The Russian economy experienced a flight of investors from China in 2020.
Despite attempts to turn to the East and statements about strategic partnership with Beijing, Chinese investors took every second dollar invested in the real sector of the Russian Federation.
During the first and third quarters of 2020 (the last available period of statistics), the volume of China’s direct investment in Russia fell by 52% – from $ 3.735 to $ 1.83 billion, follows from the data of the Central Bank of the Russian Federation (.xls).
The volume of investments by Chinese residents directly into the capital of Russian business fell by almost 5 times – from $ 2.28 billion to $ 480 million.
Investments in “debt instruments” fell slightly less – from $ 1.45 to $ 1.35 billion.
Compared to 2014, the Kremlin decided to move closer to its eastern neighbor in response to the collapse of relations with the West, the volume of Chinese investments in the real sector of the Russian Federation fell 2.5 times.
The current indicator is the lowest ever available statistics from the central bank. China accounts for only 0.4% of foreign direct investment – 9 times less than came from Germany ($ 16.6 billion), and 68 times less than Cyprus residents invested ($ 123.4 billion).
Seven years of attempts to persuade Chinese business to invest in the real sector of the Russian economy, finance the modernization of infrastructure, or at least participate in joint projects have ended in nothing.
China refused to finance the construction of the Power of Siberia and does not plan to allocate funds for a second similar gas pipeline. He declared unprofitable the Eurasia high-speed railroad – from Beijing via Moscow to Berlin – which Russian officials hoped to include in the New Silk Road; and refused to invest in the construction of Russia’s largest gas processing plant in the Amur Region.
Attempts to attract Chinese banks to the Russian alternative to SWIFT are unsuccessful: according to the Central Bank, only one bank from the PRC (Bank of China) has registered in the System for the Transfer of Financial Messages (SPFS).
In February 2021, the Russian Ministry of Finance announced that it was transferring 15% of the sovereign wealth fund to Chinese yuan, following the Central Bank, which invested heavily in Chinese currency back in 2018.
Since April, the yuan investment has been put on a daily basis. As part of operations to replenish the NWF until May 7, the Ministry of Finance will invest 1.26 billion rubles from the federal budget in Chinese currency.