Libmonster ID: UK-1422
Author(s) of the publication: L. V. NOVOSELOVA

L. V. NOVOSELOVA, Doctor of Economics, Institute of the Far East, Russian Academy of Sciences

investment cooperation Keywords:Chinese investment in RussiaRussian investment in China

Russia and China are making considerable efforts to form and develop strategic partnership relations. This primarily applies to economic cooperation, which is an objective long-term basis for any solid and positive international interaction.

China has managed to extract significant benefits from joining the WTO (2001) and, functioning as a kind of" world factory", has significantly strengthened its position in the world market. Currently, consuming 10% of the world's total oil production, China is the second largest energy consumer in the world after the United States. The Chinese economy processes over 35% of the world's steel production, 30% of coal production, 55% of cement production, etc. 1

For its part, having the world's largest mineral resources, Russia has high hopes for the construction of powerful trunk pipelines to transport Russian hydrocarbons to the Chinese oil and gas market. First of all, it is the Eastern Siberia - Pacific Ocean (ESPO) oil pipeline, which started operating at the end of 2010, with a branch line from Skovorodino in Russia to Daqing in China. The total length of the ESPO is 4,700 km, and the design capacity is 80 million tons of oil per year (including 30 million tons of branch oil to China). Gazprom's large-scale and promising project to build gas pipelines from Eastern Siberia and the Russian Far East to China with a total capacity of 68 billion cubic meters should also be mentioned. m3 of gas.

Of course, the implementation of the existing potential in this area will provide the fuel and energy complex of our country with a stable and capacious sales market, and with it-a reliable source of petrodollars, so necessary for the modernization and development of the Russian economy. At the same time, it is also obvious that the infrastructure linking of the Russian fuel and energy complex to the Chinese "world factory" will only consolidate the raw material character of Russian exports, giving a complete look to such a model of economic interaction between Russia and China, where the Russian side is assigned the role of a supplier of raw materials and energy resources, and the Chinese side is a producer of final products with high added value.

At the same time, China is not going to stop there. The current economic development strategy of the People's Republic of China is focused on creating an "innovative-type state" in the period up to 2020, which implies a technological breakthrough into the future, and not just an increase in the level of the existing technological base. Special emphasis is placed on creating our own new high technologies, raising fundamental research in high-tech areas to a higher level, and extensive training of modern high-class scientists and scientific and technical specialists. Solving these problems will allow China to take its rightful place in the system of world economic relations as the largest producer of science-and technology-intensive products.

All this already at the beginning of the XXI century put Russia before an inescapable choice: to remain in its current unpromising position as a supplier of raw materials for the Chinese industrial system, falling further and further away from it along the production technological chain, or to activate the still good positions and achievements in certain areas of fundamental scientific research and modern technologies, to include them in economic dialogue with China and thus try to use the high energy of its development for the diversification and reconstruction of its own economy.

We are talking about using the Russian technological base to boost Russian-Chinese investment cooperation in such modern science-and technology-intensive areas that attract the interest of Chinese partners as aviation and shipbuilding, nuclear power, space technologies, special alloy metallurgy, fiber-optic communications, power engineering, composite materials production, etc. 2

The implementation of such a complex task requires the active use of all forms and tools of bilateral economic exchange and, above all, investment cooperation. It is joint investment projects that link together the intellectual, material, financial and human factors of production that allow partners to maintain mutual interest for a long time, properly secure their property and intellectual property rights, meet the national effective demand at the expense of their own production and, ultimately, ensure the greatest synergistic effect of business interaction.

In this regard, a natural question arises : to what extent is the current level of Russia-China relations?-

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Table

Direct investment of China and Russia in 2003-2011 ($ million)

 

2003

2004

2005

2006

2007

2008

2009

2010

2011

Chinese investment in Russia

151,1

77,3

203,3

452,1

477.6

395,2

348,2

567,7

303

Russian investment in China

 

126,4

82,0

67.2

52,1

60,0

31,8

35,0

31,02*



* Estimate using data from the Ministry of Commerce of the People's Republic of China.

