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China slowly plunges a knife into the lungs Russia

China slowly plunges a knife into the lungs Russia

China invests billions of dollars annually in the Russian economy, but is it so beneficial to Russia itself, except for a handful of mixed officials?

Most Chinese investment in the Russian economy is through intergovernmental cooperation, dominated by the energy sector and large infrastructure projects.

We're not talking about portfolio investment, when one or another company "wedged" into the project, to make money off of it. We'll talk about direct investment, which involve the purchase of such a share in the enterprise, which entitles the investor to participate in the management of the firm (in Russia, this share most often corresponds to the threshold in 10% share capital).

Russia as a global share

Over the past three years, the volume of investment from China to Russia has not exceeded 2,8 billion. At the same time, the sum of all Chinese direct investments abroad in 2017 year was 120 billion. I.e, according to official statistics, China has invested less in Russia 2% all their foreign investments.

true, at the end 2018 years, this figure has risen to 6%, however, Russia's niche is obvious.

First Secretary of the Chinese Embassy in Russia Li Chaohui at the conference, dedicated to the development of Russian-Chinese trade and economic relations, said, that the growth of trade between the two countries in 2018 grew by 25,7% to 65,7 billion, and by the end of the year it will exceed 100 billion.

experts note, that there is a problem with identifying the exact figures of Chinese investment in Russia - a lot of financial flows go through offshore (Cayman, Netherlands and others), which greatly complicates the real assessment. Also, the Chinese are by nature cunning and thoughtful - stepping on the same rake twice is unacceptable for them, especially when it comes to big investments.

And they always act carefully and carefully., being able to fool your colleague exactly what in the long run, promising profit in the nearest time period.

It is here that Russian officials become a godsend for a spy from China. Sorvav bird, officials get quick profits, and China gets a potential market entry with multiple benefits, which already for Russia itself bear continuous losses.

note, that Chinese investments go to Russia, following one of two paths. Or when a Chinese investor finds an attractive project in Russia, or when the governments of the two countries agree on them. There is clearly a huge imbalance in favor of the second path..

What interests China in Russia

Real estate, industry, electronic commerce, transport.

Here are four rails, on which the interest of the Asian dragon in Russia is based.

The most demanded industries for companies with Chinese roots are mining, petrochemical and woodworking industry and mechanical engineering.

Development of Russia. Dragon's mouth

Let's name the largest domestic industrial facilities, in which China has invested large sums of money.

— Russian project to liquefy gas in the Arctic at 20% owned by the largest Chinese oil and gas company CNPC, purchased from Novatek back in 2016 year by the China Silk Road Foundation for 1,089 billion. The total investment in the project will be about 23,4 billion dollars or order 1,5 trillion rubles.

— Acquisition of Uralkali shares by the Chinese Investment Corporation. Was bought 12,5% shares in the amount of 2 billion. This made it possible for Chinese businessmen to ensure uninterrupted deliveries of potash fertilizers to their own farmers..

— Direct investments in Eastern Siberia Metals. Group value 750 millions of dollars. Engaged in the search and extraction of non-ferrous metals in the territory of Buryatia.

— Purchase of VTB shares by China Construction Bank. Till 2%, what is 100 million dollars. This is only the primary investment cooperation between Russia and China in the financial sector during a period of severe external economic restrictions..

— China State Grid Corporation poured 1,1 billion dollars to the Sintez group of companies, which is engaged in the transportation and redistribution of energy between power grid facilities of the lowest rank.

— Purchase of shares of the Moscow Exchange by the Chinese Investment Corporation. Was bought 5,4 % shares, for which the citizens of the People's Republic of China paid in total 100 million dollars.

— Created with the participation of the Russian-Chinese Investment Fund, the group of companies Russia Forest Products (RFP) at 2017 launched the production of dry lumber from spruce and fir in the city of Amursk, Khabarovsk Territory. Investments in the project amounted to 12 billion rubles. RFP also announced the construction of several more plants in Primorye and Yakutia.

— Machine-tool plant in the Leninsky district of the Moscow region. Investments in the Russian-Chinese production of DMTG RUS amounted to about 1,2 billion rubles, and total investment in production up to 2020 year reached 8 billion rubles.

Besides, from 2009 there is a Program of Cooperation between the PRC and the administrative units of the Far East and Eastern Siberia, during which under direct investment has already been transferred 22 project between China and Russia.

Yet 25 projects are at the stage of searching for a financial donor, 4 develop technical documentation, 6 abandoned by Chinese investors, after, How did they know they couldn't make a profit?.

Pulp war in Transbaikalia

For the last 40 not a single large pulp and paper mill has been built in Russia for years (Central Bank), in most cases, domestic producers modernized existing capacities. The only one in this regard is the Amazar Pulp and Paper Mill in the Trans-Baikal Territory (the project is being implemented with the participation of the Chinese Huae Sinban), which is now in an abandoned state since the beginning of its construction in 2013 year.

Covered at the end 2017 the river Amazar dam, built without ecological expertise and discussion with the population.

She disrupted the migration routes around 20 species of local fish and endangered the largest population of Siberian taimen in the Upper Amur ("fish pass"), included in the international and regional Red Books. The construction and launch of the plant caused irreparable severe environmental damage to Russian forest and water lands..

