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(Bloomberg) -- Washington is expected to lean on major Chinese companies from Semiconductor Manufacturing International Corp. to Lenovo Group Ltd. to join U.S.-led sanctions against Russia, aiming to cripple the country’s ability to buy key technologies and components.
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China is Russia’s biggest supplier of electronics, accounting for a third of its semiconductor imports and more than half of its computers and smartphones. Beijing has opposed the increasingly severe measures that the U.S. has taken to restrict Russia’s trade and economy in response to its invasion of Ukraine, however U.S. officials expect tech suppliers such as SMIC to uphold the new rules and curtail trade of sensitive technology with American origin, especially as it relates to Russia’s defense sector.
Any items produced with certain U.S. inputs, including American software and designs, are subject to the ban, even if they are made overseas, a U.S. official told Bloomberg News on Monday. Companies that attempt to evade these new controls would face the prospect of themselves being cut off from U.S.-origin technology and corporate executives risk going to jail for violations.
Consumer electronics such as Apple Inc. iPhones and laptops for personal use are not affected.
Foreign companies have taken rapid steps to pull out of Russia in the wake of its military aggression, reversing three decades of investment by Western and other overseas businesses following the collapse of the Soviet Union in 1991. Oil firms BP Plc, Shell Plc and Equinor ASA each announced plans to withdraw from partnerships and projects in Russia and the U.S. government has promised incentives for “countries that adopt substantially similar export restrictions” in a push for multilateral cooperation.
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Russia gets 70% of its supply of chips, computers and smartphones from China, according to Mary Lovely of the Peterson Institute for International Economics, citing 2020 data from the United Nations International Trade Statistics Database. On Monday, China’s Foreign Ministry again voiced its disapproval of sanctions.
“China doesn’t approve of resorting to sanctions to try to resolve problems, even more we oppose illegal, unilateral sanctions without an international mandate,“ Foreign Ministry spokesman Wang Wenbin said at a regular press briefing in Beijing. He added that nations “should not harm the legitimate rights and interests of the Chinese side.”