Source: compiled from the Chinese Statistical Yearbooks (Zhongguo Tongji Nianjian), 2006 (Tables 18-16, Tables 18-20); 2008 (Tables 17-20); 2010 (Tables 6-14, Tables 16-19); 2011 (Tables 6-14, tables 6-19).

does Russian investment cooperation meet these objectives?

SCOPE OF INVESTMENT COOPERATION

The table shows official data from the State Statistical Office of the People's Republic of China on bilateral investment flows between Russia and China.

The analysis of statistical data allows us to draw some general conclusions about the scope and nature of investment cooperation between Russia and China.

First of all, the dynamics of investment flows indicate that significant investment cooperation between Russia and China has a very recent history, in fact, starting only in the first decade of the XXI century. In the 1990s, the size of their mutual investments was so small that they did not even fall within the statistical observation zone of the PRC. As for Russian statistics, unfortunately, their data are very selective and fragmented, which makes it impossible to use them as a reliable source for compiling more or less representative dynamic series.

It is obvious that the annual size of investment over the past decade has remained low. And this is despite the impressive scale of the Russian and, even more so, the Chinese economy, as well as the presence of both China and our country of a number of large-scale investment cooperation projects with industrialized countries in such industries as automotive, petrochemical, mechanical engineering, electronic industry, etc. In these circumstances, the dynamics of Russian-Chinese investment remains very unstable, and the conclusion (as well as non-conclusion) of any major transaction can make significant adjustments to it3.

Mutual capital flows account for the lion's share (90% or more). the so-called "other investments", which are commodity and other loans that serve the current trade exchange, bank deposits, etc.The share of direct investments that involve long-term and deep mutual relations of partners, is still extremely small. Such a widespread form of investment in the modern world and very effective from the point of view of developing new markets, such as mergers and acquisitions of assets, is almost never used.

The result of all this is a low level of accumulated mutual investments. According to the Ministry of Commerce of the People's Republic of China, the total volume of Chinese direct investment in Russia increased by 11.57% to $2.921 billion by the beginning of 2012. Overall, investment in Russia accounted for only 1% of China's total accumulated foreign investment. The share of Russia in the total amount of foreign investment attracted by the PRC, according to estimates, was no more than 0.1%. The total volume of Russian direct investment in China reached $817.79 mln.4

AREAS OF INVESTMENT APPLICATION

The main areas of application of Chinese capital in Russia are the development of minerals, energy, development and use of forest resources, light and textile industries, consumer electronics, as well as real estate, with an emphasis on the construction of facilities that contribute to the development of bilateral trade and economic ties.

Thus, the Chinese energy corporation Huadian invests $323 million in the construction of a power plant in Yaroslavl together with the Russian company TGC-2. In 2011, in partnership with the Russian company EuroSibEnergo, China Yangtze Power signed an agreement on the construction of two hydroelectric power stations in Siberia (Nizhne-Angarsk HPP and Trans-Siberian HPP) and one associated gas station (Lenskaya TPP) with a total capacity of about 3 GW, aimed at providing electricity to energy-deficient regions of Russia and China5.

The Chentong Group of Companies, which is part of the State Committee for Control and Management of State Assets under the State Council of the People's Republic of China, has invested $350 million in the Greenwood International Trade Center and Business Park located in the Moscow region. Since 2005, Shanghai United Investment Company has been building a multifunctional residential complex "Baltic Pearl" in St. Petersburg. In the east of the country, in the Trans-Baikal and Khabarovsk Territories, Chinese investors are investing in the construction of wood processing facilities.

As for Russian investments, the main areas of their use in China are the processing of agricultural products and mining.-

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raw materials, production of chemical products and transport equipment, construction and provision of transport services.

