Media: Where China is headed under Xi Jinping
The 20th National Congress of the Communist Party of China has begun in Beijing. It will determine the priorities for the country's future amid the growing power of President Xi Jinping. Speaking at the opening of the congress, the Chinese leader, who is expected to be reelected for a third term in the coming days, outlined the challenges facing China’s global leadership, Kommersant writes.
"Comrade Xi’s address to the party congress showed that it’s crucial for him to move China even closer to the center of global politics, ensuring the country’s direct participation in the development of new rules of global governance. Xi’s main foreign policy strategy - the concept of a singular ‘destiny for mankind’ - is aimed at rallying not only the Asian region but also countries around the world," Deputy Director of the Russian Academy of Sciences’ Institute of World Economy and International Relations Alexander Lomanov pointed out. Xi’s continued rule provides Russia with an opportunity to forecast the development of its ties with China for years to come, the expert noted.
"Xi Jinping, who is going to stay in power, is far from being a war hawk as far as we are concerned. But as for China’s relations with the US, it will be important to see who replaces Chinese Prime Minister Li Keqiang, who fully determined the country’s economic policy. It will make clear whether Beijing will keep trying to improve relations with Washington or if a confrontation is inevitable," Director of Moscow State University’s Institute of Asian and African Studies Alexey Maslov told Vedomosti.
Experts agree that the party congress is unlikely to mention Russia in its documents, while it may reproach the United States for waging a new Cold War, as evidenced by such instruments as NATO and AUKUS.
Russia and Central Asian nations are going through another partnership test. The countries confirmed their willingness to boost relations at a meeting in Kazakhstan’s Astana. Ideas of creating new trans-Eurasian corridors and restoring a joint regional energy system were the most noteworthy, Nezavisimaya Gazeta writes.
After the road to Europe closed to Russia, Moscow turned to Central Asia. "It had to happen sooner or later <...> There has long been an objective need in the world to restructure all geo-economic ties and configurations, which is what is happening today," Leading Researcher with the Institute for International Research at Moscow State Institute of International Relations Alexander Knyazev noted. According to him, Russia’s "pivot to the East" cannot be just about selling hydrocarbons to China and purchasing Chinese goods. External ties should be diversified because apart from the East, there is also the South, which includes Central Asia.
This is the region where Russia has not completely realized its potential and where there is room for growth. Knyazev emphasized that cooperation between Central Asian countries and Russia could be bolstered through the development of communications, which could consolidate the region and unite it with Russia.
Director of the Applicata center for strategic solutions Kubatbek Rakhimov believes that Central Asia is set for a reboot, with new opportunities emerging, economic projects will gain momentum and investments will flow in. "It is high time to turn to the Commonwealth [of Independent States] and infuse these projects with real investment and give them real strength," he stressed.
Turkish President Recep Tayyip Erdogan has handed down instructions to explore the issue of setting up an international gas hub in the country. The need to create a hub in Turkey was initially highlighted by Russian President Vladimir Putin. According to Erdogan, work to establish the hub should begin without delay, Vedomosti writes.
Russia currently supplies gas to Turkey across the Black Sea through the TurkStream and the Blue Stream pipelines. TurkStream remains one of two operational routes for the export of Russian gas to Europe.
National Energy Security Fund Deputy Director Alexey Grivach points out that for Russia, the implementation of the Turkish gas hub project is one possible option to redirect gas flows via new routes. According to him, it’s possible to launch the hub without building additional infrastructure because TurkStream and Blue Stream have spare capacities. "The capacity may be increased later, as infrastructure expands in the European Union," the expert explained.
Deputy Director General of the National Energy Institute Alexander Frolov estimates that the first stage of infrastructure construction aimed at creating a gas hub in Turkey - that is, the building of two more threads of TurkStream - will take two to three years.
Meanwhile, experts have emphasized that the project may face "significant political obstacles." Frolov believes that resistance from the European Commission is to be expected. Special Advisor on Sanctions Issues at the Pen & Paper bar association Kira Vinokurova, notes that the provision of equipment and technologies may be restricted for the project. However, in her view, if the EU’s energy substitution policy fails, no restrictions will be imposed on the project.
Russia won’t export oil to countries that introduce a price cap, President Vladimir Putin stated. Meanwhile, US Secretary of the Treasury Janet Yellen suggested imposing a price cap on Russian oil at $60 per barrel, which would reduce Russia’s oil revenues without impeding profitable production and reducing market supply. Not only is the initiative aimed at limiting Russia’s revenues but it is also in line with the United States’ interests as an oil market player, Rossiyskaya Gazeta writes.
Russia’s 2023 budget has an average annual price for Urals crude at $70.1, Kirill Rodionov from the Institute for the Development of Technologies in the Fuel and Energy Complex explained. If there is a $60 price cap, the government will lose additional revenues, the expert said.
The move to introduce a price cap will complicate Russia’s commodity trade. Many countries in the Asia-Pacific region depend on financial institutions in the US, Europe and Japan, and will have to follow the new conditions as well. Over 90% of the maritime cargo insurance market is controlled by European companies that won’t insure oil purchased at prices above the cap, Deputy Head of Management Consulting Practice at the Delovoy Profil group Alexandra Shnipova noted. Consequently, tanker shipments of Russian oil will rise in price.
As for US interests, the $60 level is believed to be the lowest comfortable price for shale oil traders. It means that the US doesn’t want to create a competitor for its own exports.
Meanwhile, Russia has braced for a future EU embargo and a price cap. Alfa Capital analyst Yulia Melnikova points out that Russian companies have redirected ample sales volumes to the Indian, Chinese and Turkish markets.
Global currency reserves are falling at an unprecedented rate. Central banks in a number of countries are spending huge sums to support national currencies. This is partly because of currency fluctuations: the US dollar has appreciated this year to a 20-year high against other reserve currencies, such as the euro and the yen. But there is another reason: due to the growing recession, supply chain disruptions and high inflation, central banks have had to actively spend reserves to support the economy and protect national currencies from depreciation, Izvestia writes.
The situation may eventually develop into a global financial crisis. The current 7.8% drop in global currency reserves is not considered critical but certain countries may turn out to be unable to stabilize their national currency rates due to a lack of funds, Freedom Finance Global analyst Elena Belyayeva warns.
According to a number of economists, Russia’s situation is different from that in many other countries. "Our reserves, even taking into account the part that was frozen due to sanctions, are among the largest in the world, we have almost no debt and the ruble is getting stronger. Besides, transactions in the currencies of NATO member states don’t make sense for us. Given a record-high current surplus, our reserves are at no risk," Doctor of Economics Alexander Neverov noted.
Still, according to financial advisor Tatyana Volkova, everything will depend on how long the current geopolitical conflict will last.
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