Small, little-known Chinese companies are openly marketing and shipping engines, batteries, fiber-optic cables, and other dual-use components to Iranian and Russian drone factories despite U.S. sanctions, The Wall Street Journal reported.

The Chinese companies have shipped hundreds of containers of dual-use goods to Russia and Iran, according to Chinese customs data reviewed by the Journal. The businesses once routinely mislabeled shipments to skirt U.S. and European sanctions, but in many cases “no longer bother,” former senior Treasury officials and weapons analysts told the newspaper. 

The trade marks one of the toughest challenges for U.S. nonproliferation policy in the era of drone warfare, the Journal reported. Unlike nuclear weapons or ballistic missiles, drones are largely assembled from common, low-tech parts that move easily through global commerce. China, long a clearinghouse for diverted American and European components, is increasingly producing the parts itself, often at small factories that have little exposure to the dollar system or to Western penalties.

“The Chinese turned a blind eye to that flow even as its role has been repeatedly exposed in public reporting and sanctions designations,” Miad Maleki, a former U.S. Treasury Department official who oversaw sanctions programs at the Office of Foreign Assets Control (OFAC), told the WSJ. “They either don’t care or have chosen not to interfere.”

In its report, the newspaper described an unsolicited sales pitch from a Chinese firm called Xiamen Victory Technology that landed in the inbox of Iran Watch, a project of the Wisconsin Project on Nuclear Arms Control. 

“We are deeply shocked and outraged by the aggression against Iran, and our hearts are with you,” the message read, before offering to sell German-designed Limbach L550 engines, a model the United States has prohibited from sale to Iran and Russia because it powers the Shahed-136 attack drone that Russia has used extensively in Ukraine. The company’s website featured an image of a Shahed-style drone alongside the slogan “Innovating Aviation Engine Solutions,” according to the report.

“They’re out there actively trying to sell Limbach L550 engines to Iran — and doing it pretty brazenly,” John Caves, a Wisconsin Project researcher, told the news outlet. 

Chinese customs data show that exports of components used in modern drones have repeatedly surged in step with battlefield development, the news outlet said. Fiber-optic cable exports to Russia spiked in the fall of 2024 after Russia successfully used cable-controlled drones, which resist signal jamming, to retake territory in Kursk, and rose more sharply after an April 2025 Ukrainian attack on Saransk knocked out Russia’s main domestic supplier of fiber-optic cables. 

Lithium-ion battery exports to Russia surged as Moscow ramped up production of battery-powered quadcopter drones and have remained elevated, according to official records cited in the report. 

Comparable spikes in battery and fiber-optic exports to Iran appeared in July and August of last year, immediately after Iran’s 12-day war with Israel. Iranian-backed militias used cable-controlled drones to destroy a U.S. Black Hawk helicopter and an air-defense radar system in Baghdad in March.

“There’s really no explanation that’s plausible other than this is being used for the military,” Joseph Webster, a senior fellow at the Atlantic Council’s Global Energy Center, told the Journal. “It’s extremely blatant.”