A number of large Russian companies are interested in various forms of investment in China. For example, Acron OJSC (Veliky Novgorod) established a subsidiary, Hongzhi-Acron, in Linyi, Shandong Province, producing ammonia, complex mineral fertilizers, methanol, and hydrochloric acid. In the field of wholesale trade in China, the Russian Steel company, established by the Novolipetsk Metallurgical Combine, operates. Rusal Group also has its own plants in China, which has built two cathode plants here, which has reduced the costs of its main production in Russia, providing 85% of the holding's needs for cathode blocks. Kuibyshev-Azot is successfully developing polymer production near Shanghai.

The small number of large Russian investment projects in China hinders the development of Russian financial institutions there. Currently, only VTB has a functioning Chinese branch. In December 2007, this Russian bank opened a branch in Shanghai and by November 2011 had a loan portfolio of $56 million. By the end of 2012, it was planned to increase to $170 million. The bank mainly finances the trading operations of Russian companies, as well as credits the investment activities of their Chinese subsidiaries.

Summing up, it should be noted that today Russia is the only one of the 10 largest trading partners of China that is not among the leading countries that invest in the Chinese economy. On the other hand, the amount of funds invested by China in the Russian economy is also insignificant. Thus, we have to admit that investment cooperation between Russia and China cannot yet have any significant impact on the economic development of Russia and China.

REASONS FOR THE LOW LEVEL OF INVESTMENT COOPERATION

There are a whole range of reasons that explain the current situation in Russian-Chinese investment cooperation in one way or another. First of all, we should note that neither we nor the Chinese are yet among the leading international investors. For a long time, our countries were primarily recipients of foreign investment, competing with each other for large modern projects of international investment cooperation with the participation of industrialized countries. As a result, both Russia and China have a lack of knowledge about the current state of each other's economic potential and economic policies.

According to Chinese experts, after the collapse of the Soviet Union, China's political and business circles have widely expressed the view that our country is not ready to develop effective international cooperation due to the loss of its former economic power, internal stability and influence in the world.6 On the other hand, the Russian business community and government officials still underestimate the economic achievements of modern China. Russians often accuse Chinese partners of violating intellectual property rights and agreements concluded, dumping and protectionism. Hence the lack of mutual trust and interest in developing partnerships at various levels of business interaction.

In the field of practical decision-making, this often leads to the fact that time is simply lost and opportunities for establishing mutually beneficial contacts are missed. Suffice it to say that it was only in November 2006 that the Russian-Chinese intergovernmental Agreement on the Promotion and Mutual Protection of Investment was signed, which is of paramount importance for the development of bilateral investment cooperation. By this time, China had similar agreements with at least 116 countries, and Russia had similar agreements with 57 countries7. This is a kind of evidence of the lack of attention of the parties to each other as a business partner.

The lack of serious interest and shallow ideas about each other sometimes lead to mutual distrust and wariness in business communication, which can not but affect its practical results. Only in recent years, we can cite a number of examples of failed deals in the field of Russian-Chinese investment cooperation. So, the Chinese state oil and Gas Company (CNPC) was not allowed to participate in the auction for the sale of the Russian company Slavneft. Due to the refusal of the Federal Antimonopoly Service, attempts by the Chinese to acquire the Stimul oil production company, which is developing an oil and gas condensate field near Orenburg, ended in failure. This asset was acquired by Gazprom. China National Offshore Oil Corporation (CNOOC) ' s desire to participate in the Yuganskneftegaz auction was thwarted at the earliest stage.8

The Changhong company, one of the largest Chinese manufacturers of household appliances, tried to build a TV factory in the Moscow region. However, there was no available space in the Moscow region, and a similar enterprise was opened by the Chinese in the Czech Republic. The Chinese automobile giant Great Wall, which wanted to open a plant in the special economic zone "Alabuga" (Tatarstan), also failed with its own production. The agreement on working in the industrial assembly mode between the Russian and Chinese parties was not signed, respectively, privileges for importing Great Wall components were not provided, and the project failed.

