The 10th investment conference "Expansion of Capital: From National Economies to a Transnational Economy" hosted by RBC's was held in Hong Kong on November 6-11, 2004. The business forum brought together around 200 businessmen and politicians from major Eurasian countries. "It is quite meaningful that the conference was only a month after an official visit of the Russian President to China, - Russian Deputy Prime Minister Alexander Zhukov emphasized. - In many ways the governments of the two states and businesses follow the same interests now. On the one hand, the Asian-Pacific countries are a priority for Russia's foreign policies. China is willing to invest around $12bln in the Russian economy. On the other hand, Hong Kong is a perfect launching pad for Russian companies that turn to international markets now."

The hosts of the conference intentionally chose Hong Kong. This major financial center is a great example for other countries in terms their ability to create a favorable business environment. Profit and wage taxes are low here, 16% and 15% respectively, the British civil law system and courts' independence are strictly observed here. In addition, the Hong Kong stock exchange creates extremely favorable conditions for companies willing to do IPOs. This is of immense importance for Russian businessmen, especially taking into consideration a high inflation rate in the country and on-going ruble strengthening. It is natural that Russian businesses have begun looking closer at Hong Kong. Indeed, the Bank of Moscow and Rosbank have conducted road shows of their bonds here recently. Such companies as Gazprom, NOMOS-Bank, Aeroflot, and MDM-Finance do business here. And it seems to be just the beginning.

General Director of the Moscow International Business Association Alexander Borisov was quoted as saying that the association possessed information on around 300 projects of 111 Russian companies with assets in 62 countries worldwide. "But in reality, this number is three-four times bigger, - Mr. Borisov said. - Owing to the positive economic situation over the last several years and free financial assets at hand, second- and even third-tier companies were getting more and more involved in the process of buying assets abroad."

Our companies are looking for not only attractive objects for investments abroad but also stability, convenient business infrastructure and economic freedom that they lack in their motherland. In the opinion of Russian Presidential Advisor Andrey Illarionov, economic freedom has been sagging in Russia lately. As a result, the GDP has been decreasing too. The only way this situation can be fixed is through minimizing state expenses, pursuing demographic openness policies, and doing away with the legal restriction of economic growth in Russia.

Chairman of the Russian Business Unions Coordination Council Alexander Shokhin proposed another way of recovering the economic situation in Russia. In his opinion, we should do something about "dizziness" from oil prices. "We expect this situation to continue and cover everything. Economic reforms can in fact stall. Why do something if everything is fine anyway," Mr. Shokhin asked rhetorically "In addition, it still has to be decided what a favorable foreign economic situation' means for us", he emphasized. "We can find ourselves in a situation, when even $80 per barrel would not guarantee us impressive economic growth. Moreover, it can be followed by a slump in production."

In general, other speakers sounded more optimistic. Chief Executive Officer of the Russian Pension Fund Gennady Batanov said that Russia had its own resources that could prompt GDP growth. He was quoted as saying that pension savings would reach almost 3bln RUB (about $105.3m) by the year 2005. If this trend maintains in the future, the fund will accumulate 25-30bln RUB (about $964.9m) over the first decade of pension reforms. This money could go to large-scale investment projects. These huge investment resources could drastically reshape relations between Russian and the foreign investment market, "The moment of truth will happen for foreign investors in the next three to five years. They will either take the risk and enter the Russian market, or the Russian economy will start developing mainly based on its own resources. And finding space on the market will be an extremely hard thing to do," Mr. Batanov warned foreigners.