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Chinese retailers may resume business in Moscow

(China Daily)
Updated: 2007-02-13 08:55

Chineseretailers in Moscow have been given a reprieve from a ban on their businesses, but many wonder how much damage has already been done and how long it will take to recover.

A regulation published by the Russian government in December said foreigners will no longer be allowed to sell alcohol and medicine in Russia from January, and from April 1 would be banned from any type of retail sales in Russian markets.

The regulation has now been abolished in Moscow, from yesterday, according to reports from Chinese Business News.

An official from the municipal government told local reporters that foreign retailers could return to markets on February 12 because the first phase of the ban had damaged retail markets.

But Chinese sellers have already felt the impact.

Many Chinese retailers had begun to sell their products at reduced prices in the weeks leading up to the New Year as they prepared to move home before new rules were fully implemented. A large market in Moscow, previously dominated by Chinese merchants, was nearly closed.

In is unclear how long it will take for Chinese sellers to recover in Moscow and whether other regions will follow suit, the reports said.

Rules banning foreign retailers, approved by Russian President Vladimir Putin, were implemented to encourage Russians to take up jobs in the sector and help fight criminal groups, the government said at the time.

The result was a significant price increase in meat and vegetables and a 70 percent vacancy rate in the Moscow market.

When thousands of Chinese and other foreign retailers and stallholders left, there were not enough local people interested in taking their place. A stall once valued at $20,000 cannot now be sold for $2,000, news reports said.

Nearly 60 percent Russian citizens said they did not benefit from the ban as it affected products, prices and services.