Similarly, in 2006, after lengthy negotiations, the Russian company Severstal was denied a stake in the Chinese state-owned steel company Tonghua Steel in Jilin Province. In the early 2000s, Gazprom tried to gain a foothold in the Chinese energy sector by joining the consortium for the construction of the trans - Chinese Tarim-Shanghai gas pipeline, but soon withdrew from the project. Gazprom wanted to get a stake in gas distribution networks, but China did not agree to this.

Such failures of large promising projects, of course, have a negative impact on potential investors on both sides.

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In addition to the general reasons mentioned above for the low activity of Russian and Chinese investors, each country has its own specific circumstances that hinder bilateral investment cooperation. If we talk about Russia, then public opinion polls conducted in China indicate that in our country, Chinese citizens are concerned not only and not so much about "bias towards Chinese investors compared to Western ones", but about "corruption, rudeness and low efficiency of officials", "insufficient security", "lack of appropriate preferential treatment". politicians " together with infrastructure underdevelopment and technological backwardness.

Indeed, Russia is still considered a zone of high investment risks. The reasons for this are well known. Among them: pronounced industrial imbalance of the economy; monocultural, in fact, nature of exports; high level of tax burden on business; lack of a developed banking system focused on supporting the real sector of the economy; narrow and one-sided development of the national stock market; incompleteness and internal inconsistency of legislation, including in the field of property rights; high bureaucratization economy; widespread corruption, weak law enforcement system (including courts), etc. But these are the most important components of the national investment climate.

The situation is complicated by Russia's cumbersome and inefficient bureaucratic system for approving international investment cooperation projects, obtaining work permits, registering property rights, etc. A typical example is the approval of the Khor Pulp and Paper Mill project , the largest Russian-Chinese investment cooperation project in the Khabarovsk Territory, which involves attracting Chinese capital of $250 million. Various approvals in federal and regional structures took two and a half years! This is despite the fact that so far Russia exports almost exclusively roundwood to China, while China itself, and many other countries, including the United States, Canada, etc., have long banned the export of roundwood as economically unprofitable and inexpedient.9

Similarly, after purchasing the license for the development of the Berezovsky iron ore deposit (Zabaikalsky Krai), Chinese investors were unable to obtain the conclusion of the state environmental assessment for more than two years, despite the impressive costs incurred (about 1 billion rubles). As a result, while initially (May 2005) the construction of a mining and processing plant with a capacity of at least 5 million tons of ore per year was supposed to be completed in 2010, in practice by this time construction work had not yet begun, and the timing of their completion, according to the People's Daily, was "unknown" 10.

Speaking at the Russia 2012 Investment Forum in February 2012, Vladimir Putin noted that Russia ranks only 120th in the world investment climate rating. Our country, therefore, faces the urgent task of repeatedly improving the business environment in almost all areas.

Of course, Russia attracts China with its natural resources. However, our country is not a monopolist in any of the types of minerals of interest to the PRC. As soon as Kazakhstan opened its oil-producing sector, for example, Chinese investors literally rushed there. From year to year, China's investments in the extractive industries of Australia, Africa, etc. are increasing.

CHINA'S INVESTMENT ATTRACTIVENESS

Consistently pursuing a policy of openness to the outside world, China has for many years (since the late 1970s) been the leader in attracting foreign investment among developing and emerging markets. Over the past 30 years, as a result of purposeful and painstaking work, China has created a comprehensive regulatory framework for investment and entrepreneurial activities of foreign capital investors. China's accession to the WTO has made the Chinese economy even more open and attractive for international business. As a result, the vast majority of the world's largest companies have long had their business in China, and many of them have opened their regional headquarters here. All this indicates that China has a favorable investment climate, which applies equally to any interested companies, including Russian ones.

