Despite its isolation, China remains attractive to investors. The Russian market is too small to develop along this path

They promise that on May 20-21, Vladimir Putin will agree with Xi Jinping on the price of gas, which Russia will supply to China for 30 years - as soon as it builds a gas pipeline from Yakutia, it will immediately begin. The fact that these seemingly eternal negotiations are close to completion is only one of the symptoms of the “Chinese turn” observed in current Russian politics.

The new Cold War creates many problems for Russia that China can potentially correct.

Europe is threatening to reduce purchases of Russian energy resources - well, there is China, which urgently needs to switch from coal to less environmentally harmful gas. Western financial institutions are reluctant to finance Russian companies, which even previously received loans from them without problems - well, loans and investments can be attracted in China (this is also one of the topics of Putin’s visit). Because of Ukraine, problems may arise with the export of Russian weapons - well, you can become a little less careful in selling these goods to the Chinese, and at the same time undermine the Ukrainian arms business with Beijing, which the current Kyiv authorities would like to continue.

Putin spent ten years of his rule trying to strengthen relations with Europe. Only after coming to power, he did not rule out NATO membership for the country, and considered the European path the only acceptable one. Cooperation with China has never been a priority topic - rather, Moscow limited itself to routine demonstrations of good neighborly relations. Since Chinese politicians are traditionally leisurely and prudent, it is difficult to believe that now that a “Plan B” is urgently needed, relations will be intensified on fire.

But you can quickly imitate Chinese management practices in Russia itself.

The analogies between the national payment system being created and UnionPay are obvious, and government agencies are discussing partnership with it.

Internet content filtering , the introduction of which seems to be a matter of the near future, and the possible transfer of DNS servers of Russian domains to the country - this is the Chinese “Great Firewall” scenario.

Even Deputy Prime Minister Dmitry Rogozin’s threat to turn off the ground-based GPS structure in Russia and stop exporting rocket engines to America is a move towards China, where it operates its own Beidou navigation system and where there is a quite successful space program, isolated from the American one.

The only trouble is that in a hurry you can only get a cheap imitation. A kind of Chinese knockoff.

UnionPay grew out of the “Golden Card” project, started back in the early 90s. The Great Firewall, also known as the Golden Shield, began construction in 1998. The isolation of the Chinese space program is the result of a falling out with the Soviet Union in 1960.

Russia, of course, almost managed to imitate the Western model with an open market economy and a semblance of democratic institutions - it took about five years in the 1990s, despite having to start from a rotten Soviet base, so it will probably be faster to create a similarity to China.

The question is what to do with it then. The Chinese model works so well because it is accepted by the outside world. The country's economy is second in the world after America's in terms of attracting foreign direct investment. Last year, China received $127 billion, just $32 billion less than the United States. Portfolio investors also treat Chinese companies better than Russian ones. The market capitalization of Yandex is less than $10 billion, the Chinese search engine Baidu is almost $54 billion, and the P/E ratio - the ratio of capitalization to profit - for the Chinese company exceeds 30, and for the Russian one it does not reach 25.

The West looks to China with respect and hope because of its huge population.

The leader of Chinese online commerce, Alibaba, will soon attract up to $20 billion in the American market, although the company in which investors will buy shares will not own licenses for any of the resources that generate money. These are the Chinese laws that Russian legislators would like to imitate: only Chinese citizens and companies can own strategic Internet resources. Nevertheless, Western financiers will rush to buy Alibaba’s shares for the sake of involvement in the world’s largest market. Even limited activities in China represent volumes of business that are impossible for most other countries, and international companies are willing to make any compromises with Chinese regulators. Can't Visa and MasterCard process domestic transactions? Nothing, they agree to work only with cross-border ones.

But hardly anyone would invest money in a Russian company that owns nothing even in the best of times. For the sake of some 140 million people? It’s a matter of 1.4 billion. And for the same payment systems, cross-border transactions of Russian clients alone are an inconspicuous business: if they have to limit themselves, Visa and MasterCard will simply lose interest in our country.

But it’s not only about the size, but also about the movement vector.

The Chinese investment story is about the gradual opening of a giant market. The Russian one is about the unexpectedly quick closure of a relatively large one. This kind of story is not interesting to buy because the future in it is darker than the present.

And with an uninteresting history, Russia, imitating the Chinese model, is only suitable as a satellite of China. Beijing will not rush to transform Russia into the Province of the Northern Pipe: they will continue to show all sorts of honors to their great northern neighbor, bowing and smiling. Until Chinese names inadvertently appear in conversations about the successor to 90-year-old Putin.

Why the Chinese model will not work in Russia