Drone-maker SZ DJI Technology Co. has halted all business activities in Russia and Ukraine, becoming the highest-profile Chinese company to withdraw from the war-torn region.
The world’s largest producer of unmanned aerial vehicles is temporarily suspending business to comply with regulations in various jurisdictions, it said in a brief statement without elaborating. Its pullout follows U.S. sanctions on Russia for invading Ukraine, which Washington has threatened to enforce broadly.
DJI’s move sets it apart from other major Chinese corporations. The Biden administration has urgedcompanies from Semiconductor Manufacturing International Corp. to Lenovo Group Ltd. to join sanctions against Russia, but most have refrained from publicly commenting on the matter.
Drones in particular have been pivotal in the war, used extensively by both combatants to identify targets and coordinate attacks. Ukrainian officials have however accused the Chinese company of sabotaging the country’s defense efforts, which DJI has denied, according to the Wall Street Journal.
“We are engaging with customers, partners and other stakeholders regarding the temporary suspension of business operations in the affected territories,” the Shenzhen-based company said.
China has urged an end to the war in Ukraine but refuses to criticize the invasion, vowing instead to maintain trade relations with Russia, a key global energy supplier. But U.S. President Joe Biden has warned Chinese President Xi Jinping against aiding Putin’s regime or defying sanctions.
Foreign companies have pulled out of Russia in the wake of its military aggression, reversing decades of investment by Western and other overseas businesses following the collapse of the Soviet Union in 1991. But China’s companies have been wary of following suit.
The country’s corporations and government officials are scrambling to find out how to comply with the sanctions, Bloomberg News reported in March. DJI is also the target of curbs on the export of American technology, stemming from accusations its products could aid the Chinese military. Its action was first reported by Reuters on Wednesday.