Analysis of the sectoral structure of foreign direct investment between the Russian federation and the People’s Republic of China

The study analyzes the transformation of the sectoral structure of foreign direct investment between Russia and China from 2014 to 2024 in the context of the «Turning to the East» policy and the changing dynamics of the global geopolitical situation. Using a comprehensive methodological approach, it carries out statistical analysis of the dynamic series of investment flows, structural analysis of the sectoral distribution of investment and qualitative analysis of institutional changes in investment cooperation. The empirical base consists of official statistical data, reports from expert analysis centres and materials provided by relevant government agencies in both countries. The results reveal the following dramatic shifts in the structure of Chinese FDI in the Russian economy: the shares of the extractive and agricultural sectors grew from $796.0 to $6215.3 million and from $2099.7 to $3256.4 million, respectively, while the share of manufacturing fell from 30% to 12.2%. A three-tier investment structure has emerged, dominated by the natural resources sector (over 40%). There has been a 54-fold increase in investment in high-tech sectors, although their share remains modest. The paper argues that the structural changes in investment cooperation were caused, first, by the Western sanctions against Russia after 2014, second, by China’s growing need for Russian energy resources and raw materials and, third, by the desire of Chinese investors to minimize risks by working with influential Russian elites. The cautious attitude of Chinese investors towards Russia’s high-tech sectors is explained by the risks of secondary sanctions, the technological gap between the countries and institutional barriers in Russia. Key obstacles include weak transport and logistics infrastructure in the Russian Far East, an opaque business climate, and the two countries’ diverging investment priorities. A new interaction model is emerging, prioritizing raw materials, agribusiness, and state-backed projects, while manufacturing is becoming less attractive.