Russia, and the company then buys the soybeans from them for further processing.

Because border residents enjoy the tax exemption, the company can save more than 200 yuan for every ton of soybeans it purchases compared with the cost of importing soybeans from Russia through normal trade channels, Lyu said. At the same time, the company pays border residents 30 yuan for each customs declaration, helping increase their incomes.

Looking ahead, Fengde Hengtai plans to install a production line with an annual capacity of 40,000 tons of textured soybean protein. Construction is scheduled to begin this month and be completed in December 2027. The high-quality textured soybean protein products will be marketed nationwide.

By continuing to expand its deep-processing chain for imported soybeans, the company aims to increase the value added of processed products in Heihe.