Shipments of semiconductors and other restricted goods through China and Hong Kong to Russia have decreased by 20% this year, according to the U.S. Commerce Department. However, Hong Kong remains a significant hub for evading sanctions, with transshipments of advanced components falling by 28% and those through mainland China dropping by 19%.
The U.S. and its allies accuse China of supporting Russia’s war in Ukraine by exporting necessary parts and equipment to Moscow. In response, the U.S. has imposed sanctions on entities with links to Russia’s military, including shell companies in Hong Kong. Companies like Nvidia, Texas Instruments, and Intel have stated they comply with U.S. export regulations and oppose the use of their products in Russian military equipment.
Data from C4ADS shows over 200 Hong Kong firms shipped nearly $2 billion in goods to Russia between August and December 2023. Some of these goods, including high-end chips, were sent to sanctioned Russian firms. The ease of setting up companies in Hong Kong has facilitated restricted trade, with many offices found to be shuttered or just empty rooms filled with registry letters.
