Moscow stocks up on semiconductors and raw materials for the defense industry in China. The US blacklists companies. But will that be enough to stop the trade?

The whole world is against Russia, they say. But the “whole world” is actually only a small part of it. Many states spread the aggressive war verbally, but are reluctant to take further measures. Others more or less openly support Russia. Including the country with the largest industrial capacity in the world and a direct border with Russia. China does not supply real weapons such as tanks or artillery, but there are no restrictions on so-called dual-use goods that can be used for civil or military purposes.

And Putin’s shopping basket looks correspondingly large. The Wall Street Journal reveals that the volume of alumina imported by Russia has increased by a factor of 400. The oxide is used to make aluminium, a base material for Putin’s defense industry. At the same time, exports of semiconductors and circuit boards increased.

China support is crucial

US sanctions do not sound good in China, as Chinese companies that arouse Washington’s displeasure are also being sanctioned. To ensure that the rules made in Washington are heard more, five Chinese electronics companies have been blacklisted for allegedly supporting Russian armaments. China’s support is “by and large crucial for Moscow,” writes the Wall Street Journal. Maria Shagina, an expert on Russia sanctions at the International Institute for Strategic Studies in Berlin, told the paper that the latest measures against Chinese companies should show that the US threats are credible. “While the US and its allies have failed to deter Russia, it is important to stop China from systematically helping Russia early enough.”

Beijing has an interest in minimizing the damage to Chinese companies from US sanctions, but the country will also want to avoid the impression that it is obeying US orders. Chinese leader Xi Jinping has repeatedly reiterated Beijing’s support for Russia, saying the two countries share a “borderless friendship.” Now the importance of Beijing as a buyer of energy and raw materials and thus as a foreign exchange supplier for Russia is increasing. At the same time, when it comes to high technology, China has caught up with, if not overtaken, the West in key areas. Apart from special spare parts for West products, there is hardly a good that is not also produced in China.

semiconductor problem

The China Poly Group produces weapons and missile technology and drone laser technology. Rocket parts that are used in the S-400 air defense system are said to come from her. In addition to semiconductors and special components, China also helps with the necessary raw materials. After the invasion of Ukraine, Australia banned the export of alumina. Immediately, Chinese exports of alumina to Russia skyrocketed. The latest entries on the US Department of Commerce blacklist reveal another dilemma. The exports do not go directly through the big producers, but through small traders. After all, the companies now named were also in business with Western companies, and the US penalties will cause them pain. The logical next step to circumvent the sanctions would be to work with private mini-companies that the US cannot harm because they do not operate internationally. The West ridiculed the fact that chips from household appliances were installed in Putin’s tank. Naïve minds even imagined chips being soldered out of a washing machine. This finding is no laughing matter, because it only shows that the electronics of a weapon system can very well be equipped from the spare parts store of a manufacturer of household appliances. The “WSJ” also only lists goods that have been officially approved by customs. A train loaded with aluminum oxide is hard to hide. Semiconductors and electronic armaments, on the other hand, can easily be smuggled if Chinese customs are not very careful.

It will soon be seen whether the USA will be successful with the sanctions. Without importing semiconductors, Russia cannot produce modern weapons or equipment. Due to the inevitable wear and tear of war, everything that has to do with electronics would then increasingly be missing at the front. On the other hand, if Moscow continues to send cruise missiles, night vision devices, drones, jammers and the like to Ukraine, the sanctions will come to nothing.

Those: WSJ