China remains a key enabler of Russia’s military-industrial complex, supplying high-tech electronics and industrial tools as Western sanctions limit its access to critical technologies. This thematic report provides a detailed analysis of China’s role in sustaining Russia’s war machine and is part of a broader study on the Russian military-industrial complex.

Russia’s reliance on China for battlefield goods has increased, while the EU’s share declined from 2021 to 2023. In 2021, the EU and China (including Hong Kong) each accounted for 41% of battlefield goods supplied to Russia by monetary value. By 2022, the EU’s share dropped to 13%, while China and Hong Kong’s share increased to 68%. By 2023—the first full year under the new sanctions regime—the EU’s share declined further to just 2%, while China and Hong Kong supplied 76% of battlefield goods. Despite not providing lethal aid, China has become Russia’s primary source for military-use goods, facilitating 90% of all battlefield goods imported by Russia in 2023.

China is a key supplier of critical inputs to Russia’s military-industrial complex through three main channels. First, Chinese producers replace Western goods, accounting for 49% of battlefield goods imports in 2023. Second, Chinese intermediaries re-export Western-manufactured goods, representing 18%. Third, Western companies manufacture goods in Chinese factories, and this offshore production accounted for 16% of battlefield goods imports to Russia. Each of these channels imposes significant costs on the Russian economy. Chinese substitutes often lack quality, while re-exported Western goods come with higher transaction costs to bypass sanctions and export controls.

Moreover, China has become a near-exclusive supplier to Russia in several key component categories, enabling its military-industrial complex to sustain and expand despite sanctions. 

Imports of electric devices surged by over a third after Russia shifted to a war economy in Q3 2022. Metal-cutting tools, including CNC machines, underscore Russia’s even stronger industrial dependence on China. These machines incorporate Western components and technology, often produced by unsanctioned Chinese firms. Other critical categories include optics, sourced almost entirely from China, and radio and communication equipment—both crucial to Russia’s military sector.

To circumvent sanctions and redirect restricted goods, Russia relies on unscrupulous distributors and front companies in third countries, including China. Western firms continue sales as long as first-level distributors are not blacklisted, even if linked to sanctioned entities. Weak enforcement and limited compliance incentives keep these loopholes open, enabling Russia’s access to restricted technologies.

China’s increasing role as a supplier to Russia’s military-industrial complex highlights Moscow’s growing dependency amid Western sanctions. To curb Russia’s access to critical military technologies, strengthening enforcement and closing sanctions loopholes is essential.

This analysis is part of KSE Institute’s broader research on Russia’s military-industrial complex. More details are available in the full report: https://t.ly/dl_D3