"How much are drone coils these days?": The Insider and Nordsint go undercover to reveal how Chinese firms supply Russia’s defense industry

This is a joint investigation by Nordsint and The Insider.

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Identifying the main international sources of equipment and spare parts for the Russian military is no easy task for investigative journalists. Standard trade and customs databases often list intermediary companies and logistics firms, rather than manufacturers or actual sellers. This lack of transparency allows international suppliers to plausibly deny their involvement in the trade of sanctioned goods, making it virtually impossible to determine to what extent companies are knowingly collaborating with the Russian defense sector.

However, by contacting manufacturers directly (albeit under a pseudonym), we managed to obtain compelling evidence that several Chinese companies’ shipments to the Russian defense industry were intentional. In conversations with these manufacturers, Nordsint presented itself as a potential Russian client, explicitly stating that the components being purchased were intended for military purposes. This never seemed to bother the suppliers. The Insider examined data on these Chinese companies’ previous transactions, contained in customs and trade registries.

Although the supply of drones and components is officially prohibited by Chinese law, sellers use convoluted financial schemes to meet the demand of the Russian defense industry. When supplying military equipment, some of the Chinese firms we investigated accept payment in yuan through the Shanghai branch of Russia’s VTB Bank or conduct transactions in USDT (Tether), a cryptocurrency pegged to the U.S. dollar. In this way, they are able to circumvent Western financial sanctions. Other firms use the services of Chinese and Hong Kong banks: China CITIC Bank, DBS Bank, Ping An Bank, China Zheshang Bank, and Bank of China Nanjing.