Russian market finally starting to receive significant investment from China - VTB CEO

ST. PETERSBURG. Sept 24 (Interfax) - Chinese investors, who had been in no rush to fill the niches left vacant by the withdrawal of Western capital from the Russian market, have finally begun to show serious interest in investing in Russia, VTB CEO Andrei Kostin said.

"Overall, it seems to me that the [loan] portfolio is growing at a sufficient pace, given that we do not anticipate high rates of economic growth. This is, of course, a key factor for future challenges, as investment is declining. Fortunately, however, according to my data, we are now seeing a significant uptick in investment from Chinese sources, something that had been absent in the years following 2022. Investors from the Arab world are also showing interest. We will discuss this topic at our Russia Calling! forum in December, but the trend here is positive," Kostin said at the 23rd International Banking Forum.

"But overall, of course, we still have work to do. We have completely forgotten the term investment climate. In the past, every event focused on the investment climate, but now it is as if it does not exist. In reality, it is deteriorating. In my view, not just because of sanctions and the like, but for a number of other reasons as well. So, we need to look at this carefully if we want to foster investment, including attracting foreign capital," Kostin added.

Kostin cited external shocks and property rights risks when talking about the factors negatively affecting the investment climate.

"Many are shifting their assets. Large entrepreneurs, for instance, are investing not in their core businesses, but elsewhere, trying to diversify, saying, 'They will take it away anyway'. One has to be very careful here. I think these fears are exaggerated, but they do exist," Kostin said.

"We certainly lack foreign investment. Of course, any healthy economy attracts a great deal of investment," Kostin added.