China cuts shipments of smartphones, laptops and other technologies to Russia

Placeholder while loading article actions

US Commerce Secretary Gina Raimondo said on Tuesday that Chinese technology exports to Russia declined in March after US-led sanctions took effect, describing it as a sign that Beijing is wary of violating the trade embargo.

It said shipments of Chinese laptops to Russia fell 40 percent in March compared to February, while exports of smartphones fell by two thirds, citing the latest available Chinese trade data. It added that exports of communications network equipment fell 98 percent.

Whether China is willing to help Russia counter sanctions has been an open question for Western policymakers. Export figures previously reported before The Wall Street Journalsuggests that Beijing was at least initially reluctant to break the rules, possibly out of fear of US retaliation, which could include restricting technology sales to Chinese companies.

Requires sanctions against Russia Companies around the world are bound by the ban if they use US manufacturing equipment or software to produce computer chips, also known as semiconductors. Analysts say most chip factories around the world, including those in China, use software or equipment designed in the United States.

“They often ask me, you know, do these export controls work? I think the answer is yes it is unrestricted and unqualified,” Raimondo said. “I think they work because we have such a strong coalition of countries around the world involved in the implementation.”

Computer chip industry begins halting deliveries to Russia in response to US sanctions

The United States and 37 other countries designed trade restrictions to cripple Russia’s military and high-tech economy after the country’s invasion of Ukraine. The rules prohibit the sale of computer chips, communications equipment, lasers, avionics and marine technology to many Russian buyers.

There are indications that the restrictions are also undermining Russia’s ability to manufacture at least some military equipment. Last week, Raimundo He told the Senate Committee Ukrainian officials have reported finding computer chips intended for household appliances in Russian military equipment. A Raimondo spokeswoman later clarified that the rudimentary chips were found in tanks.

This is less strange than it might sound, said Douglas Fuller, a semiconductor expert at City University of Hong Kong. He said a type of semiconductor known as a microcontroller is used to control various functions in both devices and automated vehicles. Because tanks are primarily armored cars, he said, the chips would likely be used to control the same functions they perform in cars, such as braking and steering.

The export ban was not intended to prevent sales of consumer goods to Russia such as smartphones and laptops. But trade lawyers say some companies have completely stopped delivering electronic goods to Russia, regardless of whether individual items violate the rules.

Several companies are just closing exports to Russia. said Kevin Wolf, a former senior Commerce official who is now a partner at Akin Gump Strauss Hauer & Feld.

This is different from the approach of Western technology companies to a former US base Banning technical exports to Huawei, the Chinese telecommunications manufacturer, which the United States has accused of threatening American national security. In this case, computer chip manufacturers and other companies have asked their attorneys to review the rules to determine which sales are still allowed.

It is clear that invading a foreign country and killing people has more influence on decisions based on company policy than it affects what [in Huawei’s case] It has been described as a widespread threat to national security, Wolf said.

He added that more money was likely at stake in sales to Huawei than sales to all of Russia to some technology exporters.

A variety of major tech companies — in the United States, South Korea and even China — have said they will halt sales or suspend business in Russia because of the war.

China’s DJI, the world’s largest manufacturer of commercial drones, said in April It was suspending operations in Ukraine and Russia, becoming the first major Chinese company to openly leave the markets due to a war the Chinese government refused to condemn.

Apple in March He said it was parked All product sales are in Russia. Days later, Samsung too All product sales suspendedincluding smartphones and computer chips.

China’s Apple, Samsung and Xiaomi were the top three smartphone makers in Russia in the first quarter in terms of shipments measured, according to the latest figures from International Data Corp. (IDC).

Xiaomi did not immediately respond to a request to comment on its sales to Russian buyers.

Huawei, one of the world’s largest manufacturers of telecom network equipment, has refused to say whether it has reduced sales to Russia, although the almost complete collapse of sales of such equipment in March suggests it has.

“Our thoughts are with those suffering as a result of this conflict,” spokesman Glenn Schloss said in an email. We are evaluating the impact of relevant policies. It is Huawei’s policy to comply with the applicable laws and regulations in the countries and regions in which we operate.”

Even if some tech companies no longer sell directly in Russia, their products can still reach the gray market, said Nabila Popal, director of research for the global hardware market at IDC.

“Smart merchants will find a way to get them in,” she said.

Raimondo said exports to Russia from a variety of countries have fallen sharply. US shipments in technology categories subject to export controls fell 86 percent. It said South Korea’s exports to Russia fell by 62 percent and Finland by 60 percent.

Leave a Comment