Chinese firms sell goods to Russia needed for military operation in Ukraine

Chinese exports to Russia of microchips and other electronic components and raw materials, some of which have military applications, have surged since the conflict in Ukraine, complicating efforts by the US and Western allies to isolate the country’s economy and cripple its military.

Chinese customs data shows that chip shipments from China to Russia more than doubled to about $50 million in the first five months of 2022 from a year earlier, while exports of other components such as printed circuits increased double digits. percent. Export volumes of alumina, which is used to make aluminum metal, an important material in the arms and aerospace industries, are 400 times higher than last year.

The increase in the declared value of exports can be partly explained by inflation. But the data shows that many Chinese technology sellers continue to do business with Russia despite US scrutiny.

Chinese exports, although only a small part of the country’s total exports, are a source of concern for US officials. Last month, the US Department of Commerce blacklisted five Chinese electronics companies for allegedly helping the Russian defense industry both before and after the raid.

“Our government and our national leadership have made it clear since February 24 that China should not provide material, economic and military support to Russia,” US Ambassador to China Nicholas Burns said last week.

The Commerce Department said in a written response that while it does not believe China has attempted to systematically evade U.S. export controls on Russia, the Commerce Department closely monitors trade between the countries and „would not hesitate to use all of our legal and regulatory instruments against parties that provide support for the Russian military.

Sino-Russian trade in microchips and other components with potential military use involves both small private enterprises and sprawling state-owned enterprises. Incomplete data and complex networks of subsidiaries and intermediaries make it difficult to track all activities.

Chinese officials have said the country does not sell weapons to Russia. And overall exports from China to Russia have dropped significantly this year as many Chinese companies fear conflicts with the US.

Support for China, generally speaking, is crucial for Moscow. Oil and gas revenues make up a significant part of the Russian economy. While European countries such as Germany are seeking to reduce energy purchases from Russia, Russian President Vladimir Putin stressed the importance of selling much more energy to China and other Asian countries in the future.

China is also gaining leverage in relations with Russia. Although China has historically relied on Russia, and before that the Soviet Union, for many advanced technologies, the situation is slowly changing as China closes the technology gap and becomes a defense exporter in its own right.

Chinese leader Xi Jinping has repeatedly reaffirmed Beijing’s support for Russia, saying the two countries share „boundless friendship.”

General dissatisfaction with the US-led post-World War II international system gradually drew countries closer together during Xi Jinping’s decade in power, despite a long history of strategic mistrust.

Researchers at C4ADS, a Washington-based nonprofit that monitors security threats, are looking into trade between Russian defense firms and China Poly Group, a conglomerate controlled by China’s central government.

Poly’s subsidiaries include a key Chinese weapons manufacturer and exporter of small arms, missile technology and, more recently, laser technology for defense against drones.

Between 2014 and January 2022, C4ADS researcher Naomi Garcia identified 281 previously undisclosed shipments of so-called dual-use goods, with both civilian and military uses, from Poly subsidiaries to Russian defense organizations, she writes in a report due Friday. .

In one of the latest shipments, in late January, according to the study, Poly Technologies shipped antenna parts to the sanctioned Russian defense company Almaz-Antey. Ms Garcia said she hasn’t detected Poly shipments to Russian defense firms since the sting operation began in late February.

Russian customs documents seen by C4ADS say parts of the antenna were designed specifically for a radar that is part of Russia’s advanced S-400 anti-aircraft missile system. Russian media, citing the country’s Ministry of Defense, said that the S-400 system was used in Ukraine.

“Polytech certainly helps the Russian government in acquiring parts for missile systems,” said Ms. Garcia.

Poly Technologies was sanctioned by the State Department in January for its involvement in the dissemination of rocket technology. A State Department spokesman said the sanctions were linked to the transfer of the company’s ballistic missile technology to another country, but did not say to which country.

Poly did not respond to a faxed request for comment, and a spokesperson for Poly hung up when asked about its work with Russia. At Almaz-Antey, the Ministry of Economic Development and the Ministry of Industry and Trade of Russia did not respond to the comment.

In addition to components for radar and semiconductors, Chinese exporters have also helped fill a gap in key materials that Russia cannot source elsewhere.

In March, Australia banned the export of aluminum oxide and a number of other related products, citing their use in weapons development. Since then, Chinese exports of alumina to Russia have skyrocketed, reaching 153,000 metric tons in May, according to Chinese customs data, up from 227 metric tons in the same month a year earlier.

Unlike state-owned conglomerate Poly, the Chinese companies most recently attacked by the Commerce Department are small private equipment distributors based in Hong Kong and China’s southern province of Guangdong. Although there is relatively little information about the extent of the business they do with Russia, some of the companies named by the US have openly advertised their defense activities.

One firm, Winninc Electronics Co., previously stated on its website that it is a leading distributor „for industrial, military, aerospace and consumer electronics manufacturers worldwide.” This language has since been removed.

“Hopefully we can get through this,” the website now says.

Another target company, Sinno Electronics Co., also until recently stated on its website that it is a „collaboration partner” of US listed equipment manufacturers, including Texas Instruments Inc. and Analog Devices Inc.

Texas Instruments did not respond to requests for comment. Analog Devices has stated that it is not a Sinno partner. He added that he instructed his distributors to stop doing business with the company after the Commerce Department decided to blacklist it.

Sinnoh did not respond to a request for comment. The person who answered the call to Winninc said the company was not informed of the US decision before it was made public, but declined to comment further.

Maria Shagina, an expert on Russia sanctions at the International Institute for Strategic Studies in Berlin, said the latest moves against Chinese companies appeared to be intended to show that the US threats were credible, especially given that smaller companies can better bypass exports than larger ones.

“While the US and its allies have failed to contain Russia, it is important to prevent China from systematically assisting Russia as early as possible,” she said.

James Rogers

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