Chinese enterprises are stepping up investment in Russia where the market potential is huge and the investment environment has improved in recent years, experts have said.
"As Russia's key economic areas are moving to the eastern region, we will strengthen economic and trade cooperation with China. The two countries are complementary in terms of economic development," said Ivan Grachyov, chairman of Russia's State Duma Committee for Energy, during the first forum on the economic situation of BRICS countries.
Grachyov said the Chinese economy is likely to maintain sustainable growth in the long term, and China and Russia have cooperated in investments in areas such as energy, forestry, agriculture and shoe-making.
China and Russia's sovereign wealth funds are making their first joint investment in Russia to acquire the second-largest timber company in the country. The investment of around $200 million will buy a minority stake of Russia Forest Products Group, which has plants in Siberia, the Financial Times reported.
In June, China Investment Corp and the Russian Direct Investment Fund set up a joint private-equity fund, in a move to strengthen bilateral investment in areas including engineering, agriculture, forestry, transportation new energy, oil and natural gas.
China Oceanwide Holdings Group, one of China's biggest private-owned infrastructure manufacturers, said there is big investment potential in Russia's cultural infrastructure and real estate industries.
Talking about the bilateral investment prospects between China and Russia, Huo Jianguo, president of the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, said Russia has advanced high-end mechanical equipment and China's innovation capability is less developed. The two countries should strengthen trade and investment cooperation to overcome the challenges.
Data from the Russian Federal State Statistics Service shows that most Chinese investment in Russia is in the processing, transportation and communication industries.
China's consumer electronic giant, Lenovo Group, started to sell smart phones in Russia in November. As China's second-largest vendor of the devices, the company wants to further expand into the personal computer and mobile phone market.
By the end of 2011, China's accumulated investment in Russia reached $27.6 billion, an annual increase of 63 percent, of which direct investment was nearly $3.8 billion. Russia is China's ninth-largest investment destination.
China has been Russia's largest trading partner, accounting for 10.2 percent of Russia's total trade last year. In 2011, bilateral trade between China and Russia reached $80 billion, an increase of 42.7 percent annually.
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