At the same time, the period of orientation of the PRC to attract the maximum amount of investment from abroad by providing foreign investors with various benefits and preferences is now, in fact, over. The focus is no longer on the volume, but on the quality indicators of foreign investment. Priority is given to companies that can transfer advanced technologies and management experience to China. The industry focus of foreign entrepreneurship is shifting from labor-intensive and energy-intensive manufacturing industries with a high level of environmental pollution to modern, technologically intensive, energy-saving and environmentally friendly types of production (electronics, biotechnologies, telecommunications, pharmaceuticals, etc.), as well as the service sector.

It is for such foreign companies that preferential operating conditions are still maintained in the PRC. It is unlikely, however, that all this can be attributed to the main exporters of Russian entrepreneurial capital represented by the leading oil and metallurgical companies of Russia, because the structure of foreign expansion of Russian capital practically repeats the sectoral structure of the domestic economy.11 Thus, the most favorable period for the Russian business community to enter the Chinese market has unfortunately been missed. From now on, Russian companies in China face very tough competition not only from foreign entrepreneurs who have long been established and adapted here, but also from Chinese enterprises that have gained experience.

Meanwhile, with the internationalization of the Chinese economy, the business environment here is increasingly guided by international standards. In particular, the cost of labor in China is constantly increasing. In major cities

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it is already comparable to wages in the Russian industry, especially if we take into account the unavoidable costs of pension and medical insurance, payments to the housing fund, additional compensation for employees in case of industrial injuries, diseases, training, etc.

The cost of electricity, water and gas supply is also commensurate with the level of Russian tariffs. At the same time, in China, it is widespread to set limits on the consumption of electricity, water, natural gas, coal, etc., if they are exceeded, the price per unit of consumption increases. Under these conditions, "survival" in the competitive Chinese market requires a very high level of corporate management and profitability of production. All this determines the limited interest of private Russian investors in the Chinese market.

RUSSIAN INITIATIVES

In an effort not to remain aloof from major international investment flows, Russia has taken practical steps over the past decade to revive investment cooperation with China. In 2004, an intergovernmental Russian-Chinese Permanent Working Group on Investment was established to select pilot investment projects that require coordinated state support. Since then, regular Russian-Chinese investment forums have been held under the auspices of the Ministry of Economic Development of the Russian Federation and the State Committee for Reform and Development of the People's Republic of China (SCDRC) with the participation of major companies of the two countries, allowing the parties not only to identify their priorities in bilateral investment cooperation, but also to take practical steps towards their implementation.

In 2004 - 2009, five bilateral investment forums were held, during which agreements of intent for cooperation were signed in relation to 37 pilot projects totaling $4.5 billion. At the same time, 35 projects are located in Russia. Thus, Chinese companies, especially state-owned ones, show significantly greater activity and interest in investment cooperation than their Russian partners. Accordingly, the industry orientation of promising projects of Russian-Chinese investment cooperation, focused in such areas as mining, timber harvesting and processing, construction of real estate, development of farmland and processing of agricultural products, reflects mainly the needs of the Chinese side.

Russian interests are much less visible. At the same time, despite all the efforts of the state authorities of Russia and China, business still behaves rather passively, as evidenced, in particular, by the slow implementation of agreed projects. By the beginning of 2010, investments of $820 million, or less than 20% of the planned investment funds, had been expended for their implementation.12

At the same time, holding bilateral investment forums has improved mutual understanding between partners, allowing Russia and China to find approaches to cooperation in oil production. In June 2005, in St. Petersburg, the Russian state Oil Company Rosneft and the Chinese State Petrochemical Corporation Sinopec signed a memorandum of cooperation in the implementation of projects in Russia and abroad.13 Soon, this allowed Sinopec Corporation, having created together with Rosneft the operating company Benin Holdings, to get a 25.1% stake in the development of the Veninsky block at the Sakhalin-3 field (oil reserves - about 170 million tons, gas reserves-258 billion m3). In 2006, in cooperation with Rosneft, Sinopec acquired the assets of one of its main subsidiaries, JSC Udmurt-Neft, from the Russian-British TNK - BP Holding, forming a joint venture to manage it. The transaction was financed by the Bank of China 14. At the same time (October 2006), Rosneft and the Chinese company were engaged in prospecting and mining in Eastern Siberia.CNPC established the joint venture Vostok Energy LLC, 51% of the authorized capital of which is owned by Rosneft, and 49% by CNPC.

