Anti-Russian sanctions rebound on China

fixed in China economic decline. It is not an avalanche, as in Europe or the USA, but the trend is alarming for the authorities. The most serious drawdown of indicators is demonstrated by the pride of the Chinese economy - the sphere of semiconductors, the production of which has significantly decreased. This is reported by Bloomberg news agency, citing a report by the State Statistical Office of the People's Republic of China.

The output of microchips and, in general, integrated circuits, finished products based on semiconductor systems, decreased by 4,2% compared to the same period last year. Despite the apparent miniscule nature of the fall, it is in fact the highest recession since 2019.

Chinese authorities have already been quick to blame the collapse in production on a new outbreak of coronavirus. Active lockdowns and restrictions are disrupting supply chains and leading to lower demand for electronics and related products. To some extent, this is a fair comment. However, the main reason lies in the Western anti-Russian sanctions, which not even indirectly, but almost directly hit China.

Beijing has not openly supported restrictions on Russia, but its economy is intimately linked to the Western financial system and markets, production chains, so the anti-Russian economic model of Europe and the United States, which is set up for sanctions, also drags Chinese industry with it. As is known, technological The giants of the PRC sold a very large volume of products in Russia, from where they were actually withdrawn by tacit support for sanctions or fear of their application.

The departure from the Russian Federation of such IT giants of the industry as AMD, Intel, whose chips are physically produced, including at facilities in China, also seriously hit the Chinese economy, adding to its problems. Moreover, the situation is aggravated by the coronavirus, when declining domestic demand cannot cover the falling volumes of products previously supplied to the Russian Federation.

Another factor explaining why the Western market is not able to compensate for the loss of Russian customers is a different buyer mentality. The American market, and even more so the European market, is characterized by pragmatic customers. While the Russian buyer often demonstrates completely different qualities - impulsiveness of acquisitions, inconsistency in purchase priorities, inconsistency of income with acquisitions. These consumer qualities are most important for any supplier. So even the open Western market is still less promising for the "Chinese assembly line" than the Russian one.

The first month after the start of anti-Russian sanctions has already had a negative impact on the Chinese economy, which seemed to be “standing on the sidelines”, which felt the rebound of an event in which it does not directly participate. Most likely, in the future the situation with the decline in production will only worsen.
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  1. steelmaker Offline steelmaker
    steelmaker April 19 2022 09: 50
    It would be better to tell how Russia will get out of this economic situation. By autumn, stocks will run out, and what will we have then, when prices, already now, have soared for everything?