Chip Imports: The Flow from China to Russia via Central Asia

admin

Xuất khẩu hàng hóa lưỡng dụng của Trung Quốc sang Kazakhstan đã tăng mạnh kể từ khi xung đột ở Ukraine.

Nga is increasing its import of dual-use goods, such as unmanned aerial vehicles (UAVs) and computer chips, from the United States. These imports are being funneled through Central Asian trade routes, as reported by the Wall Street Journal (WSJ).

Despite efforts by Western nations to cut off these supply routes, Nga continues to receive sanctioned goods through third-party countries or direct purchases from friendly nations. With foreign-sourced materials and components, like imported microchips, Russia is able to manufacture missiles, UAVs, and more, amidst the conflict in Ukraine.

Kazakhstan and Kyrgyzstan have become important “supply channels for Nga,” thanks to their long borders and bilateral business activities. These channels primarily source goods from China, a major economic and political partner of Russia. WSJ reports that some of these goods are manufactured by American companies.

“The Central Asian trade route is particularly important as it supplies a large volume of Western-made goods to Nga,” noted Natalie Simpson, an analyst specializing in Russia at C4ADS, a nonprofit research company focused on national security based in Washington. She emphasized that this route is crucial not just for military products but also for consumer goods, including car parts and luxury items.

The United States and its allies have imposed sanctions on a list of dual-use goods, which includes computer chips, routers, and bearings used in tanks.

Customs data reveals that the exports of 45 sanctioned items from Western nations, originating from China, to Kazakhstan and Kyrgyzstan increased to $1.3 billion in 2023, a 64% rise from the previous year. For instance, in June 2023, seven shipments of “computer equipment,” considered dual-use goods, were sent from a subsidiary of International Business Machines in China to a trader in Bishkek, the capital of Kyrgyzstan. These shipments, valued at $3,700, were further transferred to OOO BSO, a Russian company on the U.S. Treasury Department’s blacklist.

Read more:  Rare Total Solar Eclipse in 45 Years Expected to Generate $6 Billion Boost to US Economy

Unmanned aerial vehicles, which are not on the sanctioned list, are also being imported in large quantities to Nga through Central Asia. WSJ reports that Kazakhstan bought UAVs worth $5.9 million from China last year and exported them to Nga for $2.7 million. Kazakhstan is not a major producer of UAVs.

Central Asian countries are not the only route through which Nga procures sanctioned goods for military purposes, as entities in countries like Turkey and the United Arab Emirates also help Nga bypass the sanctions.

In December of last year, the National Anti-Corruption Bureau of Ukraine revealed that nearly three-quarters of the approximately 2,500 foreign components found in Russian weapons were manufactured by American companies.

The diversion of trade from China through Central Asia has become increasingly important as U.S. and EU regulatory agencies tighten control over their chip exports. In 2022, the first year of the conflict, the value of chip exports from the U.S. and EU to Nga via Kazakhstan, Kyrgyzstan, and Armenia reached millions of dollars. However, in 2023, chip exports from the U.S. and EU to these countries dropped by 28% to around $22 million.

U.S. and European officials have been pressuring these countries and China to regulate their underground trade operations with Nga, intensifying efforts to prevent Nga from evading sanctions through third parties.

Business Today