Last week, Russia delivered 15 additional batteries of S-300 surface-to-air missiles to China, making good on an about 2 billion dollar deal signed in the mid-2000s. Yet despite the publicity surrounding the sale, the Russian-Chinese arms transfer relationship is in trouble.
Recent years have seen a precipitous fall in Chinese purchases of Russian military equipment and technologies. Whereas until a few years ago Beijing was buying large quantities of Moscow’s surplus Soviet-era military products, during the past few years the Chinese have declined to purchase any major weapons systems from Russia.
China has already acquired about a dozen S-300 batteries from Russia under contracts signed in previous years. But