Almost 1,000 foreign companies in Russia have cut ties with the country since the invasion of Ukraine, albeit to varying degrees. However, 195 have done nothing at all, opting rather to maintain a business-as-usual approach. Of the latter, 20% are from China, making them the largest group to take no political action against Vladimir Putin.

These recent figures, courtesy of Yale University, are the latest evidence of China’s (not so) unambiguous support for Russia. As a result, Chinese companies face a very different set of pressures to those from Western countries.

Obstacles to Chinese companies withdrawing from Russia

Even if businesses from China wanted to pull out of Russia for ethical reasons, they would face serious sociopolitical obstacles. 

For example, ride-hailing app Didi was on the receiving end of a significant backlash from the Chinese public after announcing that it would withdraw from the Russian market on 4 March. Chinese people took to the internet to accuse the country of giving in to US pressure, a development that showcases a widespread support for Russia among the Chinese population. In fact, so squeezed was Didi, that the company actually made a U-turn and said it would continue operating in Russia.

In short, public support for Russia has left Chinese companies with little room to manoeuvre, as has Beijing’s uncritical stance towards Putin. The result is that, for companies such as Didi and Huawei, the safest course of action is inaction, while simultaneously avoiding any statements that are friendly to Russia, lest they get boycotted by Western companies or institutions. 

Other figures also showcase the extent to which Chinese companies have been the least active in leaving Russia. 

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Of the 200 or so companies that have completely halted Russian engagements or straight up exited the country, almost every single one is from Europe or North America. None are from China, except several major Chinese banks, such as ICBC, that essentially had no choice, since ongoing Western sanctions on Russia have effectively cut the country out of the international banking system, meaning major Chinese financial institutions have had to follow suit.

The data paints a very similar picture with regards to Indian companies, not least since New Delhi has remained very uncritical of Putin. Not only have very few Indian businesses cut ties with Russia completely, many have taken no action at all, as per the chart above.

The chart also lists many Western countries, so it would be disingenuous to not mention that companies from Europe and North America make up the majority of the notorious 'no action' group. This is an accumulative, regional figure, however, one that has actually decreased in number since the start of the Ukraine war, thanks to ongoing Western pressure on Western businesses. Meanwhile, the number of Chinese and Indian companies taking action has hardly grown.

In short, the future of investment to Russia is becoming all too clear. No longer will it be dominated by the West but by China (and maybe India too). This new dawn could last for decades should Putin, or a Putin-replica, not abandon his gratuitously violent foreign policy or atone for atrocities being committed in Ukraine. Even if Putin did this today, it would take years to rebuild Western businesses' confidence in Russia.