China provides warfare parts, helps Russia evade sanctions, U.S. intelligence says

China provides warfare parts, helps Russia evade sanctions, U.S. intelligence says
by Adam Schrader
Washington DC (UPI) Jul 27, 2023

China has become an "even more critical" economic partner for Russia, providing it with military equipment and helping the regime evade sanctions tied to the invasion of Ukraine, U.S. intelligence officials said in a report published Thursday.

The Office of the Director of National Intelligence provided an unclassified report to the House Permanent Select Committee on Intelligence, published by Democrats on the committee.

The 9-page report was compiled by ODNI as directed by lawmakers in the Intelligence Authorization Act for Fiscal Year 2023.

Among the most alarming revelations in the report is that intelligence officials believe China has been providing navigation equipment, parts for fighter jets and other equipment to Russian defense companies, including more than $12 million in drones and drone parts.

China Poly Technologies, a company owned by the Chinese government, has shipped navigation equipment for M-17 military transport helicopters, intelligence officials said, citing reports in the news that interviewed arms analysts.

The report noted that Russian President Vladimir Putin and China's Defense Minister Li Shangfu met in Moscow in April and called their partnership "boundless."

"The United States' Intelligence Community has played a pivotal role in anticipating the perils, seen and unseen, that Ukraine faces as Russian forces continue their violent assault," said Rep. Jim Himes, D-Conn., in a statement.

"This unclassified assessment, mandated by last year's Intelligence Authorization Act, details the extent of China's support for Putin's ongoing invasion. Russia's war against Ukraine has been enabled in no small part by China's willingness to support them, in direct and indirect ways."

Himes added he hopes the report "makes clear" to China that the United States will know if they take further actions to enable Putin's unprovoked invasion of Ukraine.

Russia has sought assistance from countries including China, officially the People's Republic of China, to obtain military equipment and diversify energy exports to skirt Western sanctions, officials said.

China is engaged in "hefty" buying of steeply discounted oil from Russia, with imports increasing 13% to $76 billion in 2022. The revenue is a boost to Russia particularly after the Group of Seven imposed a $60 price cap on Russian crude oil in December.

When accounting for all energy imports, including coal and natural gas, China spent $81 billion on Russian imports - an increase from $52 billion the year prior -- while receiving discounts of about 13.7% per barrel of crude oil.

"Total bilateral trade between [China] and Russia hit a record high level of $190 billion in 2022, which is a 30% increase from 2021," the report reads.

Russia and China have agreed to build a new pipeline, the Siberian Power 2, to funnel in more natural gas to Russia's economic benefactor and China is providing supertankers and insurance coverage to move Russian oil to its ports.

The Chinese government will even ask reluctant insurers in the country to insure the tankers shipping the Russian crude oil, intelligence officials believe.

Meanwhile, China is hiding its sales of computer chips to Russia through shell companies established in Hong Kong - though 84,000 shipments were recorded by Russia's customs office in February.

Intelligence officials said it remains difficult to understand just how much China has helped Russia evade sanctions and export controls imposed by the West.

Officials believe China's exports of semiconductors to Russia increased 19% between January and September 2022, compared to the same period the previous year.

"U.S. export controls against Russia apply not only to U.S.-origin commodities, software and technology, but also to certain items produced abroad to the extent such items generally incorporate controlled U.S. content or are produced with U.S. software, technology or production equipment," the report reads.

"This makes it more difficult to accurately track circumvention and evasion of export controls although the PRC's firms probably are assisting Russia in circumventing and evading export controls."

Intelligence officials admitted that they do not have enough information to assess whether Beijing is "deliberately" inhibiting U.S. government export control end-use checks in China.