By Asif Aydinli
On June 21, 2024, China's Wison New Energies (formerly Wison Offshore & Marine) announcedvia social media that it is suspending its operations in the Russian Federation. The company cited its decision as part of a strategic future plan and promised a smooth transition.
"In addition, the company announced plans to sell its stake in Zhoushan Wison Offshore & Marine, which builds hulls for Russian floating nuclear power plants. Wison New Energies was also involved in the construction of modules for the Arctic LNG 2 project of the Russian company Novatek and planned to participate in the construction of a 1.5 GW onshore power plant for this project," he said.
The expert noted that this decision by the Chinese company is likely related to the fact that the Arctic LNG 2 project came under US sanctions in November 2023, while on June 12, 2024, the EU announced plans to impose new restrictions on Russia's energy sector. "Anticipating the official announcement of the fourteenth package of sanctions (which occurred on June 24, 2024), Wison New Energies decided on June 21, 2024, to cease all current projects in Russia," he said.
"Thus, it is becoming increasingly clear that for Chinese businesses, being present in the Russian market is becoming increasingly toxic. This applies both globally (Russia's share in China's trade turnover in 2023 was 4%, while the combined share of the US and EU was 24%) and on a smaller scale. For example, Wison has a contract to design a floating LNG facility worth $500 million in the US, while the contract with the Russian company is valued at $226 million (half the amount)," he added.
"Therefore, the sanctions consistently imposed on Russia are gradually pushing it out of the global economy, creating opportunities for other players to occupy positions previously held by Russia," Ivan Us noted.
P.S. This move by Wison New Energies could be an important signal for other Chinese companies operating in Russia. It might mark the beginning of a new era where Chinese businesses reassess their strategies concerning Russian projects in light of international sanctions and the geopolitical situation.
