Li Wencong (ICBC): We Consider Russia Our Strategic Partner

Russian and Chinese economies are becoming more and more interrelated. Economic cooperation between two countries covers a large variety of spheres, including banking. The President of Bank ICBC (JSC) (the Russian subsidiary of Industrial and Commercial Bank of China Ltd.) Li Wencong shares his views on the Russian investment climate, competition on the market and unveils the ICBC’s further plans.

Russian and Chinese economies are becoming more and more interrelated. Economic cooperation between two countries covers a large variety of spheres, including banking. The President of Bank ICBC (JSC) (the Russian subsidiary of Industrial and Commercial Bank of China Ltd.) Li Wencong shares his views on the Russian investment climate, competition on the market and unveils the ICBC’s further plans.

Your bank supports Russian businessmen who seek representation on Chinese market and vice versa. How popular is this service in Russia?

Both Russian and Chinese markets are gaining popularity, so more and more investors go across the border searching for opportunities. The trade volume is constantly growing. We opened our subsidiary 9 years ago and now we have become number 1 Chinese bank here in Russia. Moreover, we placed 88th among all Russian banks. This indicates that there is certain demand for our services.

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Can one call Russian investment climate favorable?

Russian investment climate is definitely favorable. The economies of our countries are interrelated, so Russian market looks very attractive to us. Any business is interested in making profits. I might agree that Russian market is a bit risky, but I’d like to put it differently. Risk, or uncertainty owing a lot to information asymmetry. We notice lack of knowledge and understanding of Chinese financial and business culture on the Russian part. The same can be said about Chinese companies operating in Russia. We need to learn more about market regulation in our countries as well as industry specifics.

The number of foreign banks operating in Russia is quite large. Do you feel any competition on their part?

I would say that Russian market is enormous and our part (ICBC’s) is quite small. There is a lot of room for us to grow partly because of the fact that taxes on the Russian market are quite low compared to European developed markets.

I also have to admit that now we do not offer as many services as we could because we only have the license for wholesale business. This year we will apply for retail, security and precious metals licenses. Right now we only operate in Moscow but next month we are opening our office in Saint Petersburg – our network is growing. The strategy for ICBC group in the Russian market is very clear. We consider Russia our strategic important market and are planning to invest more into Russian economy.

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What measures should be taken to bring Russia-China relations to the next level?

The first thing we should work on is the improvement of communication and mutual understanding. If we are talking about specific items, I would say – the standards. We need to elaborate common standards for both countries in various spheres.

Would you agree that the Silk Road Economic Belt benefits both Russia and China?

Of course the Silk Road Economic Belt benefits both China and Russia. Moreover, it is profitable for the region as a whole. It will involve all countries, economies and people and will be favorable for everybody. I do not consider Silk Road Economic Belt a trigger for competition, but a source for more opportunities. It will lead to bigger interaction between our economies and countries. We will get better communication and collaboration in all the spheres.

Interviewed by Maria Smekalova, RIAC website editor