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Article looking at some related issues:
The Russian-Chinese Arms Trade: an Attempt at Qualitative Analysis
Konstantin Makiyenko
Characteristics of Russian-Chinese Military Technical Cooperation
China constitutes the largest single importer of post-Soviet Russian arms and military equipment, with purchases ranging between 30% and 50% of Russia’s entire annual deliveries. It was only in 2003, according to the Committee on Military-Technical Cooperation, that India overtook the PRC in volume of deliveries owing to the delivery of two Project 1135 frigates worth $600 million each and 12 Su-30MKI fighters with a nominal unit price of $450 million. Nevertheless, China will likely retain its leadership position in the medium term. Chinese purchases are distinguished by a number of open characteristics that present an opportunity to evaluate its global military position, defense objectives and possible strategy.
Chinese arms contracts with Russia are relatively large for today’s market. The PRC’s order for 76 Su-30MKK fighters for approximately $3.6 billion is comparable to the largest arms purchases of countries like Saudi Arabia and the UAE. The $2.2 billion contract for licensed production of 200 Su-27SK is remarkable and the purchase of eight diesel-powered submarines is a stunning display of buying power, if not a record in world practice. The significance of such orders to the Russian arms industry is clear. Chinese demand fueled the boom in Russian arms exports from 2001 and account for a significant share of the recent 14% annual growth of the military-industrial complex.
Interestingly, the technological level of sophistication of the weapon systems sold to China remains relatively low. This factor is exemplified by the choice of Su-30MKK fighters and the second installment of Project 956EM destroyers. The weapons control system of the Su-30MKK is built upon obsolete N-001 radar technology that had been upgraded but is still doesn’t match contemporary standards. Russia was already offering weapons control systems based on a phased antenna array when the first contract for the Su-30MKKs was concluded. Likewise, the battle potential of the Project 956EM destroyers was only marginally superior to that of the standard destroyer: the air-defense capability was increased and the range of the missile system was doubled. With these minor upgrades, the destroyers still fall short of multirole capability. They do not carry the more versatile compact missiles that can be installed in vertical launch systems, the propulsion system is outdated and the ship’s anti-submarine capacity does not seem to have been satisfactorily upgraded. Indeed, this last factor would appear to be the Achilles heel of the Project 956 destroyers.
It is clear that this situation follows at least partly from the conservative military-technical strategy of the Chinese leadership, but it is also a natural a consequence of the limits on arms transfers imposed by the Russian military. In either case, the net result is that China receives large deliveries of well-tested armaments with minimal risk for technological failures. Chinese orders are simpler and executed without the major delays and problems with quality control that have plagued Indian orders. By the end of 2003 China had already received about 150 Su-27SK/UBK and Su-30MKK fighters, not counting the 100 or so fighters acquired through licensed assembly. By that time India had received only 40 Su-30K/MKI fighters of dubious functionality. From this point of view, the PRC’s conservative policy would appear more rational than the risky Indian strategy of accenting technologically advanced onboard systems.
On the whole, the Chinese aviation contracts have a much shorter order-to-delivery cycle than the Indian deals. The delivery of 32 Su-30MKI fighters to India dragged on for over three years and was executed in three installments of 10-12 aircraft each. The contract itself was concluded in 1996, but deliveries continued into 2004, 8 years after the signing of the initial agreement. Production under license will continue for 12 or 17 years, according to various sources. Comparatively, the Chinese contract signed in 1999 was fully executed by 2001, with deliveries of 10 and then 28 units. The second order in 2001 was fulfilled with deliveries of 19 units two years in a row. This high production rate keeps the Komsomolsk-on-Amur Aviation Production Plant (KnAAPO) well tuned at high capacity, but at the same time does not allow for the development of long-term financial and corporate strategy for change.
Chinese contracts concluded after 1999 involve high volume serial production and make relatively few demands for modernization of base models. Such terms are well suited to the Russian military-industrial complex in its present state. By the mid 1990s, barter payments with low-quality goods were replaced by hard currency or forgiveness of Russian state debt. The high profit margins of the Chinese contracts allow Russian industry to meet the more technologically and financially complex Indian orders. In this respect one could speak of a certain synergy between the Chinese and Indian aviation contracts, insofar as the former keep the existing industrial capacity in fit operation and infused with much-needed finances, while the latter stimulate innovation and lead to the development of more high-tech, market-ready weapons systems. The Su-30MKK contract of 1999 very likely contributed to the acceleration of work on the lagging Su-30MKI project.
