Top stories from the Russian press on Wednesday, December 15th, prepared by TASS

Kommersant: Putin, Xi Jinping to hold detailed videoconference

On Wednesday, Russian President Vladimir Putin will hold a video summit with his Chinese counterpart Xi Jinping. The talks will be the culmination of the diplomatic year for Moscow and Beijing, continuing the rapprochement in response to the West’s containment policy. Each side views the other as a pillar of support in counteracting external threats. For Moscow these threats constitute US-NATO activity in the post-Soviet space and in Europe, while for Beijing, it is the anti-Chinese alliances in the Indo-Pacific Region. Without entering a military alliance, Russia and China prefer to act, according to the Chinese Foreign Ministry, "back to back."

"From the previous format of non-binding ‘strategic partnership’ Russia and China, under Western pressure, are moving to a new stage of cooperation - a de facto military alliance which, however, was not executed in the international legal format," Head of the Political and Military Research Center at the Institute for the US and Canadian Studies of the Russian Academy of Sciences Vladimir Batyuk told the newspaper. According to him, the evolution of military cooperation between Moscow and Beijing was determined by two key factors - the efforts on bringing NATO infrastructure to Russia’s western border and the formation of an anti-Chinese "sanitary cordon" along China’s southern and eastern borders.

"In 2021, the parties significantly increased political, military and economic cooperation. At the same time, tension was growing both in Eastern Europe and in Eastern Asia. And each side separately was conducting its complicated dialogue with the US. In recent months, this dialogue appeared more successful for Russia than for China," said Vasily Kashin, who heads the Center for Comprehensive European and International Studies at the Higher School of Economics. "Meanwhile, Moscow and Beijing constantly suspect the US of efforts at undermining Russian-Chinese relations and strive to inform each other of their dialogue with the Americans. Despite the long journey traveled in bolstering the trust, certain doubts about each other’s positions in the context of a new confrontation of great powers will remain for a long time," the expert explained.

Deputy Director at the Russian Academy of Sciences’ Institute of World Economy and International Relations Alexander Lomanov said that the bilateral trade figures that grew by 34% in the past 11 months, amounting to $130.4 bln, are an encouraging background for the conversation between the Russian and Chinese leaders, emphasizing, however, "that it is impossible to notice that the volumes of bilateral investment flows remain insufficient which indicates insufficient mutual trust between economic elites."

"Russian-Chinese relations are built on the finest nuances and reflect the situation around each country," Director of the Institute of Asian and African Studies Alexey Maslov says. According to him, Russian conflicts with the West are much less explosive and for the most part are controlled by Russia itself. Thus, according to the expert, not only is China Russia’s most important trade partner but, above all, Russia is the only absolutely reliable partner for China.

Nezavisimaya Gazeta: Kiev readies bomb shelters, tests air raid warning system

Next Monday, Kiev will host talks with the leaders of Ukraine, Poland and Lithuania. The leaders of the Lublin Triangle countries will meet for the first time to discuss the situation around the threat of a possible "Russian invasion." Kiev will be testing its air raid siren system during the visit of Polish President Andrzej Duda and Lithuanian President Gitanas Nauseda.

On Monday night, Ukraine’s Foreign Minister Dmitry Kuleba held the first phone conversation with Germany’s new Minister for Foreign Affairs Annalena Baerbock. According to the Ukrainian side, they discussed the situation along the Ukrainian border with Russia and Belarus as well as the necessity to renew work in the Normandy format.

After the Putin-Biden virtual summit, some experts in Kiev thought that the US president would pressure the Zelensky administration into implementing the Minsk Accords in the order of their provisions. This would mean bestowing a special status to the part of Donbass that Ukraine currently does not control. However, Kiev claims that there wasn’t even a hint on the part of Washington of such demands.

Ukrainian political expert Victor Vovk noted that the current format of talks on Donbass has led to a dead end and proposed returning to the previous formats of the participants. "The first international format of talks regarding Russia’s aggression was the Budapest one (with the participation of the US and the UK), then there was the Budapest plus format or the Geneva one (with the participation of the US and the UK as a single structure, not with separate EU member states). Precisely these formats were demolished by then newly-elected President Poroshenko to please Putin and Obama in Normandy on June 6, 2014… It was precisely then when Poroshenko de facto agreed to substantially decrease the responsibility of the guarantor states, the US and the UK, as well as the EU, for Ukraine’s fate." Germany and France as mediators in the Normandy format could not effectively facilitate the settlement which resulted in the conflict dragging on for over seven years. The expert thinks that Zelensky should have returned to the previous formats in 2019 or attempt to do so now.

