Russian Economic Reform

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Moscow, London and Shanghai “money” !

Published on November 09 2014
Posted by: jeff

In the first week of November I conducted an emailed survey of Russian (mainly Moscow) “educated middle class” attitudes to (mainly) financial issues in Russia and attitudes to Russia’s financial relations with China, the US, Europe, and the UK. Most of the over 1,000 people to whom I sent the survey were my LinkedIn “connections”. (I cast the net quite wide even though I suspected that many of my “connections” would have little interest in such financial matters.)

I wanted to get “financial expert” Russian feedback so, for the purposes of this article,  I subsequently pruned the data to remove all non-Russian respondents and also remove any who did not indicate that “about 50% or more” of their work time involved “thinking about financial issues”.

This left me with a relatively small, but solid, set of 42 respondents — the majority of whom worked in the “banking/financial” sector. The remainder worked in the “advisory”, “academic” or “government” spheres.

In designing some of the questions in the survey, I had in mind the “sanctions” imposed on Russia because of the Ukraine issue (and the possibility of more) but did not want to directly mention this issue because of its (for most Russians) very emotional character.

A massive majority, 39 of the 42 respondents, were in favour of Russia having “closer financial relations with China”. Only 6 indicated that they would not put deposits (work or personal) in Chinese banks if these banks operated in Russia in a similar way to Citibank. The attitude to holding the Chinese renminbi (RMB) was more mixed, perhaps reflecting a lack of knowledge about it compared to the $US and the Euro.

18 of the 42 respondents indicated that China was the country that Russia should have “the closest financial relations”, while 16 indicated continental Europe. Only 4 indicated the USA, and a tiny 2 indicated the UK.

In fact, London as a financial center was perceived poorly, with only 8 indicating that its activities “help Russia to become a better place to live”. Of the 42 respondents, 19 indicated that London “hurt” Russia. (What I had in mind with this question was the tendency of the UK to give safe-haven status to any number of Russian “crooks” such as Andrei Borodin of Bank Moscow fame, as well as the fact that “honest” Russians also have assets there.)

These numbers do not mean, however, that the respondents thought Russia should strengthen its financial relations with China at the total expense of “Western countries”. Even those who wanted closer financial relations with China, on the whole did not want to see a downgrade of financial relations with the West (thanks, mainly, to the favourable view of continental Europe).

I suspect that if I had conducted this survey before the events in the Ukraine, the results would have been quite different. As I indicated in the previous article on the site (Russia and China: what sort of “relationship”?  See:, Russia had been very tardy is attempting take advantage of the great developments in the Chinese economy. Things are now changing, although Russian knowledge of China remains very patchy (and, this is certainly the case in comparison to Australia).

In part this relative lack of knowledge reflects the fact that most “international” coverage of financial events in China is written in English. Nearly half of the respondents in my survey indicated that they get most of their knowledge about China from Russian language sources.

The final question of note in the survey for the purposes of this article concerned Moscow as an “international financial center”. The results were a little surprising, and will be included in an article which I am writing on this topic for the “Baltic Rim Economies Review” (to be published in December 2014).