While some Chinese companies exit Russia, Huawei remains a question mark

A new report from the Wall Street Journal indicates that some Chinese companies – including PC maker Lenovo and smartphone supplier Xiaomi – are moving out of Russia. That's a noteworthy development considering that some in the industry expected the opposite to happen, given the relatively tight economic relationship between China and Russia.

However, according to the WSJ report, at least one Chinese company may still be active in Russia: Huawei. The publication reported that Russian telecom operator Beeline, owned by Dutch company Veon, said it received a delivery in March of telecommunications equipment from Huawei. That's noteworthy in light of the rumor that Huawei furloughed its staff in Russia.

MegaFon is an operator in Russia. (Source: Aleksey Zotov / Alamy Stock Photo)
MegaFon is an operator in Russia.
(Source: Aleksey Zotov / Alamy Stock Photo)

In responses to questions from Light Reading on Friday, Huawei officials reiterated their previous statement on the Russia-Ukraine conflict:

"Our hearts go out to the people who are suffering as a result of this conflict. Many countries are actively looking for solutions. Just like everyone else, Huawei hopes to see a ceasefire and an end to the conflict as soon as possible. We believe that the leaders of the countries involved will soon resolve this crisis, and then the business environment will return to normal," the company said in a statement. "We have noticed that some countries and regions have responded with certain policies and sanctions, but it's a complex and constantly changing situation. We are evaluating the impact of related policies. It is Huawei's policy to comply with applicable laws and regulations of the countries and regions in which we operate."

Nonetheless, the issue remains an important one considering that Ericsson and Nokia have exited the Russian market. That leaves Huawei as the only big vendor that could still supply mobile network operators in the country with critical equipment.

Huawei, of course, has been the subject of strict US-led sanctions designed to curtail its business on a global scale. The WSJ reported that Lenovo and Xiaomi may be exiting Russia due to rules that forbid US chip suppliers from supporting products that might end up in Russia. Huawei has already faced these kinds of restrictions, and has been feverishly working to sidestep them, in part by using domestic Chinese chipset suppliers.

The WSJ reported that China's overall exports to Russia fell 27% in value from February to March. China's Ministry of Commerce last month acknowledged the effect of the West's sanctions against Russia, but urged Chinese companies "not to submit to external coercion and make improper external statements."

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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