Peculiarities of Chinese Foreign Direct Investments (FDI) in Russia during 2020–2024

This article explores foreign direct investment (FDI) from Chinese investors into the Russian economy during the period from 2020 to 2024. It identifies trends in the annual volumes of new FDI and examines individuals deals based on data from open sources. The relatively small number of transactions completed during this timeframe allows for a comprehensive analysis; however, it also imposes limitations on the identification of statistically significant patterns. Nevertheless, the examination of real cases has unveiled several recurring behavioral patterns among Chinese investors in Russia. By engaging with these patterns, it is possible to enhance the beneficial effects of FDI for Russian regions, particularly in the Far East, to attract foreign financing for sectors in need, and to prioritize key projects. The study discusses four investment companies that executed deals involving the acquisition of tangible assets in Russia during the specified period, analyzing distinct investment projects and posting assumptions regarding the motivations and investment behaviors of each firm under consideration. Special attention is given to recurring patterns in the conduct of Chinese investors, including the timeline for return on investment, partner selection, interactions with the local market, and collaboration with regional authorities. The findings indicate the popularity of investment projects with a medium payback period (more than one year but less than ten years), the predominance of state-controlled Chinese companies over private ones, the prominence of investors' motivations to seek strategic assets in the host country, and comparatively lower popularity of resource extraction projects with long payback periods (over ten years). The author posits that this trend may be attributed to concerns among Chinese investors regarding the security of their assets in Russia over an extended period. The conclusion of the article outlines several findings and hypotheses for further research on this topic.

Chinese FDI, economic policy, attracting Chinese capital, investment projects between Russia and China, regional development in Russia, investments in the oil and gas sector