Chinese companies ship dual-use goods to Russian and Iranian drone factories
Updated
Updated · The Wall Street Journal · May 6
Chinese companies ship dual-use goods to Russian and Iranian drone factories
4 articles · Updated · The Wall Street Journal · May 6
Shipments include hundreds of containers of engines, chips, fiber-optic cables, gyroscopes and batteries, with one Xiamen firm marketing German-designed L550 engines linked to Shahed-style drones.
Analysts and former US Treasury officials say Chinese-made parts are increasingly replacing Western components in Russian and Iranian drones, while some exporters openly trade despite sanctions and often avoid dollar transactions.
Washington is trying to raise costs by targeting Iranian oil revenue and supply networks, but officials say common drone parts are harder to trace than missile or nuclear components in modern warfare.
Is the China-Russia-Iran drone trade building a financial system that operates entirely beyond U.S. control?
As Chinese tech improves, is America's strategy of forcing rivals to use 'inferior' parts now obsolete?
The $110 Billion Drone Supply Chain: China’s Role in Sustaining Iran and Russia’s Military Escalation
Overview
In June 2025, Israel's Operation Rising Lion triggered a major conflict with Iran, leading to Iran's massive drone retaliation and rapid depletion of its missile stockpiles. This urgent need to replenish caused a sharp rise in exports of critical dual-use components like lithium-ion batteries and fiber-optic cables to Iran and Russia. Chinese firms played a key role in supplying these parts despite sanctions, enabling Iran and Russia to sustain and expand their drone warfare capabilities in the Middle East and Ukraine. Meanwhile, China’s legal countermeasures, including the Blocking Rules, shielded these supply chains, undermining sanctions enforcement and prolonging regional conflicts.