China is a Key Factor in Ukraine’s Surging Drone Industry — Beijing’s New Export Controls May Ground It

Despite Beijing professing a deep relationship with Moscow, Chinese components have kept Ukrainian drones flying — for now. On October 10, the Snake Island Institute, a Ukrainian defense think tank, published a report finding that despite Chinese export controls on drone technology, Ukraine continues to overwhelmingly rely on Chinese parts to supply much of its domestic unmanned aerial systems (UAS) production base.

The report, released as China announced sweeping new restrictions on exports involving Chinese rare earths or related technologies, highlights how Beijing’s control over key Western defense supply chains may provide a source of leverage to indirectly bolster Russia’s ongoing war effort.  

Ukraine’s Efforts To Become Self-Sufficient in Drones Have Mixed Success

According to the report, Ukraine remains highly reliant on Chinese-produced components for its domestic UAS industry, with nearly 97 percent of producers identifying China as a primary resource for imports. Moreover, despite Beijing enacting export controls on key drone components during the war, Ukrainian data indicate that nearly 89 percent of its UAS-related imports by value still came from China in the first half of 2024 — a slight decline from 97 percent during the first year of the war. 

While Ukraine has managed to ramp up its final assembly capabilities and has worked to reduce its dependence, producers continue to rely on cheap Chinese lithium-ion batteries, flight controllers, navigation modules, and thermal sensors, largely due to a lack of affordable or accessible Western alternatives. 

Beijing Leverages Rare Earth Supply Chain to Indirectly Benefit Moscow 

The report was released as China continues providing Russia with drone technology while seeking to disrupt Western supply chains via its extended control over rare earth metals. Along with relying on Chinese assistance in conducting sabotage operations across Europe, Russian defense contractors have collaborated with Chinese firms to test and produce new drone models for use against Ukraine, particularly long-range one-way attack drones frequently used to target Ukrainian energy infrastructure and defense-industrial sites. China produces nearly 80 percent of the electronics currently used in Russian drones, including those modeled off Iranian designs. 

This reliance on Chinese components also places both Kyiv and Moscow in the crosshairs of Beijing’s ongoing dispute with Washington over access to rare earth minerals. After the Trump administration escalated tariffs on China in April, China’s Ministry of Commerce imposed a stringent export control regime on both neodymium and samarium, key components in UAS batteries. These measures tightened again in September ahead of a possible U.S.-China summit, with Beijing introducing new export controls on products that contain more than 0.1 percent domestically produced rare earths or are produced using Chinese extraction technology — further threatening the continuity of Ukraine’s supply chains.

Washington Should Work With Europe To Build Secure Supply Chains 

Ukraine’s reliance on Chinese components, while allowing its domestic firms to affordably scale, has given Beijing a source of leverage to wield against Kyiv and support Moscow as part of an Axis of Aggressors threatening U.S. national security.

In response, the United States must work with its allies and partners to secure Western defense supply chains. In the shorter term, Washington should expand its efforts to collaborate with Ukraine and Taiwan on drone technology to build a stronger Western supply chain and finance access to non-Chinese alternatives for critical components. In the longer term, the United States should incentivize domestic and allied production of rare earths, including through the Minerals Security Partnership, which includes Australia, Canada, Korea, Japan, the United Kingdom, and the European Union. 

Jack Burnham is a research analyst in the China Program at the Foundation for Defense of Democracies (FDD), where Duncan Lazarow is an intern. For more analysis from Jack and FDD, please subscribe HERE. Follow Jack on X @JackBurnham802. Follow FDD on X @FDD. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.