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Saturday, February 4, 2023

Chinese Tech Firms Quietly Moving Business From Russia

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Chinese Tech Firms Quietly Moving Business From Russia – While China has stated that it will not impose sanctions on Russia as a result of its invasion of Ukraine, many of the country’s tech companies have begun to avoid doing business in Russia.

According to a Wall Street Journal report published on Friday (May 6), the Chinese government has urged enterprises to resist pressure from the United States and other countries.

Nonetheless, sources close to the situation told the Journal that several major Chinese firms are quietly reducing shipments to Russia, where they have a dominant position on a number of products.

According to the sources, these companies include computer maker Lenovo Group Ltd. and smartphone and gadget maker Xiaomi Corp. However, unlike Western corporations, these firms have made no public remarks condemning Russia’s intervention in Ukraine.

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China’s banking and insurance regulator announced in March that the government opposes financial penalties against Russia and will not join other Western countries in applying them.

Guo Shuqing said at the time that the country would “not participate in such sanctions” and that “regular economic, trade, and financial exchanges with relevant parties” would continue.

He stated that unilateral financial sanctions rarely have a favorable outcome and lack legal support.

According to the Journal, China’s Ministry of Commerce conceded last month that the sanctions have impacted trade with Russia, but urged businesses not to “submit to external coercion as well as make improper external remarks.”

The sharp drop in technology exports to Russia demonstrates how effective the West’s sanctions have been at influencing the conduct of companies located far away, especially in nations where the government opposes the sanctions. China’s entire exports to Russia decreased by 27% in value from February to March, according to trade data.

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Russia has urged the BRICS group of rising economies (Brazil, Russia, India, China, and South Africa) to expand the usage of national currencies and integrate payment systems, as PYMNTS reported in April.

At a meeting with the BRICS, Russian Finance Minister Anton Siluanov stated that the sanctions have made the world economic situation significantly worse, as well as destroying the cornerstone of the existing international monetary and financial system based on the US dollar.

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