Chinese Building Materials' Opportunity in Russian Market

Russia is our neighbor, but I really know little about this country, except for the super power in the cold war and now the emerging super energy power cross Europe and Asia. In my eyes, it should be difficult to do business in this country. The country had bad credit record. Many reported ethnic violence and some big terrorist attack in the last years. But these difficulties have created and are creating fortune opportunity for bravers and risk takers. And I think just like other BRIC countries, Russia is doing better and better for business.

I met one guy from Wenzhou who does trading business in Russia. He earned quite a lot several years ago, selling Wenzhou shoes in the country. He told me several of his ventures in Russia. I think many people imagine Russia a dangerous land. But I don't think so. The worst experience he told me are only the bribery and violence of the police. Anyway, he was still alive after he got much money from the country. And in St. Peterburg and Moscow, real estate market is really hot. The average price for apartment is already 3000-4000USD/sqm, the central area even higher, reaching 8000USD/sqm. In the last two years, the construction area for residential and commercial buildings has already past the summary of last 10 to 20 years! Russians are investing in their own land for a better life! They definitely need a stable and safe society, for life and for business. So I think even there is potential risk, the things are just changing to be better off.

Let's look into the building materials market. The booming of the real estate and the rise of living standard lead to more invest in building materials, both new and old housing. Shortage of some products even occur in some places. The Chinese goods with low price are really very competitive. Trading building materials is good chance. But we must keep close eyes on some trends:
- Russian customs. To many smuggle nowaday. The Russian government will make efforts and the market price of import goods will increase with a better customs.
- Restriction on foreign investment in retailing.
- Restriction on worker immigration.
- Credit risk