Another aspect of this interrelation is that large Chinese purchases stimulate Indian demand for high-tech systems. Indian imports also influence Chinese procurement policy, but are not a decisive factor.
In military-political terms, Russian arms transfers to the PRC are presently classified as relatively high-risk compared with those to India. This would appear to be an overcautious position that has served its purpose but may be an obstacle to the further development of military-technical cooperation with China, in particular concerning raising the technological level of the armaments on offer. However, the growing gap between Russian and Chinese financial means and especially military expenditures is forcing the Russian military to tread carefully and to continue to set limits on the scale and quality of sales to China.
Yet another aspect of Russian transfers to the PRC, admittedly of oblique consequence, relates how the PRC is displacing Russia as the principal military rival of the United States. After all, growing Chinese military might is of concern not only to Russia. The reorientation of American military planning towards China would undoubtedly be a positive factor for Russia.
Current trends
The principal current trends in Russian-Chinese military-technical cooperation as of the second half of 2003 are as follows:
Intensifying of Chinese demands to lift the ceiling on high tech arms transfers
Beginning of the process of lifting the EU embargo on arms transfers to China
Strong Chinese emphasis on acquiring maritime weapons systems over the past two years
Clearly, given its phenomenal economic growth over the past quarter century, China will not remain satisfied with the decade-long practice of purchasing armaments with mid 1980s level technology. The Chinese military is well aware of the technological profile of fighters and ships delivered to India. Russia will preserve its present leading position on the Chinese market only on condition that it offers more modern armaments, as opposed to fighters with parabolic radar and ships with boiler-turbine power plants that were already outdated when they began serial production.
The natural completion of the most recent technological cycle of arms transfers between Russia and China (first initiated with the sale of the Su-27 in 1999, then with the transfer of the Su-30) coincides in fortuitous concert with the incipient process of lifting the European Union arms embargo on China. It is likely that France, which has already executed a remarkable shift from the Pakistani to the Indian market, is behind this process. The majority of China arms trade experts agree that, in general, EU expansion into the Chinese market poses only a very minor threat to Russia’s position. The Europeans are positioned only for those sectors where Russia has nothing of significance to offer, namely communications, optical-electronic and laser-based systems. There are some who believe the newly opened opportunities for EU producers might bring about a restoration of French positions in the Chinese helicopter construction market. French arms traders are arguably more commercially adept than the Russians, but such an optimistic prediction is still quite premature at this point.
Additionally, the possibility of competition from Israel should not be overlooked. Israel is set to replace Russia in a few years as the leading exporter of arms to India. This purchasing trend in India, namely the diversification of sources for arms imports, has begun the marginalization of Russia as a military technical partner. Russia’s response to this has been a repositioning to the niche market of low-end platforms that constitute no more than 10-30% of weapons systems complexes. This pattern is likely to repeat itself in China in the absence of Russia’s repositioning itself on the Chinese market with at least a wider range of products, if not more competitive products.
Emphasis on Maritime Warfare
The majority of large contracts made public after 2002 involve the provision of weapons and military equipment to the Chinese Navy. This includes orders for Project 956EM destroyers, Project 636 submarines and several naval missile-equipped Su-30MK2 fighters. Moreover, there were indications in late September that an order for another group of Su-30MK2 fighters might be in the works. It is worth mentioning that all of these orders are due to be fulfilled before 2007. The emphasis on naval warfare armament bears clear witness to the centrality of Taiwan in Chinese military-political planning. The relatively tight deadlines for delivery suggest that Beijing expects the Taiwan issue to become aggravated in 2006-2007, perhaps in response to a declaration of independence or the adoption of a new constitution for Taiwan.
The only large deal outside of the naval sector was the transfer of eight battaries of the Favorit anti-missile system S-300PMU-2, the use of which could also be related to scenarios involving Taiwan. Air defense systems will probably be distributed along the strait to provide antimissile cover for troups and to limit the freedom of action of Taiwanese aviation over the strait. The 2007 deadline for delivery of the Favorit speaks again to Chinese efforts to secure for its Armed Forces advanced systems on time for an expected escalation of tensions.
