China, the Varyag and Trust


The world has been caught up in the hype surrounding China’s first aircraft carrier, the ex-Soviet vessel Varyag, which conducted its first sea trials last month. Debates about its role in Chinese grand strategy and its implications for the region’s balance of power have raged ever since.  But the facet of this story that deserves more attention is the story of the Varyag itself: China’s aircraft carrier programme is a microcosm for Sino-US distrust. Specifically, the mystery and speculation that has shrouded the ship for 13 years illustrates the opacity that surrounds Chinese strategic intentions and highlights how large and powerful states, with dynamic and ever-changing domestic and international interests, can change intentions. 

The stripped down Varyag was purchased by the Macau-based Chong Lot Company at the bargain price of $20 million in 1998. Consistent with previous Chinese purchases of aircraft carriers, Chong Lot claimed that the Varyag would be converted into a floating entertainment centre and casino in Macau. That is somewhat odd, as Chong Lot didn’t have an office in Macau, nor did Macau have deep enough waters for an aircraft carrier to anchor. Chong Lot was a subsidiary of a Hong Kong company, Chinluck Holding Ltd., which is speculated to have ties with the People’s Liberation Army. 

Not surprisingly, the Ukrainians demanded – and the Chinese acceded to – a clause in the contract stating that the ship wouldn’t be used for military purposes.  Even before the Varyag could travel to China, it received special attention from the Chinese government. Turkey originally stopped the Varyag from passing through its waters until a Chinese deputy foreign minister flew to Ankara to ink a $360 million aid package and a tourism deal to help a purported private company with no ties to the government in securing its $20 million purchase.  After the journey from Ukraine to China, the Varyag was denied entry into Macau (though this refusal for berth was made clear to Chong Lot during its negotiations to purchase the ship) and then towed to a naval shipyard in Dalian. 

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Once it made it to Dalian, news of the Varyag quieted while the official Chinese line insisted that there was no carrier programme.  The refurbishment of the ship began in earnest in 2005, with a stint in the dry dock, and it was fitted with advanced weapons systems beginning in 2009. Reporters that focus on the PLAN reported all of the developments as they unfolded. The refitting in 2005 drew the attention of the Pentagon as it began in 2006 to devote a section to China’s potential carrier programme, with an emphasis on the Varyag, in its annual reports on China’s military developments. The PLA and Defence Ministry officials continued to deflect attention from the Varyag in official announcements, neither confirming nor denying the existence of a Chinese carrier programme. It’s unclear exactly when the PLAN took official control of the Varyag over from the Chong Lot Company. It wasn’t until June of this year, on the eve of the Varyag’s first sea trials, that China officially confirmed that it was in fact refitting the Varyag for use by the PLAN.

The history of the Varyag offers some insights for Sino-US relations and the lack of trust that characterizes the relationship. The carrier has been a news story associated with the PLAN since senior Chinese admirals first explored purchasing it in the early 1990s. But almost the entire time it was officially owned by Chinese entities, the Varyag has been presented as a non-military platform – when it has been acknowledged at all. 

To give China the benefit of the doubt, it’s possible that for most of the Varyag’s Chinese history it was a commercial entity. Perhaps up until the very point that it was fitted with advanced weapons systems (the point at which it must have been decided to be used as a military platform) it was a commercial endeavour. However, at some point the PLAN had to decide that the Varyag would figure in its military modernization. After all, Chinese admirals had been dreaming of, and calling for, Chinese carriers for decades. The fact that the Chinese decided to transform this supposed commercial venture into the most symbolically imposing of platforms for power projection, despite years of denial that they would do so, lends ammunition to those already wary of Chinese intentions and China’s official promises of benign intent. Furthermore, the lag in time between converting the ship into a military asset, which started at least in 2009, to the first official acknowledgement that it in fact was destined to be of military use, 2011, shows that China may not be completely honest or forthcoming in its military modernization, even when the truth is obvious.  

The lessons of the Varyag are, then, straightforward:  not only are future Chinese intentions subject to change, but also official statements about current plans and programmes may not be entirely true.  These two possibilities give cause for the raft of suspicions surrounding China’s military modernization and evolving foreign and security policies. As much as China tries to deflect or lash out against questions raised by the United States and others about its strategic intentions, the Varyag is a case in point as to why it’s prudent for others to hedge against a rising China.

The story of the Varyag very well could be a case of an opportunistic PLAN converting a failed business venture into a strategic asset. But the obvious outcome was a clear dissonance between official statements to the outside world and actual developments. Whether intentional or not, this dissonance was of China’s own making and serves as a lesson to those countries that are most in need of reassurances about the nature of China’s rise. China’s intentions and doctrines are subject to change, but China doesn’t feel it necessary to transparently convey these changes. That lesson is the root of the distrust that China so frustratingly perceives from its counterparts.  

Matt Anderson is a Resident Handa Fellow at the Pacific Forum CSIS.  

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