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China becomes top destination for Russian migratsn
August 10, 2013 Polina Rusyaeva, Kommersant
August 10, 2013 Polina Rusyaeva, Kommersant
According to Russian government statistics, most of the Russians emigrating from their home country were heading for Europe and North America in recent years. In 2010, these destinations accounted for 81 per cent of emigration from Russia; in 2011 the figure fell to 78 per cent. Last year, however, it plunged to 47 per cent, signalling a radical shift in migration patterns. The proportion of official Russian migrants heading for Asia rocketed from 19 per cent to 46 per cent. Emigration to Africa also rose from 1.4 per cent in 2011 to 5.6 per cent in 2012.
China claimed the top spot last year in the ranking of the most popular destinations for Russian migrants, accounting for 18 per cent of the total. According to government statistics, the number of official Russian migrants to China rose from 507 in 2011 to 4,400 in 2012, a record high since 1997, the earliest year for which figures are available. Germany, which had been the most popular destination for many years, is now second. Compared to 10 years ago, the number of Russians moving to China has risen by a factor of 50.
Heading for greener pastures
For Nikolay Koshel, moving to China was a no-brainer. In the mid-2000 the entrepreneur from Krasnodar made a living by selling clothes at one of the local markets and importing various goods from China. Now he lives in Guangzhou, southern China. He has brought his whole family with him; they rent a large 2,600 sq. ft. apartment with an attached plot of land for 2,500 dollars a month. His local company, Cimpex, which offers intermediary and logistics services to Russian importers of Chinese products, did 6.5 million dollars worth of business last year.
The Russian migrants to China we have spoken to say that integrating into the local community in China is not always a swift or easy process. The same is equally true of starting a new business in the country. Their advice is to plan everything in meticulous detail before launching any new projects.
Mikhail Ivanov, who owns a company called Unique Goods Centre, started his Chinese business two years ago. He spent a frustrating several months trying to set up the company in such a way as to be its outright owner - but to no avail. In the end, he was forced to set up a firm in his own name in Hong Kong, and register his business in mainland China as the Hong Kong firm's subsidiary.
For a foreigner trying to start up a business in China, obtaining all the necessary permits and registrations is often not the end of an arduous process, but just the beginning.
When you hire Russians, they work for you only for as long as they need to understand all the intricate details of the business and establish all the necessary contacts, Koshel complains. "Once that moment arrives, they quit to set up their own company, and take many of your customers with them." He has recently decided to hire only local Chinese staff from now on, even though this means that he will have to improve his Chinese language skills as soon as possible.
Experts say those skills, as well as the local business etiquette, are very important, especially during negotiations with Chinese partners. They also warn against some very common mistakes.
Sufficient demand
The Chinese government wants to provide an additional stimulus to domestic consumption as well as exports. In 2012 Russian-Chinese trade was up by 11.2 per cent to a record 88.16 billion dollars. Chinese exports to Russia rose by 13.4 per cent over the same period. Many Russian businesses are trying to cut costs, and looking to move production to China. This provides sufficient demand for the services of the numerous consulting companies set up by Russian migrants in China.
Whenever you ask someone who has moved from Russia to China about their business, the answer is almost invariably the same, says Anna Karavayeva, an independent consultant. She reckons that more than 90 per cent of the Russian companies in China focus on intermediary or consulting services. These services usually boil down to finding a local manufacturer for outsourcing; organizing local production; quality control; and shipping various Chinese goods to Russia. Smaller companies offer more or less the same range of services, only instead of looking for suitable Chinese manufacturers to set up local production they help Russian companies to find suppliers of Chinese goods.
