Factors of Russian Regions’ Investment Attractiveness for Chinese Investors

Abstract

Economic collaboration between Russian regions and China is increasing amid ongoing geopolitical challenges. With limited ties to most European countries, Russian regions are pursuing a “pivot to the East,” seeking investment opportunities primarily through Russian-Chinese projects. It is, therefore, an urgent task to identify the factors attracting Chinese FDI to Russian regions The methodology combines regression and logit models to forecast investment inflows, supplemented by informal methods such as surveys of potential investors and scoring based on business cooperation, transport accessibility, industry diversification, and the strength of Russia-China relations. The research identified regions with high, moderate, and low investment attractiveness. In border regions, Chinese FDI is diversified across manufacturing, transport, logistics, and agriculture. Growth in Chinese FDI is expected not only in these border areas but also in regions with strong production capacity and market potential. Key factors driving Chinese investment include the construction of transport infrastructure and development of economic corridors. Among the most attractive non-border regions for Chinese investors are Murmansk, Kaluga, Kaliningrad, Arkhangelsk, Chelyabinsk, Nizhny Novgorod, Tula, Orenburg, and the Republic of Tatarstan. Additional factors encouraging FDI inflows include the size of the consumer market, export potential, proximity to transport corridors, cluster policies, and bilateral agreements. The study also found that Chinese investment is likely to support regions’ current industry specializations without altering their overall structure.