Interview with Alexander Sokolov, Chief Legal Counsel of G2R Market, specialist in international contracts and government procurement. Work experience: 12 years, more than 300 completed contracts with Chinese suppliers totaling $450 million.

The Russian government procurement market with a volume of $110 billion per year attracts Chinese companies, but many are afraid to start. The reason is myths and misconceptions that spread in the business environment. We met with Alexander Sokolov to analyze the three most persistent myths and find out how things actually stand.

Myth #1: «Russian tenders are closed to foreigners, only insiders win»

— Alexander, this is the first thing we hear from Chinese companies: «Tenders in Russia are corruption, rigged deals, there’s no place for foreigners.» Is this true?

— This is the most popular myth, and it absolutely does not correspond to reality. Let’s analyze the facts.

First, Russian legislation on government procurement (44-FZ and 223-FZ) does not prohibit participation of foreign companies. Moreover, Russia is a member of the WTO and is obligated to ensure equal access to government procurement for companies from WTO member countries. China is a WTO member.

Second, statistics. According to data from the Accounts Chamber of the Russian Federation, in 2023-2024, about 30-40% of all government procurements in the categories «medical equipment,» «IT equipment,» «lighting equipment,» «furniture» were won by foreign suppliers. Of these, 70-80% are Chinese goods.

— But Chinese companies participate through Russian intermediaries, not directly?

— Yes, most work through intermediaries because it’s easier from a bureaucracy standpoint. But this is their choice, not a system limitation. A Chinese company can register an LLC in Russia and participate directly. There are no legislative prohibitions.

Moreover, there are examples of direct participation. Huawei (before sanctions) directly won tenders for network equipment. Mindray (medical equipment) has a Russian representative office and participates directly. This is not an exception, but a working model.

— Where does the myth about «rigged deals» come from then?

— Rigged tenders do indeed exist, but their share is no more than 10-15%. These are usually large infrastructure projects worth tens of billions of rubles, where the customer knows in advance who they want to work with. But 85-90% of tenders are open competitive procedures where whoever offers the best conditions wins.

The electronic auction system under 44-FZ leaves no room for arrangements whatsoever. Everything is anonymous until the last moment, the winner is determined automatically by the lowest price. The customer physically cannot influence the result.

— So can a Chinese company with a good price really win?

— Absolutely. Moreover, Chinese companies have an advantage: low production cost. If German equipment costs €100K, and similar Chinese equipment costs $60K, then the Chinese will win in 90% of cases. The customer doesn’t care where the goods are from, the main thing is compliance with requirements and price.

Our experience: out of 50 tenders in which Chinese clients participated through G2R Market in 2024, they won 23. Success rate of 46%. This is normal statistics. If the system were closed, the success rate would be 0%.

Myth #2: «Sanctions don’t allow you to work, you can’t transfer money, goods will be blocked at customs»

— The second myth is related to sanctions. Many Chinese companies are afraid that due to sanctions against Russia, it’s impossible to receive payment, goods will get stuck at customs, banks will block accounts. How true is this?

— Sanctions have indeed complicated life, but they haven’t made trade impossible. Let’s divide this into three questions: payments, customs, goods.

Payments. Yes, 98% of Chinese banks stopped accepting direct transfers from Russia since August 2024. But this doesn’t mean money isn’t moving. There are working schemes:

The first is settlements in yuan through the CIPS system (Chinese analogue of SWIFT). Russian banks with yuan clearing (Sberbank, VTB, Gazprombank) send yuan directly to Chinese banks, bypassing the dollar and Western correspondents. The share of yuan in Russian-Chinese trade has grown to 70%. This is the new normal.

The second is payments through third countries (Kazakhstan, UAE, Turkey). Legal, if the transaction is properly formalized. Commission is higher (2-4% instead of 0.5-1%), but it works.

The third is barter schemes. Russia supplies raw materials (timber, metals), China supplies finished products. Counter-supplies without money transfers.

In 2024, we completed contracts for $45 million. All payments went through. There were delays (sometimes 2-3 weeks instead of one week), but not a single payment was lost.

— And what about customs? Are goods being blocked?

— Customs operates in normal mode. Chinese goods pass through without problems if documents are in order. You need:

  • Certificates of conformity (TR CU declaration or quality certificate)
  • Invoice, packing list, contract
  • Correct HS code

US and EU sanctions do not prohibit China from trading with Russia. China is an independent country, it decides for itself who to trade with. The only restriction is dual-use technologies (military, high-tech chips, etc.). But ordinary commercial goods (medical equipment, furniture, construction materials, electronics) pass through freely.

— Were there cases of customs delays?

— Delays happen, but not because of sanctions, but due to standard reasons: inspection (random sampling of 10-30% of cargo), document verification, disputes over HS codes. This is normal customs practice in any country.

Advice: work with an experienced customs broker, prepare documents in advance, build in time buffer (+2 weeks to the planned delivery time). Then delays won’t become a problem.

— And which goods are under sanctions?

— Goods that can be used for military purposes are under sanctions: high-tech chips, specialized software, equipment for the oil and gas industry (partially), aircraft components. But these are narrow categories.

95% of goods that participate in government procurement (furniture, lighting fixtures, medical equipment, construction materials, consumer-level IT equipment) are not subject to sanctions. Chinese companies can freely supply them.

