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Press review: UK nixes Hong Kong extradition treaty and Russia to profit from US-China row

Top stories in the Russian press on Tuesday, July 21


Izvestia: What the future holds for UK-China relations

On July 20, the United Kingdom suspended its extradition treaty with Hong Kong in response to China’s new national security law for the former British colony. However, developments in Hong Kong are not the only reason why the UK is condemning China, Izvestia writes.

Back in 2015, when Chinese leader Xi Jinping brought multibillion deal offers to London, many in the United Kingdom started talking about a dawning golden age in relations between the two countries. London’s decision to withdraw from the European Union strengthened China’s position as the UK’s trade partner. The two countries’ political views certainly differed, but Britain seemed far more moderate than the US. However, the current events in Hong Kong turned the UK into a staunch critic of China.

Britain keeps facing major pressure from overseas. Proof of this is London’s recent move to drop cooperation with China’s tech giant, Huawei. Washington, who has been encouraging its allies to reject Chinese technology, welcomed London’s change of heart though the British will now have to bear the excessive expenses.

According to Aidan Hehir, a British expert on international relations, London’s approach is the result of their desire to maintain good relations with the United States.

Vasily Kashin, an expert at the Russian Academy of Sciences’ Institute for Far Eastern Studies, in turn, pointed to the United Kingdom’s importance for Chinese companies. In his view, Beijing will handle the matter carefully.

"The Chinese may introduce retaliatory measures against those British politicians who are the harshest critics of Beijing, just like it was with some Americans. However, they won’t go beyond this symbolic response," the expert predicted. "Nevertheless, much will depend on what London will do next," Kashin noted.


Nezavisimaya Gazeta: Russian economy can benefit from US-China cold war

The United States seeks to provide a theoretical basis for its standoff with China who is trying to supplant the US as a global leader. Experts interviewed by Nezavisimaya Gazeta believe that pressure on China will keep mounting so Russia has a chance to bolster ties with its eastern neighbor.

According to Alexei Maslov, a Moscow-based China scholar, Beijing has taken advantage of the global economy concept. "And now the United States’ goal is to change that concept so that China can’t play a key role in the new world order. The key goal is to deprive China of its technological leadership, hinder the implementation of the Made in China 2025 program and damage the One Belt One Road project, driving countries to abandon Chinese investment," the expert pointed out.

As Washington is cranking up pressure on Beijing, Russia now has the opportunity to strengthen economic ties with the Asian powerhouse, Maslov went on to say. "We have strong potential for hydrocarbon trade, as well as for agricultural trade," he noted. "There are also good prospects for the creation of joint research laboratories as American investors leave China and research and educational exchanges decline between the US and China. Russia can also set up universities in China, while the US cuts support for Chinese students in its universities," the expert elaborated.

For his part, President of the Russian-Asian Union of Industrialists and Entrepreneurs Vitaly Mankevich told the newspaper that the showdown between the United States and China would hardly result in the creation of another system of globalization. "We are more likely to see two systems of global domination as countries split into pro-Chinese and pro-American ones, like it was during the Cold War with the Soviet Union," the expert emphasized. "Russia and European countries, as well as Africa, may become the main battleground where interests will collide," he added.


Media: Putin replaces embattled Khabarovsk governor with Liberal Democratic Party colleague

Russian President Vladimir Putin has named State Duma member Mikhail Degtyarev, who represents the Liberal Democratic Party (LDPR), as acting Governor of the Khabarovsk Region. His predecessor Sergei Furgal, charged with masterminding murder-for-hire killings, has been sacked over a loss of trust, Vedomosti writes.

Furgal, an LDPR member, won the gubernatorial election in the Khabarovsk region in 2018, defeating the then incumbent Governor Vyacheslav Shport. Last year, the LDPR clinched first place in regional elections, while the United Russia party managed to secure only two seats.

