Projects to create the first legal Chinese trade warehouses in Russia are having serious problems. The wholesale shoe complex Charoit that was established in November 2009 has lost almost two-thirds of its tenants because it could not compete with the markets, and a project of the Chinese company Jin Yuan for constructing a network of logistics complexes has been frozen.
The 8,000-square-meter Charoit shopping complex, of which 3,500 square meters are for trade while the rest is underground parking, storage and service space, opened in November 2009 in Vladykino. Its main activity is wholesale trade of shoes and connected goods from China. Investment in the opening of the complex amounted to approximately $2.5 million, said Michael Zhao. Partners had calculated that turnover of wholesale trade in the shopping center would be about 30 billion rubles per year (about $1 billion).
“After Cherkizovsky market was closed, Chinese entrepreneurs became interested in conducting legitimate trade,” said Anatoly Shchukin. According to the managing director of Charoit, Oleg Sumarokov, the wholesale price of a legal pair of summer shoes is 120 rubles to 150 rubles higher than the price of an illegal pair of shoes, at an average price of 720 rubles to 750 rubles.
Footwear and related goods clear customs all above board and the subtenants operate legally, said the management of the complex. In November, 34 out of the 54 pavilions were subleased, but now there are only 12 subtenants. “Explaining the behavior of Chinese entrepreneurs is simple: We want to sell at markets and not bear the costs of legal trade,” said Sumarokov. In addition, the Federal Migration Service takes a long time to process the documents to obtain permits for foreign labor — in four months, we have only managed to get six complete sets of documents.”
After visiting the complex, a Vedomosti correspondent saw that some of the remaining Chinese entrepreneurs are pessimistic about the future. “Things are going badly,” one of them said, declining to elaborate.
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