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Chronicle of world’s economic war against Russia: Chinese companies are quietly reducing their business

Chinese business prefers not to make official statements about its position on the conflict in Ukraine

Chinese business prefers not to make official statements about its position on the conflict in Ukraine

After attacking Ukraine, Russia has faced economic problems and sanctions from a lot of countries and international organizations. In the Russian Federation itself, the authorities call it an economic war. The EU is close to agreeing on a sixth package of sanctions. Food inflation in Russia reached 20%. Chinese companies reduce business in Russia without statements.

The Page has prepared a compilation of the latest reports on economic and social problems in Russia as of May 7th.

Economic downturn in Russia over war

Inflation in Russia during the week from 23 to 29 April amounted to 0.2%, compared to April last year, prices increased by 17.7%. At the same time, the growth in prices for food products (year-on-year) amounted to 19.9%.

Telecommunications holding VEON acknowledged reputational damage over the fact that its main shareholder, LetterOne investment company, is affiliated with Mikhail Fridman and Petr Aven, who were sanctioned by the West. The holding owns telecom assets in Russia, Ukraine (Kyivstar), Kazakhstan, Pakistan, Bangladesh and other countries, but Russian VimpelCom generates half of its consolidated revenue.

Finnish chemicals manufacturer Kemira is leaving the Russian market and halting operations in the country. The company mainly manufactures chemicals for the paper and pulp industries, for wastewater treatment, and for the oil and mining industries.

Yandex has changed the name of its Finnish subsidiary to Global DC Oy. It manages the data center, which last week was disconnected from the grid and switched to work on diesel generators. Finnish energy companies do not want to supply the data center with energy, and the authorities are closely monitoring the company.

Major Chinese companies, without public statements, have begun to wind down the work with Russia over the sanctions. Supplies are being cut, for example, by Lenovo and Xiaomi. Although the Chinese leadership condemns unilateral sanctions, businesses are trying not to violate them over the threats from Western countries and pressure from suppliers.

The Austrian Raiffeisenbank claims it has cut off relations with a number of Russian banks. The banking group stressed that the decision would not affect Russian business. It allocated 319 million euros for possible losses in connection with the "special operation" in Ukraine.

After the legalization of parallel imports in the Russian Federation, the cost of equipment for the end consumer may increase by up to 50% compared to the cost of goods before the start of the "special operation". Goods will have to be imported through Kazakhstan, China, Kyrgyzstan, and Armenia.

Sanctions against Russia

On May 8, the leaders of the G7 countries will discuss new sanctions against Russia. These countries can adopt some of the ideas from the sixth EU sanctions package and announce measures by May 9th. President Volodymyr Zelenskyy is expected to attend the meeting.

The EU proposed to extend the delay on the embargo on Russian oil imports for Hungary, Slovakia, and the Czech Republic. These countries previously refused to agree on a new package of sanctions against Russia, referring to their greater dependence on its energy resources. Bulgaria also tried to get special conditions for itself, but was refused.

Russia's isolation

The International Gas Union (IGU), of which Gazprom is a member from Russia, has suspended any participation of Russian companies in its activities. In this regard, the Korean Gas Union, hosting the MGK in 2022, cannot enable the further participation of the RF entities in the MGK-2022: neither for speeches, nor for the participation of delegations or for participation in the exhibition or sponsorship. Interfax agency journalists were denied accreditation as well.

The Appeal Chamber of the FIDE Ethics & Disciplinary Commission rejected the appeal filed by the Russian Grandmaster Sergey Karjakin. On March 21, he was disqualified for six months over his support for the Russian aggression against Ukraine.

The International Tennis Federation suspended the membership of the federations of Russia and Belarus.

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