In 2009, a plan of Russian-Chinese investment cooperation was signed at the intergovernmental level, which set out its main goals, principles and priority areas (sectoral and regional). The plan provides for a number of specific measures designed to increase the level of bilateral business cooperation. Among them - the creation of special centers for mutual assistance to investors for the purpose of information and expert support of investment projects from both the Russian and Chinese sides; the creation of joint technical and innovation zones for Russian and Chinese enterprises; the creation of an effective insurance system for export-import operations and mutual investments; mutual recognition of banks and bank guarantees, the development of interbank relations, etc.

In September 2009, Russian President Dmitry Medvedev and Chinese President Hu Jintao signed the "Program of Cooperation between the regions of the Far East and Eastern Siberia of Russia and the Northeast of China for 2009-2018". The Program aims to achieve coordination of efforts to implement regional development strategies of Russia and China, the main aspects of which are reflected in the Chinese "The Program's implementation should expand the openness of the two countries, bring bilateral cooperation to a new level, and give an additional impetus to the development of business cooperation throughout Northeast Asia. The Program is coordinated by the Russian Ministry of Regional Development and the State Committee for Development and Reform of the People's Republic of China.

The main aspect of the Program is the implementation of key investment projects of regional cooperation. The appendix to the Program initially covers 205 such projects in the eastern regions of Russia and the Northeastern provinces of China, including 94 in Russia and 111 in China.

At the same time, soon after the Program was signed, it became clear that the list of key Russian projects needed to be clarified due to both insufficient elaboration of a number of projects and inconsistency with the regional development strategy.

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development, focused on the rapid growth of production of products with high added value, the formation of a diversified technologically and commercially efficient export supply system. As a result, already in 2010, the number of facilities located in the Russian territory of resource-producing industries and the construction materials industry was reduced. Currently, the Russian part of the list of key regional cooperation projects has been reduced to 57 investment projects.

Despite significant adjustments, most production projects in Russia still relate to the development of mineral resources, wood processing, light and food industries, and the construction materials industry. These are mainly capital-intensive projects focused on attracting significant amounts of investment. At the same time, the products of most of the Russian part of the list do not have a high added value.

The largest number of projects in Eastern Russia is concentrated in the timber processing industry. This includes the construction of timber processing plants in the Trans-Baikal, Khabarovsk and Primorsky Territories, in the Irkutsk, Amur, Sakhalin and Magadan regions, as well as in the Jewish Autonomous Region (JAO), etc.

The largest mineral resource deposits in Russia include: the already mentioned Berezovskoye and Noyon-Tologoyskoye, Bugdainskoye (Zabaikalsky Krai) and Savinskoye (Irkutsk Region), the construction of the Far Eastern Mining and Metallurgical Combine based on the Kimkano-Sutarsky iron ore deposit in the EAO, as well as projects for the development of coal deposits. The implementation of individual projects involves the construction of processing and processing plants.

Unlike the Russian list, the projects proposed by the Chinese side are mainly represented by objects of high-tech industries - chemical industry, metallurgy, mechanical engineering, as well as manufacturing industries related to the development of China's innovation sector. Production of organic chemicals will be concentrated at enterprises in the provinces of Heilongjiang and Jilin. The raw materials for them will be imported crude oil, natural gas, coal and wood. Enterprises of inorganic chemistry (production of polycrystalline silicon) will be concentrated in the provinces of Liaoning and Heilongjiang. The largest number of ferrous and non-ferrous metallurgy facilities is planned to be created in the Inner Mongolia Autonomous Region.

Most of the Chinese projects involve deep processing of raw materials, the source of which is considered, first of all, the regions of the Russian Far East and Eastern Siberia. In this regard, the parties are interested in developing the transport and logistics infrastructure of the border areas, modernizing existing border crossings and building new ones.

