The twin cities along the China-Russia border.

SITUATED in northern Heilongjiang Province, Heihe looks across the Sino-Russian border at Blagoveshchensk, the administrative center of Russia's Amur Region. At their closest point, the two cities are just 750 meters apart. Their histories are therefore closely interrelated.

The Gift Swap That Launched a Thousand Deals

In September 1987, Heihe presented Blagoveshchensk with 208 tons of watermelons, or one kilogram for each of its citizens. In return, it received 306 tons of fertilizer from its Russian neighbor. This gift swap sparked off a flurry of border trade between the two nations, and much of it was carried out through these cities.

Border trade quickly expanded to every aspect of business. Merchants brought diverse cargoes such as furs, toys, razor blades, and tableware from Russia and other CIS countries to Heihe, and returned with many China-made goods like jewelry, sportswear, and down-padded anoraks.

Chinese cargo ships sailed to Heihe to pick up bulldozers from Chelyabinsk, sedans from Moscow and Novgorod, and other vehicles and equipment. Meanwhile Russian cargo vessels returned from Heihei laden with fresh and canned foodstuffs and clothing.

The two neighbors have set the pace in many aspects of bilateral cooperation between the two nations. They were the first to resume border trade between the two sides, the first to engage in cultural exchanges, and the first to establish an intergovernmental mechanism for regular conferences between China and Russia.

Cooperation: Full Steam Ahead

With the global economy's seemingly insatiable appetite for energy, almost everyone on the planet is feeling the pinch of higher oil prices. Fortunately, the abundant resources along the Sino-Russian border have injected tremendous vitality into the region.

In 2002 Heihe set up a processing zone for basic raw materials, where energy-guzzling plants like those producing industrial silicon, silicon carbide and cement are powered with electricity imported from Russia at a ridiculously cheap rate.

Since 2004, a number of enterprises have flocked to Heihe from all over China, drooling over the low cost energy from Russia and the prospect of the vast oil supply from the city's under-construction pipeline and refinery plant.

Heihe Xinghe Industries Development Co. was the first private Chinese company that imported power from Russia. According to the agreement it signed with the Russian company RAO EES Vostok Energo, eight Russian power lines will transmit 9.2 billion kWh by 2010, illuminating all the cities in Heilongjiang Province along the border with Russia, and powering an industrial zone in the region.

What's more, Xinghe is cooperating with the Russian Lanta Oil Company on the Amur-Heihe petroleum refinery and transportation project. Assessments of the project's impact on the local environment have already been completed, and ground will be broken soon.

All of Heihe's residents, not least its deputy mayor Hu Dongsheng are looking forward to the project's completion. They expect a golden era to roll in, lubricated by black fluid.