China and Russia have pledged to establish a 10-square-kilometre quasi-free trade zone along their borders, with an estimated investment of US$1 billion

The free trade zone, located in Suifenhe, a border city in Northeast China's Heilongjiang Province and Pogranichny, in Russia's Far East Region, is already in its first phase of construction, being carried out by the Hong Kong-funded Shimao Group, the real estate developer of the project on the Chinese side. A Russian company will be in charge of the Russian side. Wu Yan, manager of Shimao's Administration Department, said the first phase involves 1.53 square kilometres from China and 3 square kilometres from Russia. The whole zone will cover 3.5-square kilometres of land from China and 7 square kilometres from Russia. The zone will offer a platform for commodity trading, tourism and entertainment sectors, service trades, a storage sector, processing trades, transit trades and a high-tech park, Wu said. Rumours say a red light district and gambling facilities will be established on the Russian side of the trade zone.