Page 128 - bneIntelliNews monthly country report Russia May 2024

9.1.13 Other sector news
Russian electronics manufacturers have big problems, writes Kommersant. Payments for components and assembly kits from China have stopped going through completely since the end of March, which means a disruption in deliveries and a stop in production.
The first critical difficulties with paying for electronics through Chinese banks, including in yuan, began in December after the strengthening of secondary US sanctions and concerned finished products. Now they have spread to components for servers, data storage systems, laptops and other electronics. The blockages are strict and even affected companies that worked under long-term contracts with Chinese suppliers.
Changing the Chinese partner bank doesn't work either. “In December 2023, the American regulator gathered the heads of Chinese banking organisations and threatened to impose sanctions against them if they discovered cooperation with Russian legal entities,” explains Vitaly Mankevich, chairman of the Russian-Asian Union of Industrialists and Entrepreneurs (RAUIE). “Therefore, the prospects are not bright yet.” The problem is not limited to IT products. According to Yulia Shlenskaya, president of the customs and logistics operator KVT, payments to China do not currently reach more than half of the importers. This does not depend on whether the goods are sanctioned or on the sending or receiving bank. Shipments of goods from China have fallen by about three times, she says, and reliable payment schemes have not yet been found.
Russian electronics manufacturers are in the worst position because they have nowhere to look for replacements - almost 100% of the world's assembly kits are made in China. While the market is looking for circuits, electronics production in Russia may stop for six months, “since in the next two to three months there will be no shipments of components and assembly kits to any Russian manufacturer,” says a market source.
128 RUSSIA Country Report May 2024 www.intellinews.com