Caixin
Nov 17, 2012 03:46 PM

CDB Pursuing Increased Investment in Russia

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 Russian president Until visited Beijing in June


(Beijing) – The China Development Bank (CDB) is interested in a wide range of investment opportunities in Russia, a former bank official says.

Lie Kegu, former deputy governor of CDB and a senior consultant at China's largest policy bank, said the bank had interest in opportunities in Russia's infrastructure, electricity, and oil and gas, especially in Siberia.

The CDB, which has a representative office in Moscow, has outstanding loans totaling US$ 30 billion in Russia, Lie said.

The small number of Chinese investments in Siberia, despite its proximity to China, was due to a lack of information, Serge Belyakov, Russia's deputy minister for economic development, said at the Caixin Summit on November 16.

"Now, most foreign investors in that area are from the West," he said

Russia and China announced plans this year to expand bilateral trade from US$ 83.5 billion in 2011 to US$ 100 billion by 2015 and US$200 billion by 2020. Meanwhile, total bilateral direct investments were less than US$ 400 million in 2011.

China Investment Corp., the country's main sovereign wealth fund, and the Russian Direct Investment Fund signed an agreement this year to invest in a Sino-Russian investment fund worth US$ 2 billion.

Chinese investors tend to know little about Russia, said Wang Zilong, managing director of the Investment Banking Department at China International Capital Co.

Wang listed several things Chinese investors were most confused about, such as Russian owners' preference to sell an entire project instead of inviting partners; changes to investment policy; and the number of Chinese workers and technicians they can bring into the country.

Wang suggested Russia consider setting up a special economic zone, following the Chinese experience, where transparency was high and protection of foreign investors was more comprehensive.

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