Chinese tech companies are leaving Russia. According to information from people familiar with the matter, this withdrawal from the Russian market is due to the crippling sanctions that the international community imposed on the region after the invasion of Ukraine.
Tech, some in the smartphone market, believe that penalties, especially when it comes to financial transactions, are a major impediment to brands’ profitability.
China pressures domestic companies not to leave Russia
Tech companies like Lenovo Group Ltd. and Xiaomi Corp. restrict orders to Russia as sanctions complicate financial operations in the country, sources say The Wall Street Journal.
Although there is already strong evidence, several Chinese companies have avoided publicly announcing the reasons not to bet on Russia. Indeed, the Chinese government is pressuring companies to fight Western sanctions.
China's Ministry of Commerce told companies in April that they "should not submit to external coercion and make inappropriate external statements", according to the Journal.
SZ DJI Technology Co. is one of the few Chinese companies to have said it will stop doing business in Russia and Ukraine until further notice. After Russia invaded Ukraine, there was an exodus of Western companies condemning the Russian attack.
However, Chinese companies have a hard line to follow, as China is one of the few countries to stand with Russia. The Asian giant refused to blame Russia for the war and condemned the West's response to Russia's isolation.
Despite Western condemnation, companies have had to work to stay compliant as U.S. chip companies have threatened not to supply Chinese companies if they fail to comply with international sanctions, the WSJ noted.