Latest Research: China Supplies Russia's War Economy with Microelectronics

The Washington-based Center for Strategic and International Studies (CSIS) has for the second time since the start of the Russian invasion of Ukraine investigated how the Russian arms industry is supplied with goods from abroad

by Sededin Dedovic
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Latest Research: China Supplies Russia's War Economy with Microelectronics
© Pool / Getty Images

After appointing economist Andrei Belousov as the new Minister of Defense, Russian President Vladimir Putin traveled to visit Chinese President Xi Jinping. According to claims in a new American study, since 2023, China has become the most important supplier of microelectronics and machinery used for Russian weaponry.

Putin is showing his intention to further shape the Russian industry into a wartime economy. As early as the end of 2023, the German Council on Foreign Relations (DGAP) calculated in one analysis that in the worst-case scenario, the Western military alliance only had five more years to maintain its deterrence potential against a possible Russian attack on a NATO country.

The author of that study, Christian Melling, head of the Center for Security and Defense at DGAP, has now updated his analysis focusing on the strengthening of the Russian military in the war against Ukraine. "Putin is only living through this war," claims the German expert in an interview with DW.

"He needs the war because he has summoned so many spirits that may not be able to accept peace at all." Therefore, NATO's rearmament is directly linked to supplying weapons to those 50 nations, led by the United States, supporting Ukraine.

The American Center for Strategic and International Studies (CSIS) concluded in its study published in April that "Putin's ongoing and comprehensive military reforms" in the war against Ukraine indicate that "Russia may be preparing for conflict with NATO within the next two decades, including conventional warfare on a large scale." CSIS, based in Washington, reportedly close to the US arms industry, has investigated for the second time since the beginning of the Russian invasion of Ukraine how the Russian arms industry is supplied with goods from abroad and how it avoids Western sanctions.

This study was published under the title "State of the Russian Defense Industry after Two Years of War."

Russia circumvents Western sanctions

To do this, researchers analyzed publicly available data on the movement of goods into Russia, particularly microelectronics needed for missiles and so-called "gliding bombs." CSIS also tracked the trade of so-called CNC machines, or computer-controlled metalworking machines used for making artillery shells and other ammunition.

"The Russian defense industry has found ways to obtain what it needs to increase weapon production," concludes the analysis by American CSIS. "The Kremlin continues to rely on components imported through a complex network of intermediaries.

This has proven crucial for supplying the Russian military in Ukraine," the study assesses. According to these estimates, China became Russia's most important supplier as of spring 2023: "Almost all leading exporters of microelectronics are based in China and Hong Kong, with one company based in Turkey," the study notes.

Russian President Vladimir Putin, left, shakes hands with Chinese President Xi Jinping, right, during the Tsinghua Universitys c© Pool / Getty Images

Chinese exports of microelectronics to Russia sharply increased in March 2023.

At that time, Chinese President Xi Jinping visited Russian President Vladimir Putin in Moscow. "Russian imports of CNC machines from Chinese firms used for precise production of parts for various weapon systems, from ammunition to aircraft, also sharply increased in the months following the meeting between Xi and Putin in March 2023," CSIS notes.

The American think tank also published several graphs showing that between March and July 2023, companies from China and Hong Kong supplied Russia with electronics between 200,000 and 300,000 times each month.

Many drones for Moscow, few for Kiev

A particularly striking comparison is the delivered unmanned aerial vehicles: "Russia received unmanned aerial vehicles directly from Chinese trading companies worth at least $14.5 million, while Ukraine received only Chinese-made drones and components worth around $200,000, mostly from European intermediaries," the CSIS report states.

Some of the companies from China and Hong Kong that supply Russia also do business with Ukraine. And if these firms are under EU or US sanctions, then that creates a problem because trade restrictions can eventually affect Ukraine too.

Finally, American researchers concluded that "the Russian industrial sector has become entirely dependent on China when it comes to machines and components essential for weapons production." This is confirmed by investigations conducted in Ukraine, where Russian missiles, gliding bombs, and drones intercepted by Ukrainian air defense are dismantled into parts.

Since last year, the Ukrainian military has been finding Chinese electronics in Russian weapons, primarily, reports sanctions expert Vladislav Vlasijuk, working in the administration of the President of Ukraine. Unlike before the invasion of Ukraine, Russia is increasingly producing types of ammunition and weapons where Western high-tech components are entirely replaceable.

Primarily, this concerns gliding bombs and combat drones Shahid, which originally come from Iran. In this way, since the beginning of 2024, the Russian Air Force has been more successfully overcoming Ukrainian air defense, which, on the other hand, lacks Western missiles for defense, reports Deutsche Welle.

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