China has reduced shipments of smartphones, laptops and other technologies to Russia

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China’s technology exports to Russia declined in March after the US-led embargo took effect, US Commerce Secretary Gina Raymondo said on Tuesday, calling it a sign of Beijing’s warning about violating trade sanctions.

Chinese shipments of laptops to Russia fell 40 percent in March compared to February, when smartphone exports were down two-thirds, he said, citing recently available Chinese trade data. Exports of telecommunication network equipment declined by 98 percent.

Whether China is willing to help Russia withstand sanctions is an open question for Western policymakers. Export figures, previously reported by the Wall Street Journal, suggest that Beijing was reluctant to break the rules, at least initially, perhaps for fear of US retaliation, which could limit sales of the technology to Chinese companies.

To impose sanctions on Russia, global companies must comply with sanctions if they use US manufacturing equipment or software to make computer chips, also known as semiconductors. Analysts say most chip factories around the world, including in China, use software or equipment designed in the United States.

“I am often asked, do you know what these export controls are? And I think the answer is a resounding, unequivocal yes, “Raymondo said.” I think they’re working because we have a strong alliance of countries around the world that are participating in the implementation. “

The computer chip industry has cut off supplies to Russia in response to US sanctions

The United States and 37 other countries designed trade sanctions to cripple Russia’s military and high-tech economy after the country’s invasion of Ukraine. The rules prohibit the sale of computer chips, telecommunications equipment, lasers, avionics and marine technology to many Russian buyers.

There are indications that sanctions are undermining Russia’s ability to make at least some military equipment. Last week, Raimondo told a Senate committee that Ukrainian officials had reported finding computer chips for household appliances in Russian military gear. A spokesman for Raymondo later clarified that the temporary chips were found in the tanks.

Douglas Fuller, a semiconductor specialist at City University in Hong Kong, says it’s less strange than it may seem. A type of semiconductor known as a microcontroller is used to control various functions in both machinery and motor vehicles. Since tanks are primarily armored vehicles, chips can probably be used to control the same function in cars as braking and steering, he said.

U.S. officials say the export ban is not intended to block the flow of consumer goods into Russia. Trade lawyers say, however, that some companies have stopped supplying electronic products to Russia altogether, regardless of whether the individual items violate the rules.

“Many companies are stopping exports to Russia. Period, ”said Kevin Wolf, a former senior trade official who is now a partner at Akin Gump Strauss Hower & Field.

This is in stark contrast to the views of Western technology companies on US rules prior to banning technology exports to Chinese telecommunications maker Huawei, which the United States has accused of threatening US national security. In that case, the computer-chip makers and other companies asked their lawyers to roll out the rules to determine which sales are still approved.

“Attacking and killing people in a foreign country obviously has more impact than a company’s policy-based decision. [in Huawei’s case] Was described as a broader national security threat, “said Wolf.

He added that for some technology exporters, selling to Huawei was probably more risky than selling to all of Russia.

The United States, South Korea and even China – all major technology companies have said they will suspend or suspend sales in Russia for the war.

China’s DJI, the world’s largest commercial drone maker, said in April that it was suspending operations in Ukraine and Russia, becoming the first major Chinese company to publicly leave the market for a war the Chinese government has refused to condemn.

Apple said in March that it was suspending sales of all products in Russia. A few days later, Samsung suspended all products, including smartphones and computer chips.

Apple, Samsung and China’s Xiaomi were the top three Russian smartphone companies in the first quarter, according to the latest data from the International Data Corporation (IDC).

Xiaomi did not immediately respond to requests for comment from Russian buyers.

Even if some technology companies do not sell directly to Russia, their products can still be made there through the gray market, says Nabila Papal, research director at IDC’s Global Device Market.

“Intelligent traders will find a way to get them to enter,” he said.

Raymondo said exports from various countries to Russia have fallen sharply. US shipments to the technology sector fell 86 percent, subject to export controls. He said South Korea’s exports to Russia fell by 62 percent and Finland’s by 60 percent.

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