Legend has it that Chinese monks invented gunpowder in the 9th century CE — but China’s impact on the global gunpowder market is far from ancient history. 

In fact, the Russia-Ukraine war has shone a light on China’s integral role in the supply chain for nitrocellulose, a key component of modern gunpowder. China’s exports of the chemical have increased by 35 percent since 2012, according to data from the International Trade Centre, making it now the world’s second largest nitrocellulose exporter.

Its shipments to Russia alone have seen an even more dramatic surge: While China did not export any nitrocellulose to Russia in 2021, prior to the Ukraine invasion, its exports had increased to over 1,300 tons by 2023.

The U.S. government has taken note. In April, U.S. Secretary of State Antony Blinken called out China as a “top supplier” of nitrocellulose which “Moscow is using to ramp up its defense industrial base.” The following month, the Treasury department sanctioned two Chinese firms for shipping large quantities of nitrocellulose to Russia.

China’s role supplying gunpowder inputs is yet another example of the country bolstering the Russian defense sector as part of its so-called ‘no limits partnership’ — spurring worries in Washington and Brussels about the efficacy of Western countries’ sanctions regime on Russia, as well as stoking concern about China’s increasing production share of an essential material for militaries across the world. The U.S. has also expressed concern about China’s exports of products such as electronic components and drones to Russia.

“[The Ukraine war] just brought the nitrocellulose issue to the fore and made it real and tangible,” says Nathan Picarsic, the co-founder of Horizon Advisory, a China-focused consultancy. “But this is a symptom of a recurring and deliberate strategy on the Chinese side… to own the supply chain just as they have in so many other critical upstream input fields.” 

Nitrocellulose is made by modifying cellulose — which can come from wood pulp or cotton products — through a chemical process involving nitric acid. Once manufactured, it can help propel a bullet from a gun, for example, though it can also be used for non-defense applications, such as paint lacquers. One of the reasons it has been difficult to stop China’s support for Russia’s defense base has been that many of the materials, like nitrocellulose, are ‘dual-use,’ meaning they can be used for both military and civilian purposes — allowing Beijing to argue it is not providing direct military support.

China is not the world’s only nitrocellulose manufacturer — Thailand, Germany, and Taiwan are all major exporters, according to trade data — but given the surge in demand since the Ukraine war started in February 2022, global ammunition manufacturers are worried about becoming overly reliant on Chinese sources. In April, two Republican lawmakers in the U.S. Congress introduced legislation to mandate a study of the nitrocellulose supply chain;  meanwhile AFEMS, a European association representing ammunition makers, told The Wire it is conducting a study on the shortage of nitrocellulose, which it said began with Russia’s invasion of Ukraine.

“What we have heard is there is a shortage of explosive nitrocellulose,” says Lawrence Keane, general counsel for National Shooting Sports Foundation (NSSF), the trade association for the U.S. firearms industry. Keane adds that in the U.S., there is only one source of military grade nitrocellulose — the Radford Army Ammunition Plant in Virginia, which is owned by the U.S. government and operated by BAE Systems, a British defense contractor.

“That’s a concern, that it is a single point of failure domestically,” he says. “[The concern] is also driven by America’s recent experiences during Covid where we realized we had become overly dependent on foreign sources for critical supplies like medicine and personal protective equipment.”

…almost anything that might have been exported to Russia that China is capable of exporting, they are going to [export]. It doesn’t create a supply chain problem for the rest of the world, it just means that Russia has the raw material for its war effort.

Bradley Martin, director of the RAND National Security Supply Chain Institute

Indeed, Russia isn’t the only country which is increasingly reliant on Chinese nitrocellulose. General Dynamics Ordnance and Tactical Systems, a Florida-based defense company which, according to its website, supplies propellants to 95 percent of U.S. military small arms ammunition, has consistently imported nitrocellulose from a Chinese state-owned military firm over the last dozen years.

That company, Beijing Auxin Chemical Technology, is a subsidiary of Norinco, a state-owned defense firm. In 2020, the Treasury Department placed Norinco on a list of companies which the government is restricted from using for procurement, and the following year, placed it on a list which restricts U.S. investment in the company. Since 2012, General Dynamics Ordnance has imported 36 shipments of nitrocellulose, totalling over 6 million pounds, from Beijing Auxin, with seventeen shipments since the beginning of 2022, according to data from Import Genius.

Left: The government was restricted from using Norinco for procurement from November 12, 2020. Right: Norinco was placed on the ‘Non-SDN Chinese Military-Industrial Complex Companies List’ on August 2, 2021. Credit: SAM.gov, OFAC

A representative for General Dynamics Ordnance said in a statement to The Wire that the nitrocellulose imported from China only serves the company’s commercial clients, not the U.S. military. “We acquire nitrocellulose from a variety of suppliers in compliance with all applicable regulations and according to the terms of our contracts with our U.S. customers,” the representative said. “We have a robust network of suppliers, both U.S. and international, that supply nitrocellulose for the manufacture of propellants. These are used for both commercial customers and military customers in both the U.S. and Canada.” Some of the other nitrocellulose shipped from China to the U.S. seems to be for non-defense applications, based on the Import Genius data.

Norinco is also involved in supplying Russia with nitrocellulose. A different Norinco subsidiary, North Chemical Industries, has sent five shipments of nitrocellulose to Russia since the start of 2022, according to Import Genius. North Chemical Industries controls half of the Chinese nitrocellulose market and 20 percent of the global market, according to a 2022 filing.

But about half of all China-to-Russia nitrocellulose shipments since 2022 have come from Hengshui Heshuo Cellulose and Hengshui Yuanchem Trading, the two companies which the U.S. sanctioned in May. These two firms, according to WireScreen, share a website, phone number, as well as a key executive — suggesting they are closely linked — and neither of them have any state ownership. Both companies did not respond to requests for comment.

Bradley Martin, the director of the RAND National Security Supply Chain Institute, says that he is not so concerned about potential U.S. dependence on China for nitrocellulose, because it is fairly easy to ramp up domestic production. But he is worried about China’s role helping Russia get around sanctions. 

“China is not buying into sanctions on Russia, almost anything that might have been exported to Russia that China is capable of exporting, they are going to [export],” says Martin. “It doesn’t create a supply chain problem for the rest of the world, it just means that Russia has the raw material for its war effort.”

Others who have been tracking the nitrocellulose issue think that the U.S. should take a more proactive posture. “We need a solution, and the solution is to seed domestic manufacturing [of nitrocellulose] and then protect it,” says Nazak Nikakhtar, a former Commerce Department official during the Trump administration who is now a partner at Wiley Rein. 

While supply chain awareness has rapidly increased since Covid-19, Nikakhtar says the nitrocellulose issue is a manifestation of “a U.S. government policy that is so behind the ball,” she says. “They need to be constantly reviewing supply chains. We are behind in identifying this is a problem and instituting policy solutions.”

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