China still supplies drone production in Iran and Russia despite sanctions - WSJ
Kyiv • UNN
China is mass-supplying components for drone production to Russia and Iran, bypassing sanctions. The US is attempting to complicate logistics and reduce the quality of the UAVs.
China continues to supply products to drone production facilities in Iran and Russia despite US sanctions, The Wall Street Journal reports, according to UNN.
Details
According to Chinese customs data, Chinese companies are shipping hundreds of containers of so-called dual-use goods to Russia and Iran. Packing lists include various items ranging from engines to computer chips, fiber-optic cables, and gyroscopes. For some time, Chinese exporters intentionally mislabeled some shipments to circumvent US and European sanctions, but in many cases, they no longer do so, according to former senior US Treasury officials and weapons analysts.
The expansion of trade is one of the biggest challenges for American non-proliferation officials in the era of drone warfare. Low-tech and disposable, drones consist almost entirely of common parts that easily and inconspicuously enter and exit global trade.
China is exacerbating this problem. According to former US Treasury officials, the US's top rival has long served as a sort of middleman for American and European components that could be diverted to drone factories in Iran and Russia. Increasingly, they say, these components are being manufactured within China itself, often at small factories that do not fear Western sanctions.
Supplies for "Shaheds"
The "Shahed," Iran's primary attack drone, is one of the main concerns for the US. It can fly long distances with an explosive warhead and, according to analyst estimates, costs between $20,000 and $50,000 to produce, making it essentially a cheaper alternative to cruise missiles.
Drones have proven effective in overwhelming or evading air defenses and striking targets. The US recently developed its own copy, the publication writes.
Early versions of the "Shahed" used in Ukraine were equipped with microelectronics, servomotors for precise motion control, and other critical parts manufactured in the US and Europe, according to teardowns of drones recovered in Ukraine and the Middle East.
US Treasury investigations revealed that virtually all American and European components were diverted through authorized distributors to retailers in mainland China or Hong Kong, who then shipped the components to Iran or Russia.
Typically, payments were made through shell companies that are easy to set up in Hong Kong and help hide the final destination of the components.
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In 2024, the US Treasury Department imposed sanctions on a network of Hong Kong shell companies linked to Hamed Dehghan, a Tehran-based trader whose company was a key supplier for Iranian drone and missile programs.
A year later, an entirely new network of Hong Kong companies began serving as fronts for his activities, leading to a new wave of sanctions, the publication notes.
"The Chinese turned a blind eye to this flow, even though their role was repeatedly exposed in public reports and sanction announcements," said Miad Maleki, a former US Treasury official who oversaw sanctions programs at the Office of Foreign Assets Control (OFAC). "They either don't care or have decided not to intervene."
In a statement, China's Ministry of Foreign Affairs said it consistently applies export restrictions on dual-use goods "in accordance with its laws and regulations, as well as international obligations."
Given the difficulty of intercepting components, US officials say they are also trying to deprive Tehran of funding by targeting buyers and suppliers of Iranian oil. "We are focused on the revenue because when we cut off the head of the snake, that's where we can do long-term damage," one US official said.
According to former US Treasury officials and industry analysts, Russian and Iranian drone development programs appear to be increasingly sourcing components directly from China lately,
The UK-based group Conflict Armament Research, which investigates illicit weapons trafficking, said it has noticed a "marked increase" in the use of components produced by Chinese manufacturers in Shahed-type drones.
Meanwhile, during teardowns of Russian FPV drones—quadcopters—by the Ukrainian military, a large number of Chinese-made parts were discovered, the publication writes. Chinese customs data shows that local companies are increasingly willing to openly trade drone components despite US and European sanctions.
"Chinese exports of fiber-optic cables surged in the fall of 2024, shortly after Russia successfully used cable-guided drones to counter Ukrainian jamming and reclaim the Kursk region," the publication writes. An even sharper increase was observed after an attack on the city of Saransk in April 2025, which disabled a major Russian supplier of fiber-optic cables, the publication points out.
Exports of lithium-ion batteries to Russia have also surged as the Russian military ramped up production of battery-powered quadcopters, and have remained at high levels since then, official data shows.
"There is really no plausible explanation other than this being used for military purposes," said Joseph Webster, a senior fellow at the Atlantic Council's Global Energy Center who tracks this data. "It is extremely egregious."
Similar spikes in battery and fiber-optic cable exports to Iran were observed in July and August of last year, immediately following Iran's 12-day war with Israel. In March, Iranian-backed militias used fiber-optic-guided drones to destroy a US Black Hawk helicopter and an air defense system in Baghdad.
Cost Analysis
"A significant portion of recent dual-use trade with Iran and Russia is carried out by small, agile Chinese companies that see an opportunity to profit from war-driven demand. Such firms rarely deal in dollars and therefore have little to fear regarding US sanctions," the publication says.
According to current and former officials, the US cannot completely stop the trade, so their goal is to maximize the costs for Iran and Russia.
"Forcing them to use low-quality Chinese components is part of that effort," said Carrie Bitsoff, a former assistant director at OFAC who worked on non-proliferation issues. She pointed to reports of several Russian Shahed drones falling from the sky as evidence that the disruption campaign is impacting the battlefield.
The question is how American adversaries weigh the trade-offs when wars increasingly favor quantity over quality, the publication observes.
"A cost analysis needs to be done," Bitsoff said. "Is it better to have 100 drones that can fly for two hours, or 50 that can fly for 20?"