Russia’s Strategy
There are two ways in which Russia might respond to the challenge of the emerging changes in the Chinese arms market. First, it can attempt to restore normative levels of domestic arms purchases for the Russian Armed Forces. Second, it can raise the technological level of arms offered to the China. The first option, while obvious given the deplorable state of Russian conventional forces, is no small matter given tremendous budgetary limitations of the Russian state. To invigorate the internal demand for arms would require a range of economic and bureaucratic changes that are frankly unlikely in the short run. Taking up the second option, the third technological cycle of arms transfers to China might include a new level of trade and cooperation:
Fighters equipped with phased antenna array radar, which match the effectiveness of the Indian Su-30MKI fighters
Multirole destroyers and frigates with gas-turbine propulsion systems, the latest compact missiles that can be used in vertical launch systems, equipped with high-tech anti-aircraft defenses also compatible with vertical launch systems
Conventional submarines of the next generation and open negotiations seeking Chinese financing for the development of submarines with air independent propulsion systems
Admitting the provocative nature of this policy choice, a further suggestion might include the military political and commercial interests of Russia would be served even with the sale to China of such powerful and valuable armaments as the only Project 1144 TARK remaining in the Russian Navy, the Tu-22M3 naval bomber, and the Project 949 and 971 nuclear powered submarines, each with a modified array of missiles. Further still, it is worth considering the possibility of Russian-Chinese military-technical cooperation moving on past licensed production to a co-production scheme for armaments.
The consensus opinion that China is not a suitable partner for joint ventures would appear to need revising. The core foundation of such a policy is the acute fear that China might pose a military threat to Russia. While the strength of China’s conventional forces are already beyond parity, the diverse military capacity of the two nations is only one side of the question. The military threat from China as seen from a sociological and political point of view is, however, unfounded. There are, on the contrary, many reasons to believe that China has enough trouble of its own to bother with any such military expansion regarding Russia.
Estimation of Military Political Risk
Despite China’s economic, military and scientific-technical growth, the sociopolitical and socioeconomic situation remains tense. These tensions are not only the result of long-standing demographic pressures of a highly structured, socially immobile society frustrated with growing awareness of the world outside China, but from other pressures as well. The ecological situation in overpopulated areas and the widening gap between rich and poor in the interior provinces are only exacerbated by slow bureaucratic approaches, or the lack of response altogether. The gradual erosion of the Communist Party and the lack of resources in the face of an otherwise growing Chinese economy also present the Chinese with new challenges. Observers are presented with a picture of a nation focused on orienting itself within its new role in the global paradigm. The stability of the regime and the system as a whole is secured largely by high rates of economic growth. While these trends have garnered some momentum for China’s lethargic but stalwart nationalism, under such conditions it is unlikely that Chinese leadership will venture to risk indulging in any sort of military adventures without a direct threat to their national security.
It may be appropriate to draw an analogy with the situation in Russia at the beginning of the last century, when intensive growth appeared in tandem with similar extreme social tensions. These tensions led to the national catastrophe of 1917, and the nation was thrown into a senseless civil war. As a result, the twentieth century, which promised to be a century of triumph, turned into a century of disaster. This comparison is not intended to suggest that China is headed for an implosion, but in the way that Russia withdrew from external military participation of the First World War to attend to its own internal dynamic, China, while expanding, is at the same time feeling pressure to focus inward. There are significant differences between contemporary China and imperial Russia, however, which give reason to hope that catastrophe may be avoided, especially in that the PRC has a responsible, loyal and effective elite. Nevertheless, since the demonstrations of Tiananmen Square in 1989 there has been unrest that even general economic prosperity hasn’t been able to resolve and this continues holds the attention of China’s ruling class.
The principal military-political task facing the Chinese people remains the reunification of the rebel province of Taiwan. This can hardly be achieved by military means, but the point is that China’s military planning and expansion is directed precisely towards the resolution of the Taiwan question and not in preparation of an expansion towards Russia.
The threats that China may truly present are of a demographic and economic nature, not military. In this respect, any exports, including armaments, which help to close the resource gap between the two countries and to reduce the demographic and economic pressures from China on the Russian Far East and Siberia would be welcome. It is important to note that the Komsomolsk factory, one of the key exporters of fighters to China, is located precisely in one of the most threatened regions. Chinese armament orders appreciably assist in the reduction of the threats listed above. In general, the main threats to Russia’s security lie in the deterioration of its own bureaucracy and weak economic performance.
