Eurasia Border Review;Volume 4, No. 2

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The Effect of the Border on Chinese Direct Investments : Evidence from Russian Border Regions

Novopashina, Alina

Permalink : http://hdl.handle.net/2115/54133

Abstract

This paper describes the effects of the border on Chinese direct investments to Russian border regions. The findings of this paper show that Chinese direct investments to Russia gravitated to industries in the border regions exporting their goods to China and to the production of non-tradable goods in non-border regions. The net Chinese foreign direct investments (FDI) inflow to Russian border regions is very small but the development of border trade led to informal investments between Russian and Chinese border regions. The case study of Amur oblast suggests that informal Chinese investments go to the sectors associated with trade: logging (raw timber primarily exported to China), construction of shopping malls, wholesale and retail. The results suggest that the amount of informal Chinese investments significantly exceeds the amount of formal investments.

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