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Chinese Direct Investment in Russia $700 Million
Chinese direct investment in Russia is worth $700 million, Andrey Kondakov, director of the Russian Foreign Ministry's Department of Economic Cooperation, announced at the 14th RBC international business conference in Shanghai. According to Kondakov, Russia receives 5 percent of all Chinese direct investment but Russia accounts for no more than 2 percent of Chinese domestic trade.
Furthermore, the positive trade balance between Russia and China has been decreasing recently as China concentrates more on exports. The balance is now $2 billion in Russia's favor, while it had been $5 billion in recent years, Kondakov told the conference. Thirty-five percent of Russian exports to China are raw materials – fuel, lumber, chemicals and fertilizer. Products of heavy industry accounted for 20 percent of Russian exports to China several years go, but now make up only 2-3 percent. But those products have increased in Russian imports from China and now make up 20 percent of it, with further growth expected.
Kondakov said that Russia wants to increase its trade turnover with China to $60 billion, from this year's expected $35 billion. That will be possible by increasing hi-tech exports from Russia and by legalizing informal trade between the two countries. Kondakov estimated that individual, unofficial traders do $5-10 billion in business per year. Deputy speaker of the Russian State Duma Sergey Baburin noted that the customs data of the two countries differ greatly and that many of today's “suitcase traders” are actually large businesses. Both Kondakov and Baburin stressed the need for better customs control between Russia and China.
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