Xi Jinping realises he 'needs Moscow's support' says Bermann

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Several large Chinese tech companies are reportedly reducing shipments in Russia, according to people familiar with the matter. These include PC giant Lenovo Group Ltd and smartphone and gadget manufacturer Xiaomi Corp. Xiaomi sold the second most phones in Russia last year, but has now slashed its shipments to the country.

But these companies are yet to publicly announce these business decisions as Beijing has opposed the crippling Western sanctions slapped down on Russia.

While Russia was hoping that China could provide a trading lifeline as the West slashes ties, that dream appears to be withering away.

China’s exports of tech products to Russia plummeted from February to March, with laptop shipments being slashed by over 40 percent.

Smartphone shipments were also cut by nearly two-thirds.

And exports of telecom base stations saw a staggering decline of 98 percent, according to the most recently available Chinese government trade data.

These companies are yet to publicly announce these business decisions as Beijing has opposed the crippling Western sanctions slapped down on Russia.

China’s Ministry of Commerce last month blamed West’s sanctions on China’s disrupted trade with Russia.

But it urged companies “not to submit to external coercion and make improper external statements”, explaining their silence.

It came after the US threatened to punish China if it undermined its wide ranging financial sanctions or export controls slapped down on Moscow.

China has in return accused the US of creating “fear and panic” with its sanctions, and even claimed that the US was fuelling tensions by providing weapons to Kiev.

But Chinese President Xi Jinping does appears to be feeling the pressure over his close alliance with Vladimir Putin as the war in Ukraine continues to intensify.

That is because the tech sector is not the only area where China has been attempting to distance itself from Russia.

In March, Beijing finally acknowledged for the first time that a “war” is taking place in Ukraine.

Meanwhile Russia has banned the use of the word war in the media to describe its invasion of Ukraine – instead calling it a “special military operation”

China has also refused Moscow’s request for aviation supplies as Beijing distances itself from Moscow after Russia’s aviation sector was battered by Western sanctions.

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This also comes as China reportedly ordered a “stress test” to assess what would happen if the West’s Russia-style sanctions targeted its own economy too.

An extensive exercise reportedly took place began around late February and early March after the West slapped harsh sanctions on Russia.

A person familiar with the matter said: “Those involved in this exercise use how Russia was treated as a baseline for China’s own policy response should it be treated in a same fashion by the West.

“This stress test involves a range of methodology, including modelling.”

Chinese analysts have also told Beijing state media outlet The Global Times Russia has “strong capacity and resilience to withstand US and EU sanctions”.

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