MOSCOW, June 20. /TASS/. Top US diplomat and Chinese leader meet in Beijing amid souring bilateral ties; Brussels may start drafting 12th package of anti-Russian sanctions, even as 11th still yet to be approved; and India looking to buy a few US-made drones amid Modi’s state visit to Washington. These stories topped Tuesday’s newspaper headlines across Russia.

 

Vedomosti: US Secretary of State Blinken meets with Chinese President Xi in Beijing

On June 19, the second day of his visit to Beijing, US Secretary of State Antony Blinken held a 35-minute-long meeting with Chinese President Xi Jinping. The talks, the Associated Press said, symbolized the success of Blinken’s trip to China, the first by a US Secretary of State since 2018. However, the meeting was not publicly confirmed until an hour before it took place, when the State Department released a message saying that the talks would happen.

Although Xi had a positive assessment of his meeting with the top US diplomat, both sides had low expectations ahead of the talks. Moreover, Blinken, whose biggest ask was a resumption of communications between the two countries’ militaries, left Beijing with promises to continue the dialogue but empty hands regarding a top brass tete-a-tete.

Alexander Lomanov, head of the Center for Asia-Pacific Studies at the Russian Academy of Sciences’ Primakov Institute of World Economy and International Relations (IMEMO RAS), sees no prospects for improving US-China relations, since Washington has demonstrated no desire to refrain from a course aimed at containing China. In spite of the correct tone of Blinken’s statements while in Beijing, Washington has been pursuing an unfriendly policy toward China, including providing military and political support for Taiwan, attempting to stifle China’s growth in terms of military hardware and technology, and fencing China off from access to Western markets and technology, the expert told Vedomosti. Additionally, Beijing is dissatisfied with US actions in the area of security, which have boiled down to the creation of anti-Chinese blocs in Asia, as well as exerting pressure in the field of scientific and technological cooperation, and making claims for US supremacy in the Pacific region, he said. Nevertheless, Beijing still hopes for a rapprochement with the United States, which itself understands the importance of building relations with China. According to Lomanov, both Washington and Beijing have been working hard to slow down the deteriorating trend in the bilateral relationship. Work is underway to strengthen communications, and if the two sides can manage to at least stop the ties from deteriorating further in the foreseeable future, this would represent a major diplomatic breakthrough in and of itself, Lomanov concludes.

Lev Sokolshchik, researcher at the Center for Comprehensive European and International Studies at the Higher School of Economics (HSE University), does not expect bilateral relations to improve. To him, the confrontation between Beijing and Washington has been of a systemic nature and, therefore, it will persist over the longer term, affecting the economy, politics, and technological progress, the expert warned. The US officially views China as a "strategic rival," a status officially promulgated in Washington’s latest security concept, Sokolshchik recalled. Moreover, several major regional issues have yet to be resolved, with Taiwan receiving weapons from the United States being the thorniest one. While following the Bali summit, the United States declared its adherence to the "One China" principle, Washington has continued to provide major support to Taiwan. Thus, Sokolshchik concludes, Blinken's visit was more of a tactical move, designed to make the confrontation more manageable.

 

Izvestia: EU may draft 12th set of anti-Russia sanctions soon with ink not yet dry on 11th

Brussels is not abandoning its program of sanctions on Moscow and will get to work on its 12th package of restrictions just as soon as it adopts the much-delayed 11th package, members of the European Parliament (MEPs) told Izvestia. Croatian MEP Ivan Vilibor Sincic, who is part of the Delegation to the EU-Russia Parliamentary Cooperation Committee, doubts that the European Union member states can easily reach a consensus this time. "There is little left to impose sanctions on, and what remains [to be sanctioned] is hardly acceptable for all in the EU," he told Izvestia.

"When imposing its first sanctions on Russia, the bloc was somehow confident that every third nation would automatically follow suit and abandon its trade with us," a representative of Russia’s permanent mission to the EU said. "But that never happened. Since about then [the EU] has been thinking about how to make others join the anti-Russian restrictions," the mission’s representative added.

However, Brussels did not calculate that the inclusion of companies from third countries as sanctions targets may have a boomerang effect on both the activities of European market players and the bloc’s own cooperative links with these economies, signaling to the EU that such steps would not go unanswered, the Russian diplomatic mission explained, adding that it doubted the EU would succeed in putting the final seal of unanimous approval on the 11th package of sanctions by its summit, which is slated for June 29-30.

German MEP Gunnar Beck also suspects that additional anti-Russian restrictions will be adopted "no later than by July." "They may adopt the new package by their summit in late June. Financial sanctions and restrictions on Russian energy imports threatened the Russian economy the most, but the two decisions were made last year," Beck recalled. "Despite the unprecedented scale of the restrictions, the Russian government turned out to be very well prepared, so none of the sanctions packages has had a decisive impact. The same fate awaits the 11th package," he said with confidence.

