FDI & Foreign Trade

Russia Attracting Interest from Singaporean Investors

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CDE Op-Ed Commentary

russia-singaporeAs sanctions on Russia continue, many Asian countries are now finding this an opportune time to establish closer trade and investment links with Russia.

It makes sense: 70 percent of Russian territory is physically in Asia, and the country has a reasonably sized middle class consumer base. Europeans have stopped selling to them and the Rouble is extremely competitive right now, having lost 50 percent of its value in the past two years – Russia is capable of offering more bang for the Asian buck.

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Foreign Investors Hope Russian Market to Move from Recovery to Growth

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By Marina Romanova

foreign-investors-1936Foreign investment inflow in Russian stock in 2016 showed first positive annual result since 2012 and has exceeded US$727 million, according to the Citibank, which based its calculation on the Emerging Portfolio Fund Research (EPFR) data. In 2012 foreign investors injected US$410 million in Russian assets. The last year results are also a record high since 2010, when foreign investments were amounted to US$3.3 billion.

Russian stocks were up 16 percent since November, 8th, 2016 based on the performance of the RSX Van Eck Vectors Russia ETF (U.S. first exchange-traded fund focused on Russia), while the other emerging markets are down 6 percent collectively, as measured by the iShares MSCI Emerging Markets ETF EEM.

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Russia-China Cooperation: Too Well-Matched Not to Integrate

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By Marina Romanova

russia-china-cooperation-too-well-matchedOn the cusp of 2017, Sino-Russian political relations are still ahead of two nations’trade and economic cooperation.

Russia’s worsened relationship with the west after the annexation of Crimea has further pushed Russia’s leadership into China’s arms.In 2014, European Union-Russian trade stood at US$377 billion, making the bloc Moscow’s most important economic relationship. That fell to US$235 billion last year.

After Western sanctions were imposed in 2014, Moscow and Beijing had declared that they would increase their bilateral trade to US$100 billion during 2016 and to US$200 billion by 2020.

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Russia and India to Boost Economic Cooperation and Trade

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By Marina Romanova

prime-minister-narendra-modi-and-russian-president-vladimir-putinIn a way to re-establish “the special and privileged nature’ of their strategic partnership, Russia and India have set the goal of boosting bilateral trade to US$30 billion and mutual investment to US$15 billion by 2025.

However, Russian-Indian trade cooperation leaves much to be desired. For Russia, India is in 19th place in terms of turnover, according to 2014 data, while for India – Russia is in 34th place only. In 2015, this turnover was further reduced by another 18 percent which is, as Russian president Vladimir Putin phrases it, “largely associated with volatility on the global markets and in exchange rates”.

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Russia and Vietnam Aim to get US$10 Bln in Bilateral Trade by 2020

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By Marina Romanova

russia-and-vietnam-aimIn May 2015, after six years and eight rounds of negotiations, Vietnam signed a free trade agreement (FTA) with Russia-led Eurasian Union (EU). Although, it took another 17 months for the deal to finally come into force in October 2016, Vietnam became the first and only country so far to establish a free trade zone with EU, comprise of Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia.
Many observers believe FTA with Vietnam was possible due to special historical ties between two states.

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Severstal to Export Chinese Steel to EU to Avoid the Utmost Anti-dumping Tariffs

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By Marina Romanova

severstal-to-export-chinese1Russian steelmaker found the way to lower the effect of severe anti-dumping duties levied by the EU on Russian steel in August 2016. According to Vadim Larin, chief executive of Severstal, Russia’s fourth-largest steelmaker, the firm is exporting Chinese cold rolled steel to the European Union instead of Russian one, because EU anti-dumping duties on the Chinese product are much lower.

The levies against Russia range from 18.7 percent to 36.1 percent and those against China range from 19.7 percent to 22.1 percent, depending on the company. Among Russian exporters, Novolipetsk Steel is subject to the maximum rate of 36.1 percent, Severstal faces a 34 percent levy and Magnitogorsk Iron & Steel Works has an 18.7 percent duty. Among Chinese exporters, Shougang group faces a 22.1 percent rate, while Angang Steel is subject to a 19.7 percent duty.

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China Propose to Set Free Trade Zone between Shanghai Cooperation Organization Members

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By Marina Romanova

china-proposeChina proposed to establish a free trade area between members of the China and Russia-led Shanghai Cooperation Organization (SCO). According to Qian Keming, PRC cabinet vice minister of commerce, a free trade area would facilitate regional economic cooperation and would enhance trade and economic cooperation between SCO members.
He also called for the establishment of an SCO development bank, which would provide funding for regional projects together with other multilateral funds and development banks, to be expedited.

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Eurasian Transport Hub for the Silk Road Economic Belt to be Built in Outskirts of Moscow

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By Marina Romanova

vagon_03Russia and Kazakhstan plan to build a 400,000 TEU international logistic center ‘Central Dry Port’ in Moscow suburbs, Russian daily Kommersant reports. Russian firm Coalco Development and KTZExpress, subsidiary of Kazakhstan’s Railways, signed an agreement on this project on October 5th.

The construction site of the logistics hub handling containers passing along the “New Silk Road” (China – Kazakhstan – Europe) and Trans-Siberian corridor will be situated in Domodedovo district of Moscow region on a 60 hectare plot of land at Russian M-4 “Don” highway. Container and transport terminals, warehouses of low-temperature and dry containers are planned to be built there.

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WTO to issue first-ever Trade Policy Review of Russia

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By Marina Romanova

full-1465370789151128gng-1465382476WTO to question import substitution

Last week World Trade Organization held two days long discussion on its first Trade Policy Review of the Russian Federation since Moscow joined WTO in August 2012 as its 156th member.

The Review took place at a time when Russia faced a challenging economic environment: fall in oil prices, the sanctions imposed on Russia by some countries, and the counter measures taken by the Russian Federation were among the main reasons for the contraction in the economy, WTO’s Chairperson Concluding Remarks reads.

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Alrosa to Double Diamond Sale to Asia in 2018

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By Marina Romanova

CrV6ASvUIAAIIH5A day ahead of the Second Eurasian Economic Forum, Russian PJSC Alrosa, the world’s largest producer of rough diamonds, has open its Eurasian Diamond Centre in Far Eastern port-city of Vladivostok. According to the miner press release, the company wants to boost gem sales to Asia-Pacific nations, including China, India, Japan, and Singapore; and improve cooperation with companies in the region.

The new trading platform will provide an infrastructure cluster to unite diamond industry companies and cater to export-import operations. The Centre will also be in charge for the search of “potential new partners and investors to set up manufacturing facilities for industrial grade diamonds and production of diamond cutting industry equipment.”

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