INDUSTRY AND TECHNOLOGY ASYMMETRY OF COOPERATION

Thus, the list of key investment projects itself shows that the majority of potential raw materials production is concentrated in Russia, while the majority of processing and high - tech industries are located in China. Admittedly, this "industry-specific and technological asymmetry" of the Program, noted by many of its critics, reflects the actual situation. The north-east of China is indeed ahead of the Russian border region in terms of development, where high-tech production facilities are being rapidly introduced, the processing industry is developing, and real conditions for introducing innovations have been created.

However, as the analysis shows, the Program does not contain specific mechanisms and deadlines for the implementation of the projects listed in it. Rather, it is simply a package of investment proposals from regional authorities - both Russian and Chinese. However, the conditions and prospects for implementing Russian and Chinese projects are very different.

Thus, the list of Chinese projects is an integral part of the" Plan for the Revival of areas of the Northeast of China", which has been implemented since 2006 and has the status of a priority state program in the PRC.

In 2006-2010. Fixed asset investment in the three provinces of Northeast China grew at an average annual rate of 25% in 2010. they totaled $473 billion. Their share in the national volume increased from 9.7% to 11% 15.

In contrast, only a few Russian key projects of the Cooperation Program are included in the Federal Target Program "Far East and Transbaikalia" (FTP) or in other target programs. At the same time, the situation with the implementation of the Federal Target Program leaves much to be desired. In 2006-2010, the annual federal budget allocations for the implementation of the Federal Target Program decreased by 14.6% - from 95.1 to 81.3 billion rubles.

In the budgets for 2011-2013, allocations for the implementation of the Federal Target Program (excluding funding for preparations for the APEC Summit 2012) were reduced by 147 billion rubles, or 62% relative to passport assignments, and amounted to only 90 billion rubles. Taking into account the additional diversion of Federal Target Program funds by the Russian government for the implementation of investment projects that go beyond its scope, the reduction in federal budget allocations for the implementation of Federal Target Program activities in 2011-2013 amounted to 80%. At the same time, funding for road construction projects was reduced 7.5 times - from 112 to 15 billion rubles. rubles!16

But it has long been known (including from the same Chinese experience) that in order to attract and effectively use foreign capital, it is necessary to spend significant own funds, often several times higher than the investments attracted from abroad. It is difficult to expect a massive influx of foreign investors to undeveloped and unsecured territories.

In addition, it is necessary to clarify the basic conditions for attracting foreign investment to the Russian Far East, including a clear definition of the owner and target investor in specific cooperation projects. So far, the situation here is far from ideal. In particular, the Chinese side is often invited to invest in properties that already have a private owner.

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There is also no clear distinction between a Chinese investor and any other foreign investor. Some regions (for example, the Chukotka Autonomous Okrug) did not submit a list of priority projects aimed exclusively at potential investors from China to the Russian Ministry of Regional Development. Moreover, the Republic of Korea is attracting investment in a number of projects that were originally included in the Program of Russian-Chinese cooperation (for example, in the Khalaktyrskoye field in Kamchatka).

Not surprisingly, not a single Chinese investor invested in the Program's key projects during 2010. According to Vladimir Ishaev, the Presidential Plenipotentiary Representative in the Far Eastern Federal District, only 16 projects on the Russian list are currently available for design estimates, 12 of which have entered the implementation stage. Design and estimate documentation for another 12 projects is in the process of being developed, and design work has not yet begun on 29 planned key objects of Russian-Chinese cooperation (over 50% of the Russian list).

It should be noted that all the projects launched in Russia are related to the development and use of the resource base of the Far Eastern regions of the country. Among them: the development of the Berezovsky iron ore deposit and the Noyon-Tologoyskoye polymetallic ore deposit (Zabaikalsky Krai), the creation of timber industry complexes in Chun, Taishet and Ust-Kut (Irkutsk Region), the development of the Kimkano-Sutarsky iron ore deposit (EAO), etc. The implementation of other projects involving the production of products with a high degree of added value, it never started.

