Spotlight: Russian businesses interested in creating joint ventures with Chinese partners

Russian small- and medium-sized businesses are interested in various forms of cooperation with Chinese partners to explore both Chinese and Russian markets, officials said Monday.

High-level delegations of the two countries Monday attended the second two-day China-Russia small- and medium-sized companies forum in Russia's Black Sea resort of Sochi.

"We have capacities to supply products which will find demand in the market," Alexander Braverman, head of Russia's Federal Corporation for Development of Small and Medium Enterprises, told Xinhua.

Braverman said that Russia is keen to diversify its national economy by favoring the development of small- and medium-sized high-tech businesses.

China, having been successful in creating low-cost, high-quality and high-tech production facilities, can share its experience with Russian partners, he said.

Another official said Russia is interested in creating joint ventures with Chinese small- and medium-sized businesses.

"We are interested in creating joint ventures with Chinese companies," said Andrei Sharov, vice president for small business development at Russia's top lender, the state-run Sberbank.

Sharov said recent legislative amendments allowed foreign investors to have a share of up to 49 percent in joint ventures that fall in the category of small- and medium-sized businesses.

Sharov said joint venture companies between China and Russia can now have access to the entire system of government support and are entitled to all the benefits that Russian small- and medium-sized businesses are entitled to, including subsidies to compensate the interest rate on loans.

The Russian government has also required large state-owned corporations, like gas and oil giants Gazprom and Rosneft, Russian Railways and others, to buy no less than 10 percent of their equipment and services from small- and medium-sized enterprises.

The demand for such goods and services is currently estimated to surpass 500 billion rubles (over 7.5 billion U.S. dollars), Braverman said. Sharov is more optimistic and put the value of the overall market at several trillion rubles per year.

Russia experienced a shortage of companies capable of producing competitive goods to meet the demand of state-run enterprises, Braverman said.

"Here the creation of Russian-Chinese joint ventures will be very much in demand," Sharov said.

Russian businesses are also interested in exploring the Chinese market. It would be helpful if some of the certification procedures in China for Russian products can be further simplified, Braverman said.

As for Chinese companies exploring the Russian market, it is good if they can obtain better insurance coverage against some risks, Sharov said. Endi