Evaluation Of Economic Efficiency Of Chinese Fdi In Russia

The government and business of China see Russia as one of the most important investment areas.One of the main reasons for this choice is huge potential of Russian economy.Nowadays,China is Russia's largest trade partner while Russia is China's fastest growing major trade partner.The development of trade has corresponded with increased cross-border investment,which is the cornerstone of our economic relationship.Investors in both countries are moving beyond traditional areas of cooperation and cultivating new fields of mutual investment.While strong economic growth in both countries certainly will produce many domestic opportunities for productive investments.China and Russia are getting increasingly closer economically and financially.China matters more and more in Russia's import and export.The level of the Russian-Chinese investment development cooperation does not currently fully show the potential level of political and trade relations between two countries.The task to increase Chinese investments up to $ 12 billion in the Russian economy by 2020 was set by the leaders of Russia and China.That looks very ambitious.The remoteness of Russian border regions from the national capital market is the reason behind the importance of using the advantages of the location and proximity of the borders to develop investment cooperation with China.All previous studies analyzed only which methods are preferred by CFO's to evaluate investment projects,but no one researcher developed reasons of choosing those methods and they didn't created a universal method of project evaluation.We can conclude that the existing methods do not always guarantee effective investment decisions-making.In this case we created the algorithm for determining the optimal model for evaluating the effectiveness of investment projects.The first chapter introduces the background,the objective of the study,the significance of the study,the literature review.The second chapter describes the definition of projects,the most attractive spheres and regions of Russia to invest for China.The analysis describes Chinese investments in Russian economy,advantages and disadvantages to investment to Russia,evaluation problem of investment projects.The third chapter shows developing a universal methodology evaluation method based on the comparing and critique of existing models.By results of the analysis formed the main conclusion consists in the recognition of the need for combination of several methods of efficiency determination of investment projects.The fourth part of paper describes areas of Russian investment climate improvement,recommendations for Russian and Chinese investment project management,and recommendations for further researchers.