Russian roulette

LIANG GUOMIN gazed down the rows of instant noodles and tinned food on the shelves of his supermarket in central Moscow.

'Investing in Russia is not easy. Police, customs and tax officials are slow and inefficient. They recognise China's economic achievements but in their heart remain arrogant toward us. And the workers are lazy and slow, not as hard-working as Chinese,' he said.

Mr Liang works for Tian Ke Long, the supermarket arm of Beijing Enterprises, a Hong Kong-listed company. It has more than 40 supermarkets in China, Macau and Canada, and has invested US$30 million in this one, with 30,000 square metres of retail space at an excellent site on the corner of Moscow's ring road and a main shopping street, Novy Arbat.

'Our market is the 50,000 to 60,000 Chinese in Moscow and local people. If business goes on as now, we should get our money back in three to four years,' he said.

Does he have to pay off the Mafia, as do many businesses in the city? 'This is a state project, the result of an agreement between the governments of China and Russia. Jiang Zemin knows about it. We have police outside, guards inside and guards at the hotel where we live,' he said.

Since the 1991 break-up of the Soviet Union, Russia has attracted a fraction of the foreign investment of China, about US$3 billion a year. This is due to political instability, a poor legal system, a falling currency and an unwelcoming bureaucracy.

The shelves of Mr Liang's supermarket are packed with towels, thermos flasks, colour televisions, tinned food and hundreds of other items that he imports from China and cannot, or will not, buy locally, despite the cost of transport and the greed and inefficiency of the Russian customs service.