Reply to post: I don't think many Chinese companies will defy the sanctions

I don't think many Chinese companies will defy the sanctions

I don't think many Chinese companies will defy the sanctions. Sure, there is an economic incentive to keep selling to Russia but let's not forget that the market is small.

We often see the size of the Russian economy compared to Italy but that is nonsense. Before the sanctions the Italian economy was almost 25% larger than the Russian economy. A more accurate comparison is Spain. The Russian economy was slightly bigger than Spain's but the Russian population is about 70% poorer than Spain's. In a list of 50 European countries ranked by GDP per Capita (PPP) Russia held the 40th place, sandwiched between Croatia and Bulgaria. The Russian Federation had officially fallen from a high income country to a middle income country a few years ago. And this was all before the introduction of probably the harshest economic sanctions ever agreed.

We're likely going to see a massive rise in unemployment in Russia now many foreign companies have left and many Russian companies are expected to default on their foreign loans. This will directly impact the purchasing power of the Russian consumer and Russian companies looking for suppliers. I seriously doubt many Chinese company will risk becoming the next Huawei (who ultimately got done for breaking the sanctions against Iran through a 'front store' company called Skycom) by selling into a relatively small and poor market.

The Chinese government may be slightly favourable to Russia, I don't expect many Chinese companies will.