For most countries, a division of labor and reliance on imported components are perfectly normal. Italy does not make microchips, but it turns out world-class machine tools. Switzerland does not launch rockets, but it produces instruments of unmatched precision. France does not assemble iPhones, but it builds jet engines. In Russia’s case, however, a policy of isolation and a focus on raw-material exports have hollowed out much of the country’s high-tech manufacturing sector. After the official withdrawal of Western industrial firms due to international sanctions, this translated into near-total dependence on China.
China’s machinery, metalworking, and electronics industries are now so deeply intertwined with Russia’s that Beijing has emerged as both the chief beneficiary of the war in Ukraine and, paradoxically, as the outside power most capable of putting an end to it — simply by stopping the supplies.
So, what exactly is Russian industry missing?