Chinese and Iranian companies are expanding their economic presence in Russian-occupied regions of eastern Ukraine, becoming deeply involved in construction, mining, telecommunications and trade activities in territories seized during the ongoing conflict.

In late 2023, two Chinese firms signed a deal to supply heavy construction machinery for projects in occupied Donetsk, a region controlled by Russia-backed authorities since 2014. The agreement was announced by local occupation officials and involved equipment being used in quarries and rebuilding operations across the region.

One of the major reconstruction projects is taking place in the port city of Mariupol, which suffered widespread destruction during intense fighting in 2022.

Analysts monitoring developments in occupied territories say more than a dozen Chinese companies are now active in the Donetsk and Luhansk regions. Their involvement reportedly includes mining operations, telecommunications infrastructure, financial services and industrial equipment supplies.

Thousands of Chinese-made communication relay stations have also reportedly been installed across occupied areas to improve local networks and digital systems.

Researchers tracking the situation say many local industries have become heavily dependent on Chinese imports after Western companies withdrew from the region following sanctions linked to the war.

Coal mines and industrial enterprises that remain operational have largely shifted their business ties towards China and Russia as the occupied regions become increasingly economically isolated from the rest of Ukraine.

Experts also say the local economy has become increasingly dependent on the Chinese yuan, with businesses using Chinese payment systems and banking services throughout the occupied territories.

Meanwhile, Iran has also strengthened trade links with the occupied regions. Reports indicate that coal, grain and food products are being exported to Iran through networks connected to Russian-controlled businesses operating in eastern Ukraine.

Analysts believe Moscow is encouraging closer economic cooperation between occupied territories and countries such as China and Iran as Russia attempts to bypass Western sanctions and maintain economic activity in the war-torn regions.

Despite officially supporting Ukraine’s territorial integrity, China has maintained strong trade relations with Russia throughout the conflict. Chinese manufacturers have also become major suppliers of industrial equipment and technology used across Russian-controlled areas.

Ukrainian authorities have sanctioned several Chinese companies accused of supporting Russia’s wartime economy and continue urging international partners to increase pressure on firms operating in occupied territories.

Experts warn that the growing economic integration of occupied Ukrainian regions with China and Iran could complicate future diplomatic efforts and further entrench Russian control over the territories.