The USSR was among the top three world leaders in machine tool production. However, despite the significant development of electronics and automation globally, Russian industry faced stagnation and financial crisis in the 1990s. While the RSFSR produced thousands of CNC machines in 1990, by the early 2000s, it was only a few hundred per year.
Despite government programs and foreign investments, the Russian industry could not reach its previous capabilities due to the lack of a full production cycle within the country and an insufficient number of specialists, gradually driving it into import dependence.
How did this happen, and why are machine tools critically important for Russia's defense industry? To answer these and other questions, we recommend reading the research on the development and decline of the Russian machine tool building and the importance of CNC machines for the defense industry in modern Russia, published by the ESCU last year.
As of 2007, the year of Putin's infamous speech in Munich, Russia was forced to import 70% to 90% of its machine tools and components due to complete technological dependence not only on the West but also on the East. The start of the full-scale invasion prompted Russians to consider developing their own machine tool production, but the physical absence of necessary technologies, highly qualified specialists, and billions in investments made this goal unattainable in the near term.
Sanctions imposed after February 24, 2022, significantly complicated Russia's access to traditional suppliers from Germany, Italy, Japan, Taiwan, South Korea, Switzerland, and the USA. Unable to produce the necessary machine tools for armaments production independently, Russia turned to China, which in 2023 became the primary supplier of industrial equipment to the aggressor country. Machine tools accounted for almost 40% of the annual growth in Chinese dual-use goods exports.
Washington has already added over a hundred Chinese organizations to the sanction lists of the Treasury and Commerce Departments. Given China's continued support for the Russian military, more Chinese exporters and financial intermediaries are likely to face secondary sanctions and export controls in the future. Nonetheless, China's main customs administration continues to publicly report on bilateral trade with Russia, even in areas subject to Western export controls.
The question of the quality and technical characteristics of Chinese-made machine tools remains open. It is unclear whether these machines can truly replace the high-quality parts previously imported from Germany and Japan. Nonetheless, this reality marks a new era in Sino-Russian relations, where Beijing and Moscow are actively deepening their defense cooperation.
Whether Russia can withstand the invasion of Ukraine largely depends on its access to high-tech resources for its war machine. Imported CNC machines have become the backbone of the aggressor country's defense industry. Therefore, the governments of sanctions coalition members must adopt stricter measures that limit access to Western technologies not only for designated Russian enterprises but also for Chinese manufacturers supplying equipment to Russia.