russian Businesses Are Fleeing to China in Droves

Companies from russia’s border regions have begun actively re-registering and relocating their operations “across the river” – to the PRC. The main reasons are high fiscal pressure, a labor shortage, and the unpredictability of russia’s domestic and foreign policies.

At the moment, more than 3,800 organizations with russian participation and roots are operating in China. These are primarily importers, manufacturers of electronics, equipment, and consumer goods, as well as representatives of the light industry. In China, unlike in russia, the VAT rate on most goods and services is 13% (in russia – 22%), and for small businesses, the rate can be as low as 3%. Add to this favorable Chinese loans at 3% per annum and government grants for capital expenditures.

Even businesses that are part of russia’s powerful propaganda machine could not withstand the strain of operating in their “home” country. We are referring to book printing and the printing industry in general.

Due to sanctions pressure, russian printing houses lack inks, varnishes, and specific components, as well as modern equipment and spare parts. At the same time, the Chinese side offers all of this in abundance. In other words, high-tech orders for modern printing are shifting to China, while russia continues on its path toward becoming a raw materials appendage.

From January through July 2026, the volume of printing activity in russia amounted to only 92.8% of the previous year’s level, while the production of paper and paper products also declined by 8%. The largest player in the russian market, the “prosveshchenie” publishing house, has already reduced its orders from domestic printing houses by 25–30% this year. As a result of all these developments, the rf’s’ printing industry is reducing its workforce by approximately 30% this year.

These developments point to a weakening of russia’s economy and a decline in its attractiveness for domestic businesses. If this trend continues, an increasing number of russian companies may seek better conditions outside russia, which will only intensify the country’s economic dependence on China and contribute to a further loss of domestic manufacturing capacity.