Nezavisimaya Gazeta: Russia to respond to deployment of US medium-range missiles in Germany

The Russian army will soon conduct a series of drills on its Western border using Iskander operational and tactical missile systems, in addition to holding other "military and military-technical events" in response to the deployment of US medium-range missiles in Europe, according to Russia’s Defense Ministry and a statement by Deputy Foreign Minister Sergey Ryabkov. According to the Russian Foreign Ministry, Moscow is concerned about the creation of a "so-called artillery command that last century was managing medium-range Pershing missile systems" in Europe. And, in the near future, Europe and NATO should expect Russia’s new asymmetrical actions.

According to expert evaluations, now new effective modern missiles will appear in Europe instead of the Pershings. According to the US Drive magazine, the new Precision Strike Missile (PrSM) missiles will be deployed in Germany with a range capability of 310 miles (500 kilometers). It was noted that the range can be expanded to 800 kilometers meaning that the systems can easily strike Moscow or St. Petersburg from the Baltic states or Poland. Additionally, plans are in store to deploy prospective hypersonic Dark Eagle missile systems and Typhon fleet complexes with the range up to 2,000 kilometers which means that the missiles can reach important strategic objects in central Russia.

NATO claims that these systems won’t have nuclear warheads. Ryabkov, however, notes that "there is no trust in principle of NATO as an alliance." Russia cannot control the missiles the US will deploy in Europe and has no guarantees they won’t carry nuclear weapons. In response, Russia may deploy medium-range missiles with nuclear warheads on its western borders and possibly in Belarus.

Military expert, retired colonel Nikolay Elbekchiev told the newspaper that Russia had plans to develop new armaments in response to the US deciding to exit the INF Treaty. "I don’t doubt that such weapons already exist in the Russian Armed Forces." The expert thinks that the next step is the deployment of these complexes in Belarus. "Then any NATO strategic object in Europe will be targeted by the Iskanders," the expert concluded.

Kommersant: Green energy fails to curb soaring European gas prices

Gas prices in Europe continued to surge as January futures hit a record of $1,600 per 1,000 cubic meters, surpassing October’s highs. They climbed following a statement by Germany’s new Minister for Foreign Affairs Annalena Baerbock that Nord Stream 2 cannot yet be launched since the German regulator suspended its certification due to non-compliance with European energy legislation. Gazprom could increase its gas deliveries to Europe, yet the energy giant is not in a rush to do so. The supplies along the main transport routes remain stable while underground storage facilities are still not filled to their capacity. A decrease in wind generation in Europe may have also influenced the price hike.

Sergey Kapitonov, gas industry analyst at the Moscow School of Management SKOLKOVO Energy Center, notes that an apparent "bullish" trend is noted on Europe’s gas market. Gas prices are being pushed up both by the strategy of the suppliers of LNG and Gazprom, and record high prices for CO2 along with the political background around Nord Stream 2. Additionally, the expert thinks that there is a strong correlation with energy markets. For example, because of weather conditions it is not always possible to fully use the capacities of wind energy.

Ivan Timonin of Vygon Consulting notes that the current price surge was mostly triggered by the change in expectations regarding the launch of Nord Stream 2. Dmitry Marinchenko of Fitch forecasts that given this background, Moscow won’t significantly increase deliveries to Europe and the prospect of a gas deficit in Europe, especially if the winter is cold, seems likely. "High volatility on the market and high prices are likely to remain at least until the end of the heating season," he noted.

Izvestia: What’s behind the Russian stock market’s record drop

At the beginning of the week, the Russian stock market plunged to record lows in more than a year and half. At the end of trading on December 13, the MOEX index dropped by 3.77% to 3,613 points, while the RTS index sank almost by 3.98% to 1,548 points. A similar record low was recorded last April amid the coronavirus pandemic and worldwide lockdowns, turbulence on exchange markets and record oil price drops to $37.6 per barrel. The market continued to drop on December 14 as well, rolling back to the levels of February 2021.

Head of the Finam stock analysis department Igor Dodonov thinks that the West’s harsh anti-Russian rhetoric and increased sanctions risks are playing against Russian market now. All of this causes increases anxiety among both Russian and foreign investors. According to Mikhail Zeltser, a stock market expert at BCS Global, the drop is caused both by geopolitical factors and the spread of the Omicron strain as well as by expectations that the US Federal Reserve is downsizing their quantitative easing program along with the monetary clampdown of global central banks.

Mikhail Vasilyev, chief analyst at Sovcombank, explained that harsh rhetoric with regards to "red lines" between Russia and the West remains, while pressure on Nord Stream 2 is being ramped up. He pointed out that the market can recover due to the Christmas increase on Western sites, a decrease in geopolitical tensions, an increase in oil prices in case of decreased Omicron risks or a cold winter. Vladimir Bragin of Alfa Capital concurs, saying that the market can grow if the general news background is calm. Otherwise, one can expect a decrease yet not as dramatic as the recent drop.