Asian Companies Defy Sanctions: Navigating Russias Market Landscape Amid Global Tensions

Numerous Asian enterprises persist in their operations in Russia, navigating through ongoing international sanctions that have followed the full-scale invasion of Ukraine.

These companies are striking a complicated balance between profit generation, geopolitical considerations, and risk management. Their continued presence illustrates a clear contrast between the Western corporate exodus during wartime and the strategic commercial approach adopted by Eastern businesses.

Japan Tobacco, which is a third owned by the Japanese government, remains operational in Russia, as highlighted by a list compiled by Yale CELI. Although the company has openly halted new investments and advertising efforts, its essential business activities are unaffected, with approximately 20% of its income derived from Russian ventures, according to the CEO’s disclosures to the Financial Times in May 2024.

The company employs over 4,000 staff at its four factories across Russia and has adjusted to the sanctions by diverting its logistics channels through Turkey and reallocating senior management roles to Hong Kong.

In August 2023, Ukraine’s National Agency on Corruption Prevention (NACP) named Japan Tobacco as a firm that continues to pay taxes to Russian authorities, thus enabling Moscow to sustain its military actions against Ukraine.

This designation triggered a concerted campaign by Ukrainian activists and public figures, urging the company to withdraw from Russia. However, the initiative had minimal impact on Japanese public sentiment and did not reach its primary objective.

Similarly, Chinese businesses have increased their footprint in Russia, as detailed by a list from the Kyiv School of Economics, seizing the opportunities left by Western companies’ exit.

A notable instance is Great Wall Motor Co., which saw its revenue in Russia double in 2023, as many major European and American automotive manufacturers either halted their operations or left the market. This company also appeared on the NACP’s list, yet it shows no signs of diminishing its engagement in a market with a rising demand for Chinese vehicles.

Haier, another Chinese brand, has also grown its presence in Russia. The company operates at least three production facilities in the country and revealed plans in mid-2022 to establish a fourth in Naberezhnye Chelny. In 2023, Haier’s revenue surged over 50%, fueled by the retreat of Western rivals and the company’s proactive marketing strategies.

Despite global scrutiny, Haier has indicated no intention of scaling back its Russian operations. Xiaomi, although not directly manufacturing in Russia, continues to thrive in the country’s consumer electronics sector. By July 2022, Xiaomi and its sub-brand POCO controlled a significant 42% of the smartphone market in Russia.

Nevertheless, the company has sought to separate itself from geopolitical strife, asserting its commitment to peace and disavowing any military activities.

Financial institutions are also integral to this ongoing involvement.

The Industrial and Commercial Bank of China (ICBC) maintains its Russian subsidiary, ICSIB Bank, which has experienced tremendous growth from 2022 to 2025, primarily due to the Russian Central Bank’s efforts to facilitate their operations.

Hikvision, recognized for its surveillance technologies, has also achieved substantial revenue growth in Russia, with a 42% year-on-year increase in 2022. This expansion reflects the heightened requirements of Russian state surveillance for equipment amid the absence of Western alternatives.

Indian companies like Bajaj Auto and Dr. Reddy’s Labs, which are well-known, continue to operate in Russia. Their supply chains are largely based in India, allowing them to avoid significant disruptions that have affected their European and American counterparts.

Russia’s increasing economic orientation towards Asia is reshaping its trade and financial systems.

Currently, China stands as Russia’s foremost trading partner, with cross-border commerce thriving. This strengthening of ties extends beyond mere trade; it signifies a shift in geopolitical alignments.

Chinese companies are solidifying their roles as European and American firms withdraw, positioning themselves not simply as opportunistic entrants but as enduring players in a newly configured Eurasian market. Operating in Russia today entails considerable risks, with the possibility of secondary sanctions from the West remaining a significant concern, compounded by the complexities of managing reputational repercussions.

Additionally, Russian authorities are raising financial barriers for exiting the market, including increased exit taxes and enforced asset writedowns. Despite these obstacles, many Asian firms are choosing to remain anchored in Russia based on clear pragmatism. In certain instances, the potential of the market overshadows concerns over reputation, while in others, governmental support or geopolitical ties provide a buffer against Western disapproval.

The result is a narrative of divergence: as much of the West pulls away from Russia, Asia — especially China — is positioning itself for deeper engagement.

This article was originally published in bne IntelliNews.