Page 20 - bne IntelliNews weekly newspaper June 23

Opinion
June 23, 2017 www.intellinews.com I Page 20
food and tobacco and other consumer focused sectors. The number of individual projects was more than 30, up from 21 in 2015 and 12 in 2014.
But, as mentioned, Moscow’s perceived need
for Chinese investment has changed since 2014. Partly this is because the economy is in relatively better shape and the widely predicted doomsday scenarios failed to materialise. A major reason
for that is that Russia, faced with no easy way out, had to make the tough choices, such as letting the ruble freely float, and saved itself. That is a lesson that the Kremlin has learned and it has shaped trade and investment and political relations since. Russia is no longer interested in the sort of close and vulnerable relationship it once had with the US and EU, and which it nearly fell into with China in 2014. Been there, done that, didn’t work out.
Today the policy is one of diversification. India’s Prime Minister was prominent at the recent St Petersburg Forum and Japan’s Prime Minister has become a frequent visitor to Russia. Accord- ing to FDi Monitor, Russia was the third most attractive investment location for EU investors in 2016, attracting $12bn in deals, most from Ger- man companies. The November deal with Opec has greatly improved relations with Saudi Arabia and other Arab states and investment from that region is also picking up.
One example is the project to develop the former Tushino military airbase, in north-west Moscow, into one of the largest technology parks in Europe. The investors in the project are the Russia-China Investment Fund (a 50-50 $2bn venture between the Russia Direct Investment Fund and the China Investment Corporation) and some Arab sovereign fund investors.
This project does also show how, on the one hand, Moscow has diversified its investor base and has a more confident position when it comes to deal structures, but of course it also shows how China has adapted its approach. The Tushino Park will be home to Rostec, the state company at the
core of the military industrial complex and owner of many of the advanced weaponry that Beijing would still like to buy from Russia. Now they will be neighbours in a Moscow suburb. Somebody should tell US Congress that they should be care- ful what they wish for.
Chris Weafer is a founding partner of Macro-Advi- sory, which helps investors cut though the noise & focus on underlying trends, real political risks, & opportunities in Russia/CIS, Eurasia Union, & Mon- golia. Follow him on @ChrisWeafer.
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