The difference in Russian and Chinese military potential is so significant that only thermonuclear force could restrain the PRC. It would appear that those aspiring to the role of the Russian "elite" should at long last come to the frank realization that Russia lacks any pretense to a modern and effective conventional armed forces. The Russian Army, to say nothing of its anecdotal Navy, corresponds to the armed forces of middling military powers, like Trubetskiy’s streets compared to guardsmen of Charles XII at the first battle of the Narva. In this respect, any obstacles which the military place in the way of further exports of weapons and military equipment to China will lead to the collapse of the only living part of the nation’s defense capacity, that is its military-industrial complex, which has preserved its relative effectiveness precisely because of Chinese contracts for arms.
Deliveries and contracts for deliveries of Russian weapons and military equipment to the PRC from 1992 to 2002
Armament Type
Designation
Producer
Contract Date
Delivery Date
Quantity
Remarks
Weapons and Military Equipment for Air Forces
Fighter
Su-27SK
Komsomolsk on Amur Aviation Production Plant
N/A
1992
20
Trainer-Fighter
Su-27UBK
NPK Irkut
1992
6
Fighter
Su-27SK
Komsomolsk on Amur Aviation Production Plant
1995
1996
16
Trainer-Fighter
Su-27UBÊ
NPK Irkut
1995
1996
6
Fighter
Su-27SK
Sukhoy Design Bureau, Komsomolsk on Amur Aviation Production Plant
1996
1996-to present
200
Organization of licensed production at the factory in Shenyan. As of May 2004, 95 kits for assembly of the Su-27 were transferred
Trainer-Fighter
Su-27UBK
NPK Irkut
December 1999
2000-2002
28
8 units in 2000, 10 in 2001, 10 in 2002
Multirole Fighter
Su-30ÌÊÊ
Komsomolsk on Amur Aviation Production Plant
August 1999
2000-2001
38
Delivery of 10 units in 2000, 28 in 2001
Multirole Fighter
Su-30ÌÊÊ
Komsomolsk on Amur Aviation Production Plant
July 2001
2002-2003
38
Delivery of 19 units in 2002, the remaining19 in 2003
Armament Type
Designation
Producer
Contract Date
Delivery Date
Quantity
Remarks
Weapons and Military Equipment for Naval Forces
Diesel-Electric Submarine
Project 877EKM
Central Design Bureau for Marine Engineering Rubin, Admiralty Shipyard
N/A
1994-1995
2
Diesel-Electric Submarine
Project 636
Central Design Bureau for Marine Engineering Rubin, Admiralty Shipyard
N/A
1996, 1998
2
Diesel-Electric Submarine
Project 636
Central Design Bureau for Marine Engineering Rubin, Admiralty Shipyard, Krasnoe Sormovo, SIV Mash Plant
2002
N/A
8
All units are to be equipped with Club-S Anti-Ship Missile System
Destroyer
Project 956EM
Severnoe PKB, Severnaya Shipyard
1997
1999, 2000
2
Destroyer
Project 956EM
Severnoe PKB, Severnaya Shipyard
2002
N/A
2
Modernization of the destroyer with strengthened anti-air defenses and missile armaments
Multirole Naval Fighter
Su-30MK2
Defense Construction Bureau Sukhoy, Komsomolsk on Amur Aviation Production Plant
2002
2004
24
An order for a second batch is probable for 2005-2006
Onboard Surface To Air Missile System
S-300F
Rif
NPO Al’tair Design Bureau
2002
N/A
2
Probably for a Project 052S destroyer
Onboard Surface To Air Missile System
Shtil’-1
NPO Al’tair Design Bureau,
Concern PVO-Almas Antey
Probably 2001 or 2002
Probably 2003
Probably 2
For a Project 052B destroyer (deck-based tactical number 168 or 169)
Diesel-Electric Submarine
Project 877EKM and 636
Severodvinsk Shipyard ‘Zvezdochka’
Probably 2002 or 2003
N/A
2 or 3
Repair and modernization, including integration of Club-S Anti-Ship Missile System
Type of armament
Designation
Producer
Date of Contract
Date of Delivery
Quantity
Remarks
Weapons and Military Equipment for Anti-Air Defense
Long-Range Surface To Air Missile System
S-300P/PMU-1
Financial Industrial Group Defense Systems
N/A
Before 1999
6-8 battaries
Long-Range Surface To Air Missile System
S-300P/PMU-1
Concern PVO
2001
2003-2004
4 battaries
In exchange for state debt forgiveness
Long-Range Surface To Air Missile System
S-300PMU-2
Concern PVO
Probably August 2004
Before 2007
8 battaries
Short-Range Surface To Air Missile System
Tor-M1
Concern Antey, State Enterprise Kupol Izhevsk
N/A
27 Surface to air missile systems
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