Disappearing forests
The Zabaikalsky Krai, a region in Eastern Siberia between Lake Baikal and the Russian Far East, is one of the worst affected areas.
According to the Federal Agency for Forestry, illegal logging here accounts for more than two million cubic metres a year.
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The agency warned the region could be stripped of wood reserves in five years if nothing is done to stop the criminal trade.
Last May, Yuri Trutnev, the Russian Minister for Natural Resources, paid a surprise visit and said he was shocked by what he found.
He complained that "entire bandit villages" were cutting down trees, loading them on railway sidings and sending them to China.
Vladimir Putin recently described the export of unprocessed timber as "comparable with embezzlement".
"Our neighbours continue to make billions of dollars on Russian timber, but we are doing very little to create conditions for wood processing here at home," Putin said.
Chinese wealth
A decade ago, Manzhouli was a dusty border town in a corner of Inner Mongolia in North East China. Now it is a gleaming metropolis built on the wealth of timber from the Siberian forests. I understood the Russian president’s resentment.
Standing in a vast lumber yard surrounded by piles and piles of wood, I saw a forest of cranes and, beyond them, a cluster of brightly-coloured skyscrapers.
This surreal city plays host to a stream of Russian tourists who travel for days to buy clothes, cameras and DVDs in glitzy shopping malls.
Guang Delin, the boss of just one of the 70 timber businesses in Manzhouli, took us to lunch at an extraordinary restaurant.
Outside an icy wind blew across the steppe, but inside the atmosphere was tropical.
The restaurant was decorated with lush green plants and fish tanks. On my way to our table, I noticed a couple of alligators basking on the edge of an artificial pond.
As I watched waitresses carrying plates of steaming noodles past tinkling fountains, I thought about a woman I met on the other side of the border in Russia.
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  Life is very hard here and now the collective farm has fallen apart there is almost no work  Natasha
Lives in a ‘bandit village’ |
Natasha lives in one of the so called "bandit villages" in Zabaikalsky Krai, seven hours drive on bad roads from the regional capital Chita. Her house has no running water – she has to fetch it by bucket from a nearby well.
"I’m a single mother with three children and one is an invalid," she told me. "Life is very hard here and now the collective farm has fallen apart there is almost no work."
Her neighbour, an elderly man in a fur hat, agreed.
"Most people have to work as black market loggers just to survive, to buy bread and feed their families.
"We used to have so much forest round here," he added, throwing his arms wide open. "But now look – there’s almost none left and they only leave the small, skinny trees – the ones we call toothpicks."
Unlicensed logging
The police have just established a new forestry division to conduct spot checks.
But many points in the new Russian Forest Code contradict each other. The lack of clarity leaves room for unlicensed logging on a large scale, with poachers avoiding taxes and pocketing huge sums of money.
But it can be dangerous to speak out against the illegal trade.
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 What’s worse we are destroying our environment. What kind of legacy are we leaving to our grand children? Viktor Ostanin
Russian MP |
One regional MP, Vladimir Baranov, who also ran a wood processing plant, was shot dead on his doorstep in 2005.
Many, including a fellow MP Viktor Ostanin, believe he was the victim of a contract killing organised by powerful business interests in the area who have links with Chinese mafia.
Ostanin, a former intelligence officer, said the best way to fight illegal logging is to create more jobs in wood processing in Russia.
"Sadly we are allowing the Chinese to buy our forest very cheaply, they process it and send furniture and flooring to other countries – that makes no sense."
"What’s worse we are destroying our environment. What kind of legacy are we leaving to our grand children?"
But can Chinese companies be blamed for exploiting weak legislation and corruption on the other side of the border?
"I think initially they all wanted to obey Russian laws," Wen Bo, an environmental campaigner in Beijing, said.
"But if the Russians don’t care about their own forest, if Russian officials encourage them to do business illegally, bribing officials and paying money under the table, they soon learn how to do business in such an environment."