And, yet, the MEP doubted that the ineffectiveness of the sanctions imposed to date would dissuade Brussels from embarking on drafting yet another package, the 12th. "No matter how crazy it sounds, but you are unlikely to stop and admit defeat after having imposed 11 packages. For this reason, the EU is almost doomed to continue concocting extra sanctions that will harm its population at least as much as the Russian people, if not more," Beck concluded.

 

Nezavisimaya Gazeta: New Delhi set to buy a few ‘Made in USA’ drones

Indian Prime Minister Narendra Modi will arrive in the United States for a state visit on June 21. In New York, the Indian PM will take part in International Day of Yoga festivities, and in Washington he will address Congress and hold talks with US President Joe Biden. Although Washington emphasizes that the Indian guest will be greeted as the leader of the world’s largest democracy, pundits note that America is actually seeking to embroil India in its anti-Chinese alliance.

Reuters reported that Washington has been working to build military and industrial ties with India to transform the South Asian power into a counterweight to China. And the existing differences with New Delhi on Ukraine do not seem to bother Washington. It is no accident that White House National Security Adviser Jake Sullivan visited New Delhi ahead of Modi’s US trip. In India, he discussed the bilateral agreement on developing jointly advanced technology, AI, and producing semiconductors, mostly for military purposes. This will involve supplying India with General Electric engines for fighters and MQ-9B SeaGuardian combat drones. This, Washington expects, would undermine Russia’s dominant role in the Indian weapons market.

According to estimates, the drone deal will cost $2 billion to $3 billion. While media reported initially that India would buy 30 UAVs, their number was later lowered to 18. EADaily reported that India changed its mind after Russia downed a US drone over the Black Sea.

Alexey Kupriyanov, director of the Center for the Indian Ocean Region at the Russian Academy of Sciences’ Primakov Institute of World Economy and International Relations (IMEMO RAS), told Nezavisimaya Gazeta that India was following the developments in Ukraine, the latest weapons of destruction and what the conflict brings in military terms. "India will be upgrading its armed forces by means of purchasing drones. While the Indians themselves have so far been unable to manufacture drones, especially combat drones, they have approached the United States. And the Indians will test the aircraft. If those prove effective, they will try to open their own production based on their technology, reaching agreement with the Americans," the expert said.

However, India’s transactions with the US will hardly affect Russian-Indian cooperation in the military-technical domain, he argues, as the Americans occupy a niche in which they cannot be replaced by Russia. "We have been actively building drones and other military equipment, but Russia has been buying components for those in the West, using gray export schemes, and from China. In fact, the Americans are entering an open market here. And Russia cannot rival the US here," he lamented.

 

RBC: Russian corporate revenues exceed 1 quadrillion ruble mark for first time

In 2022, Russian corporate revenues doubled year on year to exceed 1 quadrillion rubles ($1.25 trillion), according to the Federal Tax Service. Aggregate revenues totaling about 1.3 quadrillion rubles were nearly twice as large as in 2021, when Russian firms brought in 655 trillion rubles ($7.8 billion). Business revenues exceeded 1 quadrillion for the first time in Russia’s history.

However, corporate profits increased to a lesser degree, or by a mere 5.9%, going from 29.4 trillion rubles ($348 million) in 2021 to 31.1 trillion rubles ($369 million). And, with the average inflation rate at 13.8% in real terms last year, profits actually declined. Experts interviewed by RBC say this discrepancy is because businesses faced higher costs amid sanctions pressure.

To Alexander Chepurenko at the Higher School of Economics (HSE University), the sharp spike in revenues coupled with an only modest increase in profits came as business costs soared: 2022 saw a disruption in supply chains, while logistics costs rose.

Anton Sviridenko, executive director of the Stolypin Institute for the Economy of Growth, says higher business costs were due to inflation, which stood at 11.9% last year, while actually it varied between 10 to 15% across industries.

Pavel Kondukov, a partner with BGP Litigation, does not forecast another sharp rise in revenues for 2023, citing the oil and gas price ceilings, and the US ban on Russian seaborne crude supplies and petroleum exports to the EU.

 

Kommersant: Georgia comes out on top among wine suppliers to Russian market

Georgian wines have been enjoying a strengthening position in the Russian market thanks to the availability of a direct import pipeline. In January-May 2023, Georgian wine exports to Russia rose 63% to 24.15 million liters, taking the former Soviet republic to top place among exporters of still wines, nudging out Italy. This may further complicate things for Russian winemakers, which compete primarily with Georgian products on the shelves.

Luding Group Executive Director Ernest Khachaturyan points to the low volatility of production costs for Georgian and Armenian wines. Additionally, there is no import duty on Georgian wines, Alexander Stavtsev at WineRetail adds. According to him, Italian wine imports to Russia can be hampered by difficulties with payments, rising exchange rates and higher prices for certain items.

Russia’s quality watchdog, Roskachestvo, has calculated that sales of Georgian still wines have been growing by more than 20% year on year amid lower demand for wines from further abroad. According to Stavtsev, the industry is currently mulling imposing restrictions on wine imports from some nations, and such measures could help Georgian wines consolidate further and even increase their share in the Russian market.

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