The lack of effectiveness of the implementation of the Russian-Chinese Cooperation Program is a source of concern for both countries. During various bilateral meetings and contact forums in 2010 - 2011, the need to create effective economic and financial mechanisms for implementing the Program was repeatedly discussed. One of the latest and most promising initiatives in this area is the proposal of the Chinese side presented at the VII Baikal Economic Forum (September 2011) to create a joint investment fund for the development of cooperation between the Russian regions of the Far East and Eastern Siberia and the North-East of the PRC.

As a first step in this direction, we can consider the establishment in December 2011. A Russian-Chinese investment fund with a target capital of $4 billion. The founders of the investment fund are the Russian Direct Investment Fund and the Chinese Investment Corporation, which operate with state funds, and have pledged to contribute $1 billion to its capital over the next 5-7 years. Another $2 billion is expected to be raised from other leading Chinese investors. At the same time, the Russian-Chinese investment fund plans to invest most of its capital (70%) on the territory of Russia and, above all, in the regions of Eastern Siberia and the Far East. Among the priorities of its activities are mainly projects that are not related to resource sectors: infrastructure and transport, the agro-industrial complex, and the manufacturing industry. Part of the funds will be invested in securities of Russian companies planned for privatization.

The first transaction of the Russian-Chinese investment fund worth about $200 million was carried out during the Week of the APEC-2012 summit. The investment funds are allocated to RFP Group, which is one of the largest timber processing enterprises in Russia. Currently, the company provides about 10% of all Russian exports to China and about 15% to Japan. Investments are aimed at improving the level and quality of product processing 17.

* * *

In general, despite the existing both objective and subjective problems and difficulties, there is a gradual awareness of the importance and prospects of investment cooperation between Russia and China, an irreversible impulse of mutual attraction of Russian and Chinese business partners is being formed, and thus a trend of their stable and long-term interaction is being outlined.


1 BP Global Energy Report: the most interesting trends - http://www.elitetrader.ru/index.php?newsid=125243; http://www.china-voyage.com/2010/09/odna-iz-seryoznejshix-problem-knr-deficit-res ursov

2 Guoji maoi, 2003, N 2.

3 When evaluating official statistics, it should be borne in mind that a significant part of the capital exported from both Russia and China is sent to offshore financial centers in Europe, Asia, Latin America, Oceania (Cyprus, Luxembourg, British Virgin Islands, Cayman Islands, Samoa, Bermuda).For Russia, this figure is more than 30% of annual capital exports, for China-about 25%, and with Hong Kong-even 75%. In order to use the privileges granted to foreign investors, 25-30% of these funds in the form of so-called return investments are re-entered into the economy of the donor country. The remainder is distributed to the final recipient countries in different regions of the world. It cannot be ruled out that a certain part of these funds should be included in mutual investments of Russia and China, but the methodology for quantifying the flow of capital through offshore companies has not yet been developed.

4 http://www.parldv.ru, 20.01.2012.

5 Xinhua News Agency. 29.06.2011. 6 Guoji maoyi...

7 http://english.peopledaily.com.cn/200312/17

8 Newsweek, 21.03.2006.

9 Rossiyskaya Gazeta-Dalny Vostok, 31.01.2006.

10 People's Daily, 13.10.2010.

Kheifets B. A. 11 Foreign business expansion and national interests of Russia. Scientific report.

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14 www.smoney.ru/article/shtml72007/03/12

15 Zhongguo tongji nianjian 2006. Beijing, 2006. Tables 6-3; Zhong-guo tongji nianjian 2007. Beijing, 2007. Tables 6-3; Zhongguo tongji nianjian 2011. Beijing, 2011. Table 5-3.

16 Parliamentary Newspaper-Far East, 2011...

17 http://rus.apec2012.ru/news/20120907/462937826.html


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