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A Zhejiang-based footwear manufacturer has announced the creation of a trade and investment zone in Russian Far East, the first such move by a privately-owned Chinese company.

The zone, with potential total investment reaching 2 billion yuan and located in Ussuriysk, an industrial city, will be established by Kangnai Group.

Construction of the 2-square-km zone began last August and should be completed by 2010, according to Zhou Jinmiao, a senior official of Kangnai, adding that the zone would invite all companies aiming to do business in Russia.

The move will open the door to more Chinese industries aiming to enter the Russian market, leading to strengthened trade and investment ties between the two countries.

The Ministry of Commerce disclosed no further details about the Ussuriysk zone, simply stating "China is considering setting up cooperation zones and encouraging enterprises to build plants in Russia".

According to ministry statistics, investment from China into Russia had topped US$1 billion across 700 projects by the end of last year.

To help the outward-looking strategies of Chinese enterprises, the government has previously established economic and trade cooperation zones in foreign countries such as Pakistan and Zambia.

The commerce ministry thus fosters the desire among domestic enterprises to develop similar zones overseas, which can emanate from a single company's initiative or can be a joint project taken on by a group of firms, playing key avenues in helping small and medium-sized Chinese enterprises tap into overseas investment opportunities.

(China Daily March 22, 2007)