Chinese and Russian Business Environment

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The purpose of this work is the comparison of business environment of Russia and China. Russia and China have a lot in common. Both countries are geographical giants with a rapidly growing economy, attracting foreign investors and companies of all sizes looking for new markets. At the same time, the economic features of the two countries are very different from each other.In this work, both countries will be discussed in terms of foreign investment. With the increasing globalization of the world economy and expanding business transnationalization of particular importance for the effective functioning of national economies is the need to optimize the model of bilateral economic relations. System of bilateral economic relations between the two countries can be seen in two ways: at the state level, which determines the overall concept, legislative framework and forms of cooperation, and at the level of business organizations, the ultimate goal of the operation of which is the increase in revenue and profitability by taking advantage of the business environment in the partner countries. A detailed study of the business environment is particularly important for the company in the initial phase of its release to the market of another country when choosing the scope of business, territory or region of investment, the legal form of business, partners etc. The degree of a favorable business environment is defined by a combination of factors and mechanisms,taking into account and using of which is to create conditions for the stability of the business environment and strong safeguards that reduce risks and encourage business development. Factors forming business environment can be divided into the following groups: ü Political;

ü legal;
ü economic;
ü social and cultural ü demographic;
ü technological; ü environmental.
Currently there is no single criterion for assessing the degree of favorable business environment. Most consulting companies, institutions, and international organizations that assess the level of attractiveness and competitive position of the national economies of various countries, use a long list of criteria, calculated on the basis of statistical data, survey data and external expert review in order to determine the impact of various factors shaping the conditions for business. We can take a look at some well-­‐known indexes, which can help us to judge the investment attractiveness of the country. In the table below we can see the comparative analysis of the positions of Russia and China in the 14 best-­‐ known rankings assessing the level of competitiveness and corruption, economic freedom and openness of the international economy, the level of attractiveness for foreign investment and the degree of realization of the potential of emerging markets. Rating name and year

Overall number of countries
Position number, Russia
Position number, China
Global Competitiveness Index, 2009-­‐2010
132
63
29
Enabling Trade
121
109
49

Index, 2009
World Competitiveness Scoreboard, 2009 57
49
20
Globalization Index, 2007
72
62
66
Foreign Direct
Investment Confidence Index, 2007
25
9
1
Global Services Location Index, 2009
50
33
2
KOF Index of Globalization, 2009
156
61
91
Index of Economic Freedom, 2009
179
146
132
Doing Business, 2010
183
120
89
The Best
Countries Business, 2009
for
127
103
63
Access Index, 2008
109
60
49
Market Potential Index for
26
9
2

Emerging Markets, 2009
Corruption Perceptions Index, 2008 180
147
72
E-­‐readiness Rankings, 2009
70
59
56
From the table we see that China has more attractive terms and conditions for the operation of both national and international...
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