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The investment market in the Russian Federation is collapsing, foreign investment in the Russian economy is approaching zero. Even China cannot help its economic partner due to the threat of secondary sanctions. This was stated on the air of the FREEDOM TV channel by Doctor of Economics, Professor of the Taras Shevchenko National University of Kyiv, CEO of the Advanter Group Andrey Dligach.
“The index of Russian government bonds has fallen to its lowest level since the 2008 crisis, which is a significant indicator. The ruble exchange rate is artificially restrained. And in all fairness, there is not much to restrain there. In addition, the ruble is not enough, rubles are not enough for the Russian economy, not to mention the shortage of convertible currency. All this affects both the stock market and the ability of Russian companies to attract at least some financial resources,” he said.
Dligach emphasized that foreign investment in the Russian Federation is approaching zero, but there is also a collapse in investment on the domestic market. Kazakhstan and Uzbekistan are no longer helpers for Russia in this story. But even China will not be able to help.
“We are already seeing China’s refusal to provide loans to the Russian economy. China itself received the lowest level for attracting foreign investment in 2023. It was a year of negative investment inflow of $100 billion, which, in my opinion, is the first time in 20 years. And the loss of investment is a catastrophic situation for the Chinese economy,” he noted.
In the current conditions, the expert does not see any reason for Russia to improve the current situation, including at the expense of China. Beijing is afraid of secondary sanctions for interacting with Moscow, and therefore the largest Chinese banks have already begun to limit operations with the Russian Federation.
“Because large Chinese banks, under the threat of counter-sanctions, preferred to remain on the world market, to remain with the dollar, preserving for themselves the opportunity to service global commodity flows. And the condition for remaining in the dollar was to stop working with Russia, to help Russia bypass sanctions. Accordingly, large international Chinese banks have refused to cooperate with Russia,” Dligach explained.
However, there are still small banks and regional banks in China that are less dependent on global markets. They will save the situation in a certain way, helping Moscow maintain the flow of dual-use products and purchase them in China, the expert added.
“Therefore, unfortunately, we cannot count on the imminent death of the Russian economy. But we are counting on the strengthening of American and European sanctions, especially secondary ones. At least, we constantly send our analytics to the European Union, to the USA, and I hope that these decisions will be made soon,” Andrey Dligach concluded.
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Recall that the Russian economy cannot develop under the pressure of sanctions. And if the Russian Federation does not stop the war it has unleashed against Ukraine, then the collapse of its economy is inevitable from 2026.
