Is this more of Beijing playing both sides against the middle, or a signal that China may regret its support of Vladimir Putin? The largest manufacturer of commercial drones has “suspended” operations in both Russia and Ukraine. Shenzen-based DJI claims that this reflects the company’s principles rather than taking sides, but …
Chinese drone-maker DJI, the world’s largest manufacturer of commercial drones, has suspended operations in Ukraine and Russia, becoming the first major Chinese company to openly quit the markets over a war that the leadership in Beijing refuses to condemn.
The privately owned Shenzhen-based company said in a statement on Tuesday that it was undergoing an internal compliance assessment and would temporarily halt activity in both countries pending an outcome. It was unclear what triggered the decision, which a company spokesperson told Chinese media was “not a statement targeting any particular country but rather a statement about our principles.” …
President Vladimir Putin’s invasion of Ukraine has put many Chinese companies in a bind. Beijing’s official position is to claim neutrality while maintaining rhetorical support for Russia and a normal economic relationship with its burgeoning geopolitical and trade partner — a potential lifeline for the Russian economy under the pressure of sanctions from the United States and its allies.
But for Chinese conglomerates with international reach, continuing to do business in Russia could mean losing access to far more important markets in Europe and North America if they end up being targeted by secondary sanctions from Western governments. Most Chinese companies with a presence in Russia have chosen to stay silent about their plans, while some have quietly adjusted operations to minimize exposure to the Russia market.
Last month, Ukraine’s vice-PM urged DJI CEO Frank Wang to stop doing business with Russia, alleging that DJI drones were being used as targeting devices for Russian missiles. Other Ukrainian officials have accused DJI of tweaking their drone platforms to allow Russian operators to evade anti-aircraft systems. DJI had consistently denied those allegations, claimed that there was no military purpose for their product, and that they would enforce provisions to ensure that they didn’t get used for that purpose:
DJI has rejected claims that it leaked data on Ukraine’s military positions to Russia, after German retailer Mediamarkt cited Russia’s use of DJI drones in the war as a reason it removed the company’s products from its shelves.
Last week, DJI said in a statement that its drones are not marketed or sold for military use. It said it “unequivocally opposed attempts to attach weapons” to its products.
“We will never accept any use of our products to cause harm, and we will continue striving to improve the world with our work,” the company said.
A week later, DJI has halted its Russian operations. Why? Perhaps they discovered that Russia was indeed using their systems for those purposes. Or maybe DJI knew it all along, but the risk of exposure got too high and risked a loss of access to Western customers and more importantly Western banking systems. It could also reflect a change in direction in Beijing, as the mounting atrocities and threats of nuclear retaliation from Putin and Sergei Lavrov could have become too embarrassing for Xi Jinping.
Whatever the cause, the decision to halt operations in both Ukraine and Russia will not have an equal impact. Ukraine is getting drones and munitions from NATO members, both of which are more suited to the military operations that Ukraine needs to maintain its defenses against Russian troops and artillery than DJI drones would be. Russia will have to rely more on its own manufacture of such drones, as they don’t have ready supplies from other allies. If they were indeed using the DJI platforms for those purposes, then maybe Russia simply doesn’t have readily available domestic supply for drone operations, which would be yet another big gap in their military readiness.
Speaking of which …
This is remarkable. The poor performance of Russia‘s air force and the strong resistance by Ukraine‘s air defenses and air force have been major surprises. https://t.co/PKzaDIKDaT
— Frederik Pleitgen (@fpleitgenCNN) April 27, 2022
The drone gap will only make this worse. The fact that China is apparently allowing that drone gap to grow does make it appear that Xi and his regime might have some belated buyer’s remorse. As they should.