Myth #3: «Without experience working in Russia and knowledge of the language, it’s impossible to win a tender»

— The third myth: «We don’t know Russian, we don’t understand Russian bureaucracy, we have no experience — we won’t be able to compete with Russian companies.» Is this true?

— Partially true, partially myth. Let’s analyze point by point.

Language. Yes, all paperwork in Russia is in Russian. Tender documentation, contracts, correspondence with the customer — everything is in Russian. Without a Russian-speaking employee or translator, it’s really difficult.

But it’s solvable. Options:

  • Hire a Russian-speaking manager in China (salary $1,000-2,000/month, there are many such specialists in Harbin, Dalian, border cities).
  • Work through a Russian partner-intermediary (G2R Market, analogues). The intermediary takes on all communication, document flow, participation in tenders. Commission 5-15%, but it pays off with speed and reliability.
  • Use machine translation + verification by a native speaker. Modern translators (Google, DeepL, Yandex) provide acceptable quality for routine documents.

Knowledge of bureaucracy. The Russian government procurement system is complex. 44-FZ is 120 pages of law, plus bylaws, instructions, regulations. To figure it out from scratch takes 2-3 months of intensive study.

But you don’t have to become an expert. It’s enough to understand the basic principles (what NMCK is, how an auction works, what documents are needed), and delegate the details to specialists. Either an intermediary or a hired consultant ($50-100/hour).

Our experience: 80% of Chinese clients we work with don’t delve into the details of Russian legislation at all. They manufacture goods, we do everything else. This is division of labor, and it’s effective.

Experience working in Russia. Some tenders require experience fulfilling similar contracts. For example: «The supplier must have at least 2 contracts for at least 50 million rubles over the past 3 years.»

This is indeed a barrier for newcomers. But:

  • Not all tenders require experience. About 40-50% of procurements don’t have such requirements.
  • You can provide experience working in other countries. If a company has supplied equipment to Malaysia, Thailand, India — that’s also experience. Translate contracts into Russian, notarize, attach to the application.
  • Working through an intermediary, their experience is used. G2R Market has completed 300+ contracts in 7 years of work. This experience is sufficient for participating in any tenders.

— So lack of experience is not a death sentence?

— Absolutely right. Yes, experience helps. A company that has already won 10 tenders acts more confidently and faster than a newcomer. But newcomers also win.

Example: in 2023, a company from Guangzhou, a packaging equipment manufacturer, approached us. They had not a single contract in Russia. We helped prepare the application, provided our experience, and they won a tender for 500 million rubles ($5.5 million). First contract in Russia, immediately for such an amount. Now this company is our regular client, has already completed 4 contracts.

The main thing is quality goods, competitive price, proper document preparation. Experience is important, but not critical.

Bonus: A Few More Myths Briefly

— Alexander, are there any other common misconceptions?

— Yes, several.

Myth 4: «Russian customers don’t trust Chinese goods, they prefer European or Russian.»

Reality: After 2022, Russian customers massively reoriented to Chinese goods because European goods are unavailable, and Russian goods are more expensive or non-existent. Chinese goods have taken 30-40% of the government procurement market. There is no distrust if the goods are certified and meet requirements.

Myth 5: «If you won a tender but couldn’t fulfill the contract — you’ll just return the money and that’s it.»

Reality: NO. Contract failure leads to inclusion in the Register of Unscrupulous Suppliers (RUS) for 2 years. This means a ban on participating in any government procurement. Plus penalties, forfeitures, loss of contract security. This is very serious. Therefore, only participate in those tenders you can definitely fulfill.

Myth 6: «You need to pay bribes to win a tender.»

Reality: Corruption in government procurement exists, as in any country. But the electronic auction system under 44-FZ is maximally transparent and automated. The customer doesn’t know who is participating until the auction ends. The winner is determined by an algorithm. Bribes won’t help here.

In procurements under 223-FZ (state corporations), preferences for «insiders» are possible, but these aren’t bribes, but long-term relationships. If you’ve fulfilled a contract twice with quality and on time, the customer will work with you again. This is normal business practice.

Conclusion: Reality Without Myths

— Alexander, let’s summarize. What would you say to a Chinese company that doubts whether it’s worth entering the Russian government procurement market?

— The Russian market is open, transparent (in most cases), and profitable for Chinese companies. Myths about being closed, sanctions, and insurmountable barriers are excuses for those who don’t want to figure things out.

The reality is:

  • The system works, foreigners win 30-40% of tenders in a number of categories
  • Sanctions have complicated payments, but haven’t made them impossible
  • Language and bureaucratic barriers are solved by hiring a specialist or working through an intermediary
  • Experience is not mandatory, the main thing is quality goods and proper preparation

In 2024, through G2R Market, Chinese companies won tenders totaling $45 million. These are real contracts, real money, real deliveries. If the system didn’t work, these numbers wouldn’t exist.

My advice: start small. Find a reliable Russian partner, try participating in 3-5 small tenders (1-5 million rubles). Gain experience, understand the mechanics, assess profitability. If the result is satisfactory — scale up.

Don’t listen to myths. Verify information. Take action.

G2R Market — professional guide for Chinese companies to the Russian government procurement market. Services: tender search, document preparation, participation in bidding, contract support, logistics. Operating since 2017, completed 300+ contracts for $450 million.

Contacts: info@g2r.market | +7 (495) 123-45-67 | www.g2r.market