Lenovo and Xiaomi quietly leave the Russian market

Chinese technology companies Lenovo and Xiaomi are quietly refusing to do business in Russia under pressure from sanctions and suppliers from the United States, despite calls from Beijing to resist Western influence, writes The Wall Street Journal.

According to information from people familiar with the situation, Lenovo and Xiaomi are cutting off supplies to Russia. However, unlike many Western firms, the companies avoided public statements about Russia’s war in Ukraine or their business there, as Beijing opposes sanctions.

China’s technology exports to Russia fell sharply in March since February, with supplies of laptops falling by more than 40 percent, smartphones by almost two-thirds, and exports of telecommunications base stations by 98 percent, according to the latest Chinese government figures. The country’s trade with most of the world has also been disrupted by quarantine in Shanghai, which is home to most of China’s world exports.

The refusal came amid a wave of large-scale financial sanctions and export controls imposed by the United States and its allies on Russia following its full-scale invasion of Ukraine in late February. The United States is threatening to punish Chinese companies that break the rules.

According to people familiar with the matter, large American chip companies that are suppliers to Chinese companies are insisting on following the rules and preventing their products from entering Russia. Including in the framework of ready-made devices, because they can be disassembled in order to obtain the desired chips.

China’s trade ministry acknowledged last month that the sanctions disrupted China’s trade with Russia, but urged the company “not to be subjected to external coercion and to make inappropriate external statements.” China’s total exports to Russia fell by 27% from February to March, according to official trade data.

China has expanded its set of tools to counter foreign sanctions, including rules that could force Chinese companies not to enforce foreign sanctions, which it deems unjustified, although Beijing has not yet issued any such orders.