Chinese Investors Look to Develop Russia’s Tourism Sector
May 24 – Dalian Wanda Group and China Oceanwide Holdings are considering investing in the tourism and infrastructural development of Russia’s Krasnodar region, Dagestan republic, city of Sochi, and Siberian Lake Baikal, but no agreements have been signed.
“We have made initial agreements with local authorities from these towns, so we have made the first step toward investment,” vice president of China Oceanwide Holding Group Tszysin Tsi told reporters after Chinese investors received a guided tour of the Russian regions.
“The Russian market has more than prospects and possibilities for development… It’s still empty, and now is a good time to enter,” said Bo Khe, vice president at the Dalian Wanda Group.
The size of the first projects undertaken by the Chinese companies could be about US$600 million, said Ivan Vvedensky, chairman of the tourism agency World without Borders. The potential total investment under discussion is between US$2 billion and US$3 billion.
Vvedensky added that the interest from the Chinese was “a very important signal.” But all sides stressed that nothing has been signed and the negotiations were still in an early phase.
There were 840,000 Chinese visitors to Russia last year, said Yevgeny Pisarevsky, deputy head of the Russian Federal Tourism Agency — making the Chinese the second-most-numerous tourists after the Germans. At current growth rates, they are likely to soon occupy first place.
Representatives of the Chinese companies said they were well aware of the problems associated with Russia’s investment climate, having heard lots of “rumors” about the issue. They stressed their decision that investing would be a methodical process.
Meanwhile, Chinese investors were confused by “bureaucratic and not punctual” Russian officials.
“None of the officials we visited were punctual, and they only showed up when we have chatted with their subordinates for about half an hour. And most of them would excuse themselves before the meetings ended and instructed their subordinates to carry on the conversation,” Chairman of Dalian Wanda Group Wang Jianlin wrote in his blog on the company’s web site www.group.wanda.cn.
He also stressed that he concurred with Lu Zhiqiang, CEO of China Oceanwide, to take advantage of the trip and achieve something there, “but the Russian officials’ bureaucratic style prevented us from making up our mind.”
However, a trip to the Lake Baikal encouraged Chinese investors to consider investment in the Russian tourism sector.
“Perhaps Wanda’s first investment in Russia would be Lake Baikal resort,” Lu Zhiqiang says in his blog.