Moscow is stepping up efforts to attract foreign capital, especially Chinese funds, to invest in infrastructure and high-tech projects in the Russian capital, according to Mayor Sergei Sobyanin.
“Foreign investment has grown 10 to 15 percent in the past few years on average, and we expect the growth rate to stay the same in the coming years,” Sobyanin told EJ Insight in an interview during his visit last week. More than US$90 billion in foreign investment flowed into the city last year, of which 4.5 percent was from China.
In Moscow, the most attractive sector for capital investment is property, particularly housing as well as construction of commercial buildings and shopping malls. “We also want to see more investment in social-oriented facilities such as expressways and infrastructure,” he said.
Sobyanin was part of the Russian delegation during President Vladimir Putin’s three-day visit to Shanghai, where he and Chinese leader Xi Jinping witnessed the signing of a long-awaited natural gas supply contract.
During the visit, state-owned company JSC Mosinzhproeky also signed an agreement with China Railway Construction Corp. and the China International Fund for the construction of a metro line under the “New Moscow” urban development project, the Moscow government said in a statement on May 19.
After Shanghai, Sobyanin went to Hong Kong as part of his efforts to strengthen cooperation among the three cities. “Hong Kong is well-developed in transport infrastructure, we would like to study Hong Kong’s successful experience in creating a modern and comfortable urban environment.”
“Investors can see higher returns by investing in Moscow as we have high property prices both for housing and commercial buildings,” he said. An average of 20 million square meters of construction projects, including residential and office buildings, are built every year in the greater Moscow area.
The New Moscow urban development program, which aims to double the size of the city, has received US$4 billion in investment since its approval in 2012 and is expected to attract more than US$200 billion by 2035. It will occupy 148,000 hectares from south to west of the Russian capital, Sobyanin said, comparing it to the Greater Paris project which also aims to develop the French capital and its suburbs into a thriving 21st-century metropolis.
“We are going to establish new centers of economic growth, redevelop the road network, modernize our transport infrastructure, and create new parks and recreational spaces,” he said. “We therefore would like foreign funds, especially from China, to participate.”
Moscow is also seeking to attract investors in high-tech manufacturing facilities for a science and technology zone that will soon be up and running in an area called Zelenograd.
“We have been talking with Chinese businessmen about participating in the project,” Sobyanin said. He said investors could take advantage of land premium and tax incentives and the city already has infrastructure in place so Chinese partners do not have to invest from scratch.
In addition, work is under way on Russia’s Silicon Valley, the SKOLKOVO innovation center. Registration procedures are as simple as possible and can be completed in days.
On April 1, Russia simplified visa applications procedures for tourists, especially for tour groups, so as to lure more visitors. The country also lengthened maximum stays from 30 days to six months. Non-Russians will also find it easier to enter Russia if they are coming to forge cultural, scientific, social, political and sporting ties.
Moscow hopes to attract more tourists from Hong Kong and mainland China. Of the more than five million foreigners who visit the capital each year, about 400,000 are Chinese.
“Chinese are now the largest group of visitors to Moscow, with a yearly growth 40 percent, and we expect the trend to continue,” Sobyanin said. “And don’t forget to factor in the rising disposable income of the Chinese people.”
Moscow is also improving hotel rooms, pedestrian zones and other tourist facilities across the capital.
“Only last year, we built 50 new parks and refurbished 60 existing parks to improve the environment,” he said.
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