The Amazar Pulp and Paper Mill has not brought a penny of profit to the Trans-Baikal Territory over the years of its existence. Primary developments showed, what the plant can produce per year up to 400 thousand tons of pulp, under such a load, the enterprise would need approximately 1 million 700 thousand cubic meters of wood per year. And then the first important inconsistency appeared - there were simply no such raw materials nearby.

Lease and sale of Russian lands

Back at the end 2009 President Dmitry Medvedev and Chinese President Hu Jintao approved cooperation programs between the border regions of Russia and China for 2009-2018 years. In the Jewish Autonomous Oblast and Khabarovsk Territory alone, Chinese villagers rent about 426,6 thousand hectares of land for growing soybeans, rice and vegetables. The Chinese bring their technology here, attract their workers. Over the past years, the processing of these lands in the region has attracted 2,5 thousands of Chinese.

In total, Russia leases several million hectares of its land to China..

Let's not forget, what in 2008 Tarabarova Island and part of Bolshoy Ussuriysky Island on the Amur River were transferred to China from Russia.

Kite

Russia ranks only eighth in global pulp production, although it has significant reserves both in terms of import substitution, and export expansion. AT 2016 the Russian Federation exported 2,1 million tons of market pulp. for comparison, largest exporters with annual deliveries from 7 to 11 million tons are Brazil, Canada and USA.

experts note, that today no company in the Far East can independently implement the Pulp and Paper Mill project. Must be industrial, financial partner. Investment volumes are too high, and the risks in Russia, on the example of the same Amazar plant, and at all, apart from financial, also resulted in negative reputational.

It is worth saying, China to 2020 plans to reduce commercial deforestation to zero in 2019.

Therefore, it is extremely important for Chinese companies to have time to arrange supplies of a source of cellulose from outside. Russia intends to reduce the export of unprocessed timber. To achieve its deep processing, in the Far East, it is planned to introduce the possibility of exporting roundwood at a reduced duty to the volume of commissioned processing capacities.

China is interested in two existing Russian pulp mills in Karelia and Vologda Oblast, as well as a woodworking enterprise in the Krasnoyarsk Territory.

The investor plans to increase the capacity of Russian factories, becoming part of their management. And here the main thing is to calculate from Russia all the possible and impossible pros and cons of such investment.

Moscow Metro named after China

It is in the PRC for the last 15 years built 119 metro stations (more 10 stations per year). No side peace, including the United States of America, was incapable of such a feat..

Now the Chinese have taken up the construction of the Moscow metro, and "threaten" to stamp so many stations in the capital, how much will it take.

The question of the quality of future stations is open.

What Russia is investing in China?

— Factory in Shuanyashan city, engaged in the production of vanadium pentoxide received 18 mln USD from Petropavlovsk Group of Companies.

— GC "Rusal" invested 15 million dollars in two enterprises for the production of cathode blocks for aluminum smelters. Location — Shaanxi Province.

— Construction of an oil refinery in Tianjin, in which Rosneft has invested 5 billion. Unfortunately, the implementation of the idea of ​​direct investment was not allowed by the Chinese side, selling only 49% available shares.

— OJSC Kuibyshev Azot invested 8,1 million dollars in the development and creation of building plastics. true, 10 million was given to the enterprise by the trading company "He Ye", registered in Shanghai, therefore, the Russian side again did not receive a controlling stake.

— Concern "Energomera" from the Stavropol Territory took part in the construction of an enterprise in Changzhou, specializing in the production of components for the manufacture of solar panels.

— Creation of FescoLinesChinaCompany, in charge of logistics. The volume of investments in 1,56 million dollars allowed to create an investment object with 100% Russian capital.

Speaking about Sino-Russian cooperation in investment matters, then businessmen from the PRC are doing their best to prevent a foreign donor from obtaining a controlling stake.

Chinese diversion version

According to one version of experts, China can simply use Russian factories and resources to pump out the necessary raw materials. He is unlikely to help in development., because in the country, where is cheap raw material, it is unprofitable to develop industry to such a level, when it gets more expensive. And, participating in investments from some side, and receiving all the benefits of such use of resources, there is simply no point in changing the strategy.

Fool the Russian government? Yes, right here along Pushkin:

Brother, it's not difficult to deceive me!…
I'm glad to be deceived myself!

Only in this case it is not the government that is deceived, it calculated quick economic benefits for itself. Deceived the population of Russia. And then at least the grass does not grow - especially after the burning of Russian arable land with Chinese chemicals and the displacement of Russians from the border areas.

China, naturally, primarily interested in the forest, lungs of our country, which are getting smaller every year., while Chinese surgeons remove it piece by piece.

partly, for money, in part - long gone, almost free for you. It is possible to carry out practical economic work for the sale and restoration of forest lands (and the Scandinavian countries are an example), true, it won't always bring fast, and most importantly, "dark" money, who "masters" the territories of Russia with a slightly different bias within the country.

In the meantime, Russians massively order goods on AliExpress and carefully monitor parcels online.. China, at this time, is tracking and discovering new territories for itself and orders slightly different goods from the Russian government..

Dmitry Stepnov

A source

                          
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