Ukraine invasion: Chinese tech firms face dilemma over Western sanctions on Russia
- Complying with Western sanctions on Russia would run counter to the Chinese government’s official policy of opposing such measures
- However, Chinese companies could find themselves subject to huge fines and penalties for breach of sanctions if they work with targeted entities
US sanctions on exporting hi-tech products to Russia are creating a dilemma for Chinese tech companies, from ride-hailing giant Didi Chuxing to smartphone vendor Xiaomi.
On the one hand, it is a tricky proposition to quickly comply with Western sanctions on Russia following its invasion of Ukraine as such a move would run counter to the Chinese government’s official policy of opposing sanctions while also angering pro-Russian domestic consumers.
For example, ride-hailing giant Didi Chuxing - currently subject to a cybersecurity probe by Beijing - had to revoke an earlier decision to exit Russia after the plan triggered controversy.
However, on the other hand it is difficult for Chinese companies to ignore sanctions and trade bans imposed on Russia as this could bring legal risks for their operations in the US and Europe.
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Burned-out military vehicles and destroyed shops after battle for Bucha on outskirts of Kyiv
Chinese companies could find themselves subject to regulatory fines and other penalties for breach of sanctions if they continue to work with targeted Russian entities, said Paul Haswell, Hong Kong-based partner at law firm Seyfarth Shaw.
