FDI motivation and entry strategies of Russian companies in the Chinese market

Abstract

Russia maintains a strategic partnership with China, which became its largest trading partner. Bilateral relations have become even stronger because of Russia's "Pivot to the East" policy. China continues to provide ample opportunities for foreign investors in its market, gradually liberalizing the investment regime. Since foreign direct investment (FDI) follows trade flows, it is reasonable to assume the expansion of Russian FDI in China. In fact, we observe a reverse trend, as Russian FDI is very small and declining since the global crisis. The article reveals the motivation of Russian companies investing in China and their market entry modes. Particular attention is paid to main obstacles and key success factors of Russian companies in China.