Analysts name key supplier of military technology to Russia
28 March 21:16
China plays a key role in supporting Russia’s military-industrial complex by supplying high-tech electronics and industrial tools. Western sanctions have restricted Russia’s access to critical technologies, which has led to a significant increase in its dependence on China, Komersant ukrainskyi reports, citing a study by the Kyiv School of Economics.
From 2021 to 2023, China’s share in the supply of military goods to Russia increased significantly. In 2021, China and Hong Kong accounted for 41% of military goods supplied to Russia, while EU countries accounted for 41%. After the sanctions were imposed in 2022, the EU’s share fell to 13%, while China and Hong Kong’s increased to 68%. In 2023, when the sanctions were fully implemented, the EU’s share dropped to 2%, while China and Hong Kong accounted for 76% of military supplies. Overall, in 2023, China was the source of 90% of all military goods imported by Russia.
China supports the Russian military-industrial complex through three main channels:
1. Substitution of Western goods. Chinese companies have filled the vacuum, providing 49% of Russia’s military imports.
2. Re-export of Western goods. Intermediaries from China redirect Western-made goods to Russia, accounting for 18% of total imports.
3. Offshore production. Chinese factories working for Western companies produce goods that account for 16% of Russia’s imports.
However, this dependence on China is costly for Russia. Chinese goods are often inferior in quality to their Western counterparts, and re-exports are accompanied by high costs due to the circumvention of sanctions. However, China remains virtually the only supplier in several critical categories. This includes optics, radio and communications equipment, and CNC metal cutting machines, which often contain Western components produced by Chinese companies to circumvent sanctions.
To circumvent sanctions, Russia uses shell companies and unscrupulous distributors in third countries, including China. Western firms continue to supply as long as their partners are not on the sanctions lists. Insufficient control and weak enforcement of sanctions requirements leave loopholes for such schemes.
In the face of economic constraints, Russia’s dependence on China continues to grow. In order to effectively limit Moscow’s access to critical military technologies, Western countries need to strengthen control over sanctions compliance, close existing loopholes, and take tougher measures against companies involved in violating restrictions.
Thus, in the current environment, China has actually become a key technological donor to the Russian military-industrial complex, supplying electronics, microchips, computer numerical control machines, optical equipment, communication systems, and other critical components. These technologies allow Russia to partially compensate for the restrictions imposed by Western sanctions by maintaining the army’s combat capability and continuing to produce weapons despite technological isolation.
However, this dependence has its drawbacks. Chinese analogs of Western goods are often inferior in quality and technological characteristics. In addition, supply chains are becoming complex, expensive and unreliable, increasing economic costs for Russia. Also, Western countries face the challenge of strengthening control over compliance with sanctions, closing loopholes for illegal supplies, and reducing Russia’s ability to use international intermediary schemes to obtain prohibited goods.
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What other countries besides China supply Russia with goods for war
Since the beginning of the full-scale war against Ukraine and the large-scale Western sanctions that followed, Russia has lost access to key Western technologies.
Previously, the EU countries played an important role, with a 41% share in the Russian military-industrial complex in 2021. However, after the imposition of tough sanctions and tighter export controls, this share has fallen sharply: to 13% in 2022, and to a minimum of 2% in 2023. In fact, the EU has stopped significant supplies of dual-use and military goods, closing Russia’s access to advanced European technologies.
In addition to China, Russia is actively using workarounds through third countries and intermediaries, among which the following stand out:
- Turkey;
- Armenia
- Kazakhstan
- Kyrgyzstan
- Uzbekistan;
- Belarus.
These states often serve as transit points for the illegal re-export of Western products banned by sanctions. For example, Western goods are purchased by distributors in third countries and then illegally redirected to Russia through a chain of fictitious companies.
Particular attention should be paid to the role of states such as Iran and North Korea, which occasionally provide support to Russia, including the supply of weapons, drones and ammunition. However, the scale of these supplies is much smaller than that of China, and their significance is more situational.
