The Participants of the 4th Russian-Chinese Forum “Investing in Innovation” discussed the prospects of partnership in the field of technology


On September 26, 2019, the 4th Russian-Chinese “Investing in Innovation” Forum was held in Moscow. The Forum brought together more than three hundred representatives of companies and foundations, including China Aviation Industrial Fund, TechnoSpark Beijing Science and Technology, Chuanfeng Investment Management Company, LLC, Leader, CJSC, Shenzhen Capital Group and the Russian-Chinese Venture Fund. The Forum guests discussed issues of joint commercialisation of innovative products and the creation of venture capital funds. A separate thematic track of the Forum was artificial intelligence.

Opening the Forum, RVC General Director Alexander Povalko noted that the field of innovation remains one of the main points in the development of partnership between the two countries.

“The choice of artificial intelligence as a key topic of the Forum is not accidental, it is a priority cross-cutting technology in RVC projects and government programs for scientific and technological development of Russia,” he emphasized.

RVC Investment Director Alexei Basov presented the Chinese investors with an overview of Russian investment landscape and told about RVC's work with foreign funds:

“For the state, RVC acts as the centre of expertise, we help management teams to form a pipeline and go beyond Russian market, and we offer corporations a set of acceleration products to create a closed loop for supporting internal innovations. RVC also provides a wide range of support tools for portfolio companies.”

Peng Zhen, the General Director of Chuanfeng Investment Management Company, LLC, shared his experience of organizing a private investment platform for high-tech start-ups. His Chuanfeng Foundation was created in 2012 on the border with Russia, near the city of Blagoveshchensk.

“There is great energy potential in the Russian Far East, and we do not have it in Heihe, so we decided to build cooperation in the energy field. Now the main thing is to identify these areas of cooperation and establish mutually beneficial ties,” he said.

Boris Galkin, the General Director of TechnoSpark Beijing Science and Technology, told how he brings Russian companies to the Chinese market:

“It is very convenient to work with Chinese colleagues when you bring to the market advanced technology at the development stage. But there are some errors: we often think that our Russian experience with a 100 percent hit will be applicable in China. This is not true. Everything must be landed on local reality. Chinese investors are interested in Chinese references, not Russian ones. If we spend time and resources on recognizing each other, then communication will be much more effective. ”

Among the main obstacles to effective cooperation, the panellists noted weaknesses in the regulatory system of both countries, problems with intellectual property, as well as cultural differences.

“The business model of joint ventures and foundations is the most acceptable form of Russian-Chinese cooperation, and not because of cultural differences, which, of course, also exist, but because the ecosystem of the markets is very different,” says Fyodor Susov, a member of the Russian Investment Committee-China venture capital fund. “In China, strong local companies are everywhere at auctions, unlike Europe, where there are usually several large international players.”

Su Jing, the Deputy Director of the Pue business incubator, told about the incubator, which aims to transfer technologies from Russia to China and commercialise them on the local market. According to her, the volume of private and public investment in projects that have passed the incubator has reached $20 million and will grow:

“We are working with Russian partners in all areas, and now an important era is coming in our cooperation. We have to form new mechanisms and platforms, remove barriers and restrictions.”

Chen Liang, Deputy Director of the Research Institute of High-Tech Equipment at the Polytechnic University, added that Russia and China should cooperate, including in the areas of real production and R&D. The work of the Zhenjiang branch is aimed at enabling businesses to use innovative start-up designs in production:

“This year, we organized the Day of Science and Technology, within the framework of which we created a Sino-Russian research institute for working with artificial intelligence technologies. Our institute plays the role of a bridge between business and researchers.”

Mikhail Antonov, Director for Development of Innovative Infrastructure of RVC, said that RVC is doing so that Russian and Chinese start-ups can cooperate more effectively. He cited two cases as vivid examples. The first one is cooperation between Russia and China within the framework of the NTI Competence Centres. These are 14 consortia based on educational and scientific organizations; each of them specializes in a certain cross-cutting technology: artificial intelligence, quantum technology, augmented and virtual reality, and others.

“The NTI Competence Centre for New Manufacturing Technologies has already completed a number of orders in the interests of Chinese companies. In particular, the car body optimisation project — it became 8% lighter, and this is extremely important for manufacturers.”

The second case is an export accelerator for Russian companies wishing to enter foreign markets. RVC selected 15 technology companies and prepared them to enter the markets of Southeast Asia. Of these companies, eight chose China.

“These companies managed to update their export strategy with the help of Chinese experts. They made products sought after by Chinese consumers. Out of eight, three companies received offers from Chinese investors,” added Mikhail Antonov.

Shao Yuanchen, director of the Shenzhen Stock Exchange, also shared the importance of cooperation. He noted that the exchange is ready to serve as a platform for contacts of Russian business with local investors:

“We want to list more and more high-tech companies. Incubation alone is not enough; we will help Russian start-ups to enter the Chinese market. More than five thousand investors are looking for projects for investment on our site, we are ready to connect them, including with Russian projects.”

Igor Pivovarov, chief analyst at the Centre for Artificial Intelligence at NTI based at the Moscow Institute of Physics and Technology, presented an overview of the AI industry in Russia and spoke about the opportunities for cooperation between Russian business and Chinese companies:

"We understand that China is a country with tremendous potential in the field of artificial intelligence, which, according to Kai-Fu Lee, the former Google CEO in China, has every chance of becoming a leader, at least in some sectors."

Zhang Usuy, the Director of the International Development Department of iFlytek (leader in the field of AI-based speech technologies in China) noted that high-quality translations play an important role in the implementation of joint projects:

“In many areas, it is precisely because of the lack of qualified translators and automatic translation technologies that obstacles and problems constantly arise.” To solve this problem, the company is developing online translation technologies and a system for teaching the Chinese language.

At the end of the session, Igor Pivovarov proposed combining strong technology teams from Russia with business teams from China. In his opinion, this could lead to the emergence of new fast-growing start-ups with high capitalization:

“We have a huge potential for cooperation. In Russia there are strong fundamental scientific schools, remarkable scientists, but we have difficulties with commercialisation. In China, I admire a fantastic business culture: extremely fierce competition, incredibly high speeds — this is a field with a tremendous amount of chances for honing business models,” the expert summed up.

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 Russian-Chinese Forum “Investing in Innovation”. 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. In September 2016, the Forum was held in Moscow, in June 2018 — in Harbin.

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