Chinese FDI in Russia drops 20% as gas deal faces delays

Chinese FDI in Russia  dropped by 20% between January and August compared to the same period in 2014, according  to a senior official in China’s Ministry of Commerce. “Direct investments in the real economy are decreasing while the volume of portfolio investments is increasing,” the head of the Europe and Central Asia Department of the Chinese Ministry of Commerce Lin Zhi  told TASS this week. “We cannot say that investment activity is decreasing, but the investors are taking the economic difficulties into account and choosing new ways to invest in the Russian economy,” TASS quoted as saying.
A report in today’s  Gazeta, meanwhile, speculates that falling oil prices are undermining negotiations between Russia and China over the $30bn gas deal that was agreed in principle last year. For Russia to recoup the cost of constructing the pipeline, the price of gas needs to sell for as much as twice  today’s price of  $ 200 per 1,000 m³.