Participants of the Russian-Chinese Forum "Investing in Innovations" Discuss New Opportunities for Bilateral Cooperation
On October 16, the III Russian-Chinese Forum “Investing in Innovations” was held as part of the Open Innovations Forum. The participants discussed the development trends of the venture investment market and the innovation ecosystems of Russia and China studied the possibility of creating joint funds and investment projects in the field of high technologies. The forum also included a presentation of Russian technology start-ups in front of Chinese venture funds.
RVC, the China Torch Eurasian Cooperation Union and the Venture Committee of the All-China Association of Financial Assistance to the Development of Science and Technology with the support of the Ministry of Economic Development of Russia and the Ministry of Science and Technology of China organized the forum.
At the opening ceremony of the forum, RVC General Director Alexander Povalko noted the growing interest on the part of government and business on the topic of Russian-Chinese cooperation, and spoke about the results of the previous “Investments in Innovations” forums:
“Following the results of the two events, there are already tangible results — new funds appear, the number of transactions between the companies of our countries is growing, and we are also conducting joint projects and programs. Our common goal is to create conditions for the growth of the investment business in the technology sphere, while at the same time eliminating the barriers associated with the lack of information about the possibilities of interaction.”
Representatives of the Chinese delegation also noted the presence of the “green light” for joint investment technology projects.
“I am thrilled that I was able to come to Russia and participate in the III Russian-Chinese forum “Investments in Innovations”. Together with RVC, we have done much work to strengthen cooperation between our countries in the field of science and technological innovations. In particular, they have achieved new approaches to investment and achieved a better understanding of the characteristics of our markets. We hope for further positive dynamics and growth of joint projects,” said Xu Xiaoping, chairperson of the Venture Committee of the All-China Association for the Financial Advancement of Science and Technology.
Qualitative changes have recently taken place in cooperation between Russia and China, especially in the field of science and innovations, the Chinese Ambassador to the Russian Federation Hui Li said:
“Based on our cooperation, we are continuously moving towards stable economic growth. This is a consequence of the openness of our relationship. China and Russia are not only neighbours, but also good friends. Our goal is to increase mutual trust in all areas of interaction. Attracting new investments will allow us to improve the existing base of economic development continuously.”
Sergei Gorkov, Deputy Minister of Economic Development of the Russian Federation, shared his opinion on how to improve cooperation in the field of investment and innovation:
“Russia and China traditionally have long-standing good-neighbourly ties. Cooperation in the field of innovation opens up new opportunities. To force the innovation ecosystem in Russia, basic legislation has already been formed. Now our task is to use this potential more actively. It is necessary to support angel investment, to form new venture capital funds. For us, it is the export business acceleration that is important, which RVC says is about access to external, global markets.”
At the forum, the participants also discussed the investment landscape of Russia and China and possible models of cooperation. In particular, Alexey Basov, Deputy General Director — the RVC Investment Director, spoke about the state of the Russian venture capital market:
“Our market is a little less than 20 years old, but it already has all the properties of a traditional mature venture capital market. Today, we can carry out all the necessary transactions both within the country and with foreign players. We hope for closer cooperation with Chinese partners, which is expected to be the maximum this year.”
CreditEase Executive Director Yang Liu noted that today the Chinese venture capital market is showing high growth:
“This is due to China’s breakthrough in recent years in the agricultural sector and industry, as well as the introduction of new technologies and the development of online commerce. We are glad to see Russian players in the Chinese market. However, you need to understand that where there are opportunities, there are risks. To work in the market of another country, you need a good understanding of its features. The creation of joint funds and partner structures could help the investors in our countries.”
Rebecca Fannin, the founder of the American company Silicon Dragon News, shared her view of the Chinese market from the United States:
“In recent years, we have seen rapid technology growth in China. If earlier local manufacturers often copied foreign innovations, today they create and implement their developments. China almost does not use cash today. Now in investment, China will pay more attention to Southeast Asia. It is likely that interest in Russia will also increase.”
In discussing the prospects for cooperation, the forum participants also touched on the topic of sanctions as a possible constraint for financial operations and access to global markets. According to Alexander Lupachev, director of the Russia Partners fund, when it comes to partnership investments, the existing sanctions do not affect this business:
“Sanctions do not interfere with us for the development of foreign investment projects. Today, we interact with China on three levels: we invest in Chinese companies, attract investors to our funds and scale up the business of our portfolio companies in China. However, there are other certain difficulties out there. In China today, each company has 50-100 competitors for investment, and it is difficult to get information on them. At the same time, venture transactions here pass quickly. Investors have to either act at random, or look for partners who understand the local market. We chose the second option and entered the Chinese market through a fund of funds. There are always opportunities; the main thing is not to miss them.”
The event is held annually since 2016 in accordance with the memorandum on cooperation in the field of innovation, signed between the Ministry of Economic Development of the Russian Federation and the Ministry of Science and Technology of the PRC. This year, over 150 representatives of leading Russian and Chinese venture funds, institutional investors, corporations, government agencies, and the innovation infrastructure attended the event.