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Western sanctions will affirm China’s grip on Russian technology market – Experts

As Western tech leaves Russia, China is expected to affirm its grip on the country's technology market.

On February 24, the United States announced restrictions on the supply of technology to Russia. They will take effect on March 3, after which U.S. manufacturers will have to obtain a license to export goods to Russia, ranging from electronics and computers to avionics and aerospace components. Thirty-two countries, including the European Union, Australia, Canada, Japan, New Zealand, and the United Kingdom, have imposed similar restrictions on the export of their high-tech products to Russia.

U.S. authorities, however, stated that they would not interfere with licensed shipments of computers, smartphones, cameras and other devices for the consumer market. But exports of more complex equipment will be allowed only in exceptional cases. For example, to ensure the safety of civilian flights and humanitarian needs. On March I, the United States also announced that they would ban Russian planes from its airspace.

Photo credit: Denys Nevozhai

Restrictions will also affect foreign goods, for the production of which equipment or technology from the U.S. was used. For example, if the device was created in Asia, and then imported into Russia without a license, regulators can deprive the foreign manufacturer of rights to use American developments.

According to TJ, this will leave a void in the technology sector that will ultimately be filled by the People’s Republic of China.

Russo-Chinese relations facilitate interests in hi-tech

Bloomberg estimates that China is already the largest supplier of technology to Russia: half of its PCs and smartphones and one-third of semiconductors imported into the country are made in China. This is set to grow with the latest round of Western sanctions in relation to the conflict in Ukraine.

In 2021, Russo-Chinese trade hit a record high with a trade turnover that gained 35.8%.

Generally, Russo-Chinese relations have also grown closer across the board – militarily, socioeconomically and through trade, according to experts.

According to Bloomberg, China is forced to find a balance of interests. In the past few years, Russia has become its key political partner and energy supplier. Western countries for China are a larger target for exports and a source of technology and investment.

Despite this relationship, the U.S. hopes for sanctions support from key Chinese companies, such as semiconductor manufacturer SMIC and Lenovo. These companies are still using U.S. equipment and may lose their licenses for it and new parts if they do not support the restrictions. However, the Chinese Foreign Ministry reiterated on February 28 that the country does not approve of the sanctions.

On Wednesday, the Wall Street Journal reported that China will not take part in Western financial sanctions against Russia.

The story is currently developing in light of the ongoing conflict in Ukraine.

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