According to political scientist Alexander Pozhalov, Degtyarev’s appointment means that "the Kremlin has decided against fighting with one of the major parliamentary opposition parties ahead of a parliamentary election, which won’t be an easy one for the federal government, but it will try to use the LDPR as a means of communication with the region’s disaffected people. However, Degtyarev will come up against many difficulties, Pozhalov noted. "He appears to have been chosen by Moscow, while Furgal was initially a protest candidate in the 2018 election and then was elected by the people." Still, Degtyarev’s nomination "seems to be the most logical way out of the situation in the Kremlin’s view," the expert added.

Parliamentary members who represent the Khabarovsk Region have welcomed Degtyarev’s nomination. The experience he gained in the State Duma will help him solve the problems that people in the region are facing, lawmaker Kirill Cherkasov told Izvestia.

"From a political standpoint, Mikhail Degtyarev’s appointment as acting governor is the right decision since there is no risk for the federal government," political scientist Konstantin Kalachev said. The LDPR will now be entirely responsible for the situation in the region, he emphasized.


Izvestia: International flights expected to resume from six Russian cities

Russian authorities plan to resume international flights only from Moscow, St. Petersburg, Rostov-on-Don, Yekaterinburg, Novosibirsk and Vladivostok for now, Izvestia wrote, citing a draft document on the restoration of international air links, which Federal Air Transport Agency chief Alexander Neradko submitted to the government.

"Today, all international airports are ready to operate global flights. However, Rospotrebnadzor [the Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing] believes it would be right to limit their number in order to reduce the risk of the coronavirus spreading," a Russian airport holding spokesman pointed out. He added that a major airport had been chosen in every macro-region. According to the official, all of Moscow’s three key airports (Sheremetyevo, Domodedovo and Vnukovo) will be allowed to operate international flights so that the interests of major air carriers based in the city’s airports are respected.

According to the newspaper’s source, once the second phase of restoring international air services begins, the sanitary watchdog will continue to keep an eye on the epidemiological situation. Every two weeks, the watchdog, the Federal Air Transport Agency and the Foreign Ministry will compile a list of countries to where flights could be permitted from any of Russia’s international airports.

Meanwhile, the Federal Air Transport Agency rejected the newspaper’s request to comment on the resumption of international flights. The Transport Ministry pointed out that the issue was under consideration and all decisions would be announced in due time.

On July 8, the sanitary watchdog said that at first, air links could be restored with China, Mongolia, Vietnam, Sri Lanka, the United Kingdom, Germany, Italy, Finland, Norway, Denmark, the Netherlands, Hungary and Poland. However, the European Union is not ready to open its borders to Russians yet.


Media: Russian Central Bank poised for another key rate cut

Russia’s Central Bank will cut its key rate at a meeting on July 24, said analysts interviewed by Rossiyskaya Gazeta. This move will lead to a decline in loan and deposit rates. Meanwhile, nearly one-third of Russian savers are mulling over withdrawing their money if rates keep falling, Vedomosti wrote.

A downturn in Russia’s economy justifies active measures to ease monetary policy, Sovcombank Chief Economist Kirill Sokolov said. "Overcoming the negative consequences of the coronavirus pandemic is currently the main goal of the Russian government and the Central Bank. A rate cut will make money cheaper in the economy, stimulating investor and consumer demand," the monetary guru pointed out.

Key rate cuts always reduce the cost of loans and deposits, the main banking products, Chief Analyst at BCS Premier Anton Pokatovich noted. Meanwhile, 30% of Russians are ready to pull their money out of banks if deposit rates continue to decline, indicates a poll conducted by Rosgosstrakh Bank and the National Financial Research Agency (NAFI).

Financial advisor Ivan Kapustyansky is confident that the outflow of deposit holders will continue. "If the key interest rate is reduced further, then overall market profitability will drop, as well as that of federal loan bonds," he elaborated. "Federal loan bonds are the most similar to deposits. Few people will dare to use riskier financial tools," he added.

Savers began to shift to the stock market over a year ago, Chief of Personal Brokerage Service at BCS Premier Sergei Kuchin noted, adding that it was a long-term trend.


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