1. Russia (Compared with China)

2. Group Members Aaron Sakulich Ryan Schultz Craig Schroeder

3. General Facts RussiaChina LocationEastern Europe, Northern Asia Central Asia CapitalMoscowBeijing Population143 Million1.3 Billion CurrencyRussian RubleChinese Yuan

4. Russia: Geography

5. China: Geography

6. Economic Comparison RussiaChina Growth Rate7.3%9.1% Unemployment8.5%10.1% Inflation Rate13.7%1.2% Per Capita Income$8,900$5,000 Trade Balance$59 Billion$39 Billion Trade Bal. Ratio2.1716.14 GDP Production$1.282 Trillion$6.14 Trillion Deficit$10 Billion$319 Billion Debt153.5 Billion197.8 Billion Debt Ratio138.220.17 Deficit Ratio32.1030.1

7. Labor Composition RussiaChina

8. Events in Russia Yukos is Russia’s largest oil exporter Putin (Russian Government) targeted Yukos Believed to be a move to destroy its CEO, Mikhail Khodorkovsky.

9. What Happened Targeted by Russian Government Charged $27.5 billion in “back taxes” Important assets auctioned off at low prices indirectly to the government – Sold Yuganskneftegaz – Produced 60 percent of Yukos' oil

10. Current Status Filed Bankruptcy in Russia – Tried to prevent sale of assets – Not protected by the Russian Courts Filed Bankruptcy in Houston, Texas – Judge dismissed the case Yukos sues for over $20 billion in violations of bankruptcy stay

11. Economic Warnings U.N. economists warned Russia to watch their pursuit of this issue. – They say it will drive away foreign investment and hurt the country’s economy. When a country’s property rights can easily be challenged by the government, international investors react very badly.

12. Economic Warnings Russia’s economy is very vulnerable because it relies heavily on gas and oil. The Yukos affair is not going to encourage an internationally competitive industry. Until the legal outcome of the Yukos affair is announced, investors may be apprehensive.

13. Symptoms of Problems Yukos made up 1/5 of the countries main RTS stock index by capitalization In recent months the RTS has lost about 1/3 of its value. Because of the affair many are scared to trust banks, 10 percent of depositors of each credit organization declined banking services.

14. Economic Outlook GDP – 7.3% higher in the first 5 months of 2004 compared to 2003 – Expected growth to hit 10% in 2006 Domestic consumption is rising steadily

15. References 1. CIA World Factbook – China http://www.cia.gov/cia/publications/factbook/ 2. CIA World Factbook – Russia http://www.cia.gov/cia/publications/factbook/ 3. Countrywatch – China http://www.countrywatch.com/ 4. Countrywatch – Russia http://www.countrywatch.com/ 5. Herald Tribune. http://www.iht.com/bin/pring.php?file=528051.html 6. Putin.ru. http://putinru.com/new/item/26633.html 7. Access News. “UN Warns Yukos Affair Could Hurt Russian Economy.” http://www.axcessnews.com/business_072204.shtml 8. Mosnews.com. “BP Chief Calls Oil Company’s Experience in Russia ‘Positive’” http://www.mosnews.com/money/2005/02/24/bppositive.shtml 9. The Mercury News, “Judge mulls Yukos bankruptcy dismissal.” http://www.mercurynews.com/mld/mercurynews/business/10981740.htm?1c 10. Yukos homepage. http://www.yukos.com/ 11. New Times. “Will back taxes ruin Yukos?” http://www.newtimes.ru/eng/detail.asp?art_id=1206