Chinese drone giant DJI suspends operations in Russia and Ukraine | Russo-Ukrainian War

DJI, the world’s largest drone maker, has announced it is temporarily suspending operations in Russia and Ukraine, in a rare example of a Chinese company suspending operations in response to the war in Ukraine.

“DJI is internally reassessing compliance requirements in various jurisdictions,” the Shenzhen-based company said in a statement on Wednesday.

“Pending the ongoing review, DJI will temporarily suspend all business operations in Russia and Ukraine.”

The company, founded in Hong Kong in 2006, added that it was “engaging with customers, partners and other stakeholders regarding the temporary suspension of business operations in the affected territories”.

DJI’s announcement comes after the company last month denied leaking Ukrainian military information to Russia, saying a German retailer that pulled its products from shelves had been “subjected to what appeared to be a coordinated campaign making false allegations”.

Last week, DJI reiterated that its products were intended for purely civilian use, saying its partners pledged not to sell its products to “customers who clearly plan to use them for military purposes, or to help to modify our products for military purposes”.

“We will never condone the use of our products to cause harm, and we will continue to strive to improve the world through our work,” the company said in a statement.

The Ukrainian military used DJI drones extensively for reconnaissance during the conflict, while images and footage from the battlefield suggest Russia also deployed drones made by the company.

DJI drones were used by both sides in the Ukraine war [File: Edgar Su/Reuters]

Charles Rollet, an analyst at IPVM monitoring research group, said DJI’s move likely reflects the consumer pressure the company has faced in Europe over claims it helped the war effort. Moscow.

“DJI is a Chinese state-backed company, but it wants to be seen as a neutral global manufacturer, so the Russian invasion has brought unprecedented scrutiny against it, and I think DJI is extremely concerned about being seen as an agent of Beijing,” Rollet told Al. Jazeera.

“But they also do it without concretely supporting Ukraine either. So in this way they are also in line with the position of the Chinese government. And if you look at their statement, it’s very laconic. He used the word “hostilities” rather than war or invasion.

Rollet said DJI’s announcement could provide an example for other Chinese companies concerned about the reputational cost of dealing with Russia.

“I think other companies could follow and they will probably use this model, instead of condemning the invasion and withdrawing from Russia only, they will probably condemn the “hostilities” in a generic way, although Russia clearly be the aggressor and withdraw from both markets,” he said. mentioned.

While hundreds of companies have suspended or reduced their operations in Russia amid Western sanctions and censorship, major Chinese companies such as Alibaba, Didi, Huawei, Lenovo and Tencent have continued to make business in the country. Three China-based banks – the Bank of China, ICBC and the Asian Infrastructure Investment Bank – are the only Chinese entities among the 466 companies that have walked away from the country since the February 24 invasion, according to a recent analysis. of Investment Monitor.

Last week, Russian media outlet RBC reported that Chinese company UnionPay had also stopped cooperating with major Russian banks, fearing it could be identified by secondary sanctions.

China-Russia relations

Beijing declined to explicitly condemn the invasion of Moscow and expressed sympathy for Russian President Vladimir Putin’s alleged security concerns while calling for “maximum restraint” and peace talks between the parties.

While Chinese President Xi Jinping and Putin have forged close ties and said their countries’ friendship has ‘no bounds’, analysts say Beijing remains cautious about openly violating sanctions to help its partner strategic.

Alicia García Herrero, chief economist for Asia-Pacific at Natixis in Hong Kong, said DJI’s decision to suspend operations in Russia likely reflects concerns over non-compliance with secondary sanctions focused on dual technology. usage, which could cover the use of semiconductors from South Korea or Taiwan. , or transactions made in US dollars.

“There are all these possibilities that make any export of drones to Russia a big risk,” García Herrero told Al Jazeera, adding that China “cannot afford” to breach sanctions at a time when its economy is slowing and foreign investors are retreating in large numbers.

“And actually, out of the various sanctions risks, I’d say that’s really the biggest. China’s exports to Russia of military-civilian fusion technology. That’s the easiest way to catch them. .

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