FDI & Foreign Trade

Russia, China, Announce USD13 Billion Wide Body Passenger Jet JV

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comacRussia and China have announced the signing of a USD13 billion Joint Venture company, the China-Russia Commercial Aircraft International Corporation (CRAIC), set up to compete with Boeing and Airbus. The license to operate in China was granted in Shanghai on Monday. The JV is between the Commercial Aircraft Corporation of China (COMAC) and Russia’s United Aircraft Corporation (UAC), with COMAC chairman Jin Zhuanglong saying the joint venture will develop wide-body aircraft and aims to produce “competitive” long-haul planes for the world’s aviation market.

CRAIC will be responsible for research, manufacturing, marketing, sales and services of its aircraft. According to an agreement by COMAC and its Russian partner United Aircraft Corp (UAC), 280-seat jets with a range of 12,000 kilometers will be prioritized.

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Russia Looks to Link EAEU with OBOR

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Russian Prime Minister Dmitry Medvedev has stated in an interview on Chinese State TV that both the Chinese and Russian governments are looking at ways to link the Eurasian Economic Union (EAEU) with China’s One Belt, One Road (OBOR) initiative. 

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Russia Considering Manufacturing Industry Investment Tax Incentives

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The Russian Finance Minister Anton Siluanov has confirmed that the government is preparing tax incentives aimed at improving labor productivity, during comments at the Russian Council for Strategic Development and Priority Projects. “These proposals will include measures aimed at increasing labor productivity on enterprises,” he said.

The remarks come following criticism from President Vladimir Putin concerning the overall performance of labor in Russia, who stated, “in general, in terms of indicators in this area (labor productivity), Russia is more than twice inferior to efficient economies, and thanks to the powerful technological progress that is currently developing in the world, this gap may seriously increase if we do not respond to it in time”. Continue reading…

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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