Twenty percent of Chinese companies operating in the Russian market plan to increase investments in their business in Russia, which is equal to the percentage of those who intend to maintain their investment level after the coronavirus pandemic, according to the results of the poll by the Russian-Chinese Friendship, Peace and Development Committee and the Union of Chinese Entrepreneurs released on Friday.
The survey took place between April 20 and 26, and involved 30 companies, which represented construction, metalworking, development and installation of oil and gas equipment, trade and other industries. “Despite the crisis that has gripped the entire global economy today, as well as the current state of the Russian economy, almost 100% of the Chinese entrepreneurs surveyed do not plan to leave the Russian market. The exception was the hygiene products company. It plans to leave the Russian market as soon as the coronavirus pandemic ends. At the same time, 20% of the companies surveyed do not plan to reduce investments in their businesses in Russia, and another 20% make plans for further expansion of the business,” the survey materials made available to TASS say.
Respondents noted the closure of borders among the biggest problems faced by Chinese companies in the last two months: many Chinese employees who went on vacation or on a business trip to China were unable to return to Russia to work. Also, respondents in all areas (except for sanitary products) record a significant drop in sales, a decrease in orders and a decrease in demand. Representatives of Chinese companies see the risks of currency losses due to the exchange rate differences.
In addition, the problems included delaying the delivery of goods and services, commissioning or starting work at construction sites, signing contracts, making decisions in the field of investments projects, paying off loans and so on, as well as the risk of loss of trust on the part of Russian customers and partners in relation to Chinese companies, follows from the survey.
“In general, Chinese entrepreneurs believe that this pandemic is a temporary phenomenon. Despite all the difficulties and inconveniences due to the introduction of various kinds of restrictive measures, many companies plan to further develop their business in Russia,” the materials read.
Business support measures in Russia
The Russian government previously adopted a package of measures to support business during the coronavirus pandemic. Thus, small and medium-sized businesses from the most affected sectors will be able to count on the delay in rental and tax payments, with the exception of VAT. In addition, a moratorium on the bankruptcy of such companies is being introduced, and special credit programs are also being launched.
On April 15, at a meeting with cabinet members, Russian President Vladimir Putin demanded that the government begin preparations for new measures to support the economy in the pandemic. In particular, small and medium-sized enterprises will be able to receive 12,130 rubles per month for the payment of salaries to each employee in case of maintaining at least 90% of the staff by April 1.
In late April, Putin instructed the government, together with regional authorities and business representatives, to embark on a nationwide action plan to normalize business life, restore employment and incomes and boost the economy. As the president emphasized, the program is aimed at not only stabilizing the situation, but also ensuring long-term changes in the Russian economy, taking into account the new reality.