Race hatred simmering in Vladivostok: Chinese who are trading in the former closed Soviet city are facing ancient prejudices, writes Terry McCarthy in Tokyo

THERE was a queue to get into the Chinese market in Vladivostok. It was below freezing on a clear-sky Saturday morning and the ground inside the fenced-off market was solidly packed ice. The Chinese merchants stood in front of their goods, stamping their feet against the cold.

The Russian customers picked through the piles of leather jackets, jumpers, underwear, sunglasses and video games. They pretended to turn their noses up at the quality of the goods, but bargained hard - to the point of fisticuffs - when they wanted to buy something.

The Chinese, mostly from the poor north-east Chinese province of Heilongjiang across the border, have got used to the abuse, the bribes they have to pay, and even the Russian gangs who roam the streets at night looking for Chinese to beat up. The money they make in Vladivostok more than compensates for the hardships. 'I hate it here,' said Li Jinhua, standing in front of a collection of televison antennae. 'I hate the food, I hate the cold weather, and I hate the attitude of the people. But the money is good.' Lately, however, the Chinese have also had to deal with the full force of the local government, which last month introduced policies designed to keep them out of the country.

Here, in the Far East corner of Siberia, where Russia is hemmed in between the Pacific and China, the East-West conflict is being waged with gusto - in bare-knuckled form. Friction between the East and the West is nothing new: Britain's confrontation with China in the Opium wars is still being played out in the struggle over Hong Kong and the attempt by the US Navy in 1853 to open Japan to world trade is still unfinished business.

But nowhere are the tensions between East and West more visible, nor racist feelings more raw, than in the newly opened Russian Far East. For 50 years Vladivostok, as base of the Soviet Pacific Fleet, was entirely closed to outsiders. After it opened in 1992 a flood of industrious Chinese labourers and merchants entered the city and the surrounding region and the Russians were not ready for them. As they undercut local merchants in the markets, while taking labouring jobs for lower wages than Russians were prepared to accept, resentment began to grow.

Beatings of Chinese became common last year: few now go out after dark. There are no Chinese restaurants in Vladivostok - perhaps the only city in the world with a large Chinese population so deprived. And last November the provincial government announced strict visa regulations for Chinese coming across the border. At the same time Chinese merchants were de facto banned from the centre of the city and forced to sell their goods on the outskirts. And Cossacks have set up unofficial posts along the border to stop anyone who tries to sneak across without the right papers.

'Our biggest problem now is the police,' said Zao Dongwan, who was selling underwear and running shoes in the market. 'They want bribes all the time - if we do not pay, they either beat us, or take away our passports.' The cost of a visa is officially 1,200 roubles (45 pence) but Mr Zao said police now expect a minimum of 120,000 merely to consider the application. And, even with a visa, police often demand arbitrary contributions from the Chinese.

It is as if history were repeating itself. Before the Russian revolution Vladivostok was a colourful, cosmopolitan city with European and Japanese businessmen and Chinese shop-keepers and labourers mixing easily with the Russian (minority) population. Even in the 1920s 40 per cent of men of working age were Chinese. Russia's Far East has always had a labour shortage and the Chinese were quick to plug the gap. But Stalin gradually got rid of the Chinese, finally shooting several hundred in 1938 as alleged spies and deporting 10,000 to China.

Now the city is opening again - and the old Stalinist suspicions of outsiders are being revived. 'China has begun to carry out a policy aimed at penetrating the territories of Siberia . . . this policy includes shifting surplus population from North-east China,' claimed Victor Larin, director of the Institute of History, Archaeology and Ethnography of the Peoples of the Far East.

Dr Larin, who specialises in Chinese history, said the Chinese are seen as a potential 'Fifth column within the economy - it is that which the local authorities are trying to stop'. In a survey carried out by Dr Larin's institute last year only 2 per cent in Vladivostok said they would work with Chinese if they had the choice.

Fears of a masterplan in Peking to infiltrate and eventually dominate the economy of Russia's Far East may be exaggerated. But there is no doubt that in the Chinese provinces neighbouring Russia, particularly Heilongjiang, many opportunities glisten just over the border. Heilongjiang has 35 million people, Vladivostok and its province of Primorye a mere 2.2 million. This weight of people, and the pressure to make money at any cost in today's China, will mean more Chinese trying to profit from the rich natural resources of Russia's Far East.

And that in turn will mean racial tension as Russian jealousy of Chinese enterprise and thrift mounts. For the time being, with the Chinese less visible in the city, tension has gone down. But, says Victor Cherep kov, the mayor of Vladivostok, this is temporary. 'The measures against the Chinese are not efficient, and the consequences have been minimal. The numbers of Chinese have not gone down - they are just becoming more clever at getting into Russia.'