BEIJING: Holding the Asia-Pacific Economic Cooperation summit in Vladivostok will give Russia a chance to remind the world that two-thirds of its vast territory is in Asia and that it has a longer stretch of the Pacific coastline than any other country. After the break-up of the Soviet Union and the end of the Cold War, Russia has all but vanished from the Asia-Pacific horizon.

The name of the game has changed: Ideological confrontation and military stand-offs have been succeeded by economic competition under globalisation. Russia, a champion of the former, is yet to prove itself a modern economic power. Merely playing host to a score of APEC leaders will not do the job, really, because Russia needs to upgrade its economy to make its presence genuinely felt in Asia and the Pacific.

Can an opening to Asia-Pacific help? It surely can. Some of the Russian regions most hit by de-industrialisation and falling population are East Siberia and the Far East. These territories physically abut some of Asia-Pacific's most dynamic or most advanced economies: China, Japan and the Republic of Korea. Once an industrial power itself, Russia has now turned into a raw materials' base for its neighbours. Can Russia do better? It must, if it wants to stay in one piece.

To modernise, it needs capital investments and technology transfers from the neighbouring countries, which it should treat as its own modernisation resources. To be able to attract and then absorb those transfers, it needs to improve its business environment. Again, Asian countries' experience would be useful.

Russian President Vladimir Putin evidently understands that. Long accustomed to viewing Siberia as its backyard and the Far East as its bulwark, Moscow is now visibly rebalancing toward Asia and the Pacific. Holding this year's APEC summit in Vladivostok — and not, as some suggested, in St. Petersburg or Moscow — is one way of building elements of modern infrastructure in the far-flung outpost; the establishment of a special ministry for the Far East in Khabarovsk is another.

Putin, Russian Prime Minister Dmitry Medvedev and their ministers log long hours visiting the region. These are too traditional and probably not the most effective ways of spurring regional development, but they suggest that the problem is certainly understood, even if the solution still looks rather distant.

An additional factor pushing Moscow eastward is the eurozone debt crisis. The European Union, Russia's most important economic partner by far (it accounts for just more than 50 per cent of Moscow's overall foreign trade), is likely to spend a decade without economic growth. In contrast, China, even if its economy is slowing down, is still growing at a rate that most other countries can only envy.

The Sino-Russian economic interaction does have its share of problems. Energy cooperation, in particular, has fallen short of either country's expectations, primarily in the natural gas area. The plans developed three years ago for close cross-border ties between the Russian Far East and China's Northeast, have so far failed to materialise. There are concerns in Russia, including in the government, over labour immigration from China, and the government itself is occasionally accused by its domestic opponents of turning the country, beginning from the Far East, into an economic appendage of the Chinese colossus.However, China has remained important for Russia since 2000 and overtook Germany as Russia's largest trading partner in 2011. And Russians are thinking hard about ways to both expand bilateral trade and improve the structure of its exports, dominated by natural resources.

By arrangement with the China Daily/ANN