MOSCOW, May 24. /TASS/. Russia and China affirm their close commercial ties and talk up cooperation at Shanghai business forum; the addition of F-16s to Ukraine's arsenal is unlikely to be a game changer; and Iran looking to help Russia avoid total financial isolation. These stories topped Wednesday’s newspaper headlines across Russia.
Trade turnover between Russia and China has increased by 25% since the start of the year to reach approximately $52 bln, while the two countries’ mutual sales have risen by nearly one-third per season for the past two years in a row, Russian Prime Minister Mikhail Mishustin said at the plenary session of the Russian-Chinese Business Forum in Shanghai. The countries are aiming to hit a trade turnover target of $200 bln this year, topping last year’s record of nearly $190 bln. They are also looking to improve logistics connections and boost financial and industrial cooperation. Experts told Izvestia they see significant potential for Russia and China to establish joint manufacturing projects in the Russian Far East, as well as projects in infrastructure, agriculture and energy.
According to Mishustin, the overall bilateral trade growth has been accompanied by other qualitative changes, first and foremost of which is the declining dependency on the dollar and other Western currencies. He emphasized that the two countries will continue to work on enhancing the independence of their financial interactions, thus helping to bolster economic sovereignty.
Russia has always prioritized trade relations with China, as its closest neighbor and strategic partner, Alexander Suchkov, trade group Business Russia's business ambassador to the Chinese provinces of Heilongjiang and Guangdong, and the city of Beijing, told Izvestia. "China has the world's largest economy; it is a global factory that produces goods for practically every country," he added.
Denis Manturov, Deputy Prime Minister and Minister of Industry and Trade, told Izvestia that Russia and China are discussing establishing joint ventures in Russia. He stated that the countries are currently holding relevant talks, but he did not name specific industries.
In the near future, China will become Russia’s critical partner, which is of particular relevance in light of rising geopolitical tensions and the various sanctions imposed by the EU and the US, Natalia Nazarova, director of the Institute for the Development of Entrepreneurship and Economics, told Izvestia.
The deployment of up to 200 US-made F-16 fighter aircraft, equipped with long-range missiles, would alter the situation in the skies over Ukraine, according to Kiev-based military analyst Lieutenant General Igor Romanenko. Meanwhile, US Air Force Secretary Frank Kendall said that it would take several months for the F-16s to actually arrive in Ukraine. Moreover, training Ukrainian pilots on the fourth-generation airframe could take from three to six months. Some Russian experts told Nezavisimaya Gazeta, however, that Ukraine could receive up to 40-50 Western jet fighters within 90 days.
Kendall elaborated that Kiev could look forward to receiving the F-16 fighters only within "several months at best." At the same time, top EU diplomat Josep Borrell revealed on Tuesday that training for Ukrainian pilots to fly the fourth-generation F-16 fighter jets has already begun in many EU countries, most notably in Poland.
Yury Knutov, military expert and director of the Museum of Air Defense Forces, told the newspaper that a group of Ukrainian pilots arrived in the United States for training a month ago and that getting them up to speed on flying modern fighters would take four months.
The analyst believes that the addition of the aircraft to the Ukrainian armed forces’ arsenal may pose some challenges for the Russian side, particularly because the F-16s could be used as a launch platform for long-range missiles supplied to Kiev and used to hit targets such as Crimea, Donbass, and Russian border regions. "We have SU-35s capable of shooting down more advanced airframes than F-16s at long range. Furthermore, our pilots can detect them long before they are discovered. There are also effective anti-aircraft missile systems capable of shooting down enemy targets from a long distance," the expert added. As a result, new aircraft deliveries will trigger a new wave of escalation, but they will not be a "game changer" that fundamentally alters the overall situation in the conflict zone, he told the newspaper.
Despite the EU's decision to phase out Russian oil and gas deliveries, European governments will continue to import Russian energy resources through third countries, German Member of the European Parliament (MEP) Gunnar Beck said in an interview with Izvestia. At the same time, the existing approach has already resulted in rising energy prices, which has harmed the competitiveness of EU industries. Beck also believes that Germany and the EU will not authorize an active investigation into the sabotage of Nord Stream since they have no intention of repairing the gas pipelines.
According to him, Europe will continue to import Russian energy while simply "pretending" that such resources are being imported from "somewhere else." Under this pretext, they are willing to pay exorbitant prices for supplies, he remarked.
The consequences are already clear, Beck added, and they include significantly higher energy prices, which are fueling consumer price inflation and undermining the competitiveness of EU industries in global markets, German industry in particular. Germany will suffer the most because the German government is attempting to minimize reliance on Russian gas while also abandoning nuclear energy and reducing coal consumption, he added.
At the same time, Germany and the European Union will not allow a no-holds-barred probe into the sabotage of Nord Stream because they have no intention of repairing the damaged pipelines, Beck added. According to him, the German leadership, which is beholden to the US, has limited freedom of action.
Until recently, the Russian government and Russian companies had been complying with US sanctions on Iran and, thus, refused to supply Tehran with any type of weapons. Now, however, Russia is prepared to expand the scope of its cooperation with Iran, notably in the financial sector, Nezavisimaya Gazeta writes. It was reported earlier that a gold-backed, Russian-Iranian quasi-currency was being developed. And, most recently, Central Bank of Russia Governor Elvira Nabiullina visited Tehran on a mission to negotiate and sign agreements pertaining to the currency and banking sectors.
According to Russian Deputy Prime Minister Alexander Novak, more than 80% of mutual payments between Russia and Iran are now made in national currencies. According to him, other currencies are also under consideration, including the Chinese yuan, which could become a leading trade settlement currency in the future.
According to State Duma Speaker Vyacheslav Volodin, trade turnover between Russia and Iran will expand by 15% to $4.6 bln in 2022, with collaboration spanning virtually all sectors. Meanwhile, the G7 countries recently urged Tehran to refuse to support Moscow in the context of the Ukrainian crisis and to refrain from transferring arms to Russia.
Mutual tourism flows between the two countries has recently increased as well. According to the Russian Federal Security Service (FSB) border service, the number of Russians entering Iran nearly doubled in 1Q 2023 compared to the pre-crisis year of 2019. The Association of Tour Operators in Russia (ATOR) noted that more than 10,000 Iranian tourists arrived in Russia in 1Q 2023, which is more than in previous years. "Resolving the issue of payments through the Mir card [Russian payment system] will undoubtedly boost the development of Russian-Iranian tourism," Nina Mamedova, chair of the Iran Section at the Russian Academy of Sciences’ Institute of Asian Studies, told the newspaper.
The Russian State Duma recommended banning Polish freight carriers from entering Russia with anything other than medical, humanitarian or postal cargo. The lawmakers also proposed setting new prices for fuel for Polish truckers and subsequently all freight carriers from unfriendly nations. The additional levies are estimated at 17-20 bln rubles ($212.2 - 249.6 mln) and could be used to fund Russian road construction projects. Market participants told Kommersant that Russian freight carriers may not benefit from this policy, however, because the market niche held by Polish truckers will only be filled by other Europeans.
Evgeny Dyatlov, head of the procurement department for international transportation at FM Logistic in Russia, told the newspaper that a comprehensive restriction on transiting Russian territory for European logistics companies would have a substantial impact. He believes that implementing the proposed regulation will not provide Russian carriers with an additional market, however. "Polish freight carriers will easily be replaced by carriers from Latvia, Lithuania, and other European countries," he said.
Meanwhile, Yulia Shlenskaya, head of customs and logistics broker KBT, expects that Poland will respond in a similar way. "This will create some additional difficulties for all parties and increase the cost of transportation," she said, adding that market participants would eventually adapt.
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