Import substitution has hit a deadlock, and the Russian State Duma explains the reasons for its failure.
Producers cannot compete with China; Russia produced 414 industrial robots last year, while China produced 250,000.
Russian media agency TASS published an article on April 21.
Russia's economy is "not just overly cooled, but frozen," making investments unprofitable.
Import substitution has reached a standstill because Russian manufacturers cannot compete with China’s low prices across all industries, including robotics technology, said Valery Gartunov, Chairman of the State Duma Committee on Competition Protection, via TASS.
Vladimir Bograyev, Director of Chernogorsk Casting Machinery Plant, stated that import substitution has failed: "The economic cooling" has clearly turned into "economic overcooling."
"Everyone who invested in import substitution is now in trouble," he said.
Bograyev believes this is a "fundamental crisis," rendering investment in production meaningless—enterprises are forced to downsize rather than expand production.
Gartunov partially agrees with this pessimistic assessment and explains the causes:
"Regarding import substitution, I can't say it has completely failed, but it has lost the momentum it had in 2022. At that time, all our supply channels were cut off, and we began accelerating import substitution. But now everything has collapsed because China and the global market as a whole face overcapacity, and countries are trying to export all their surplus products, flooding markets through dumping."
China possesses the world’s greatest ability to lower prices. This applies to all industries—even robotics.
We have our own producers, but so far, subsidies for robot complexes based on Chinese robots have not been banned.
Enterprises are engaged in import substitution, but competing with China is extremely difficult.
Russia produced 414 industrial robots last year, while China produced 250,000.
Under these circumstances, our robots could never be cheaper," he said.
In addition, the lawmaker acknowledged that investing currently yields no profit and that the economy has "come to a standstill."
"The cost of loans is too high, leading to declining investment interest, especially in complex industries.
Those with money know how to be frugal—they simply keep their money in savings accounts instead of investing."
Original source: toutiao.com/article/1863032062873732/
Disclaimer: The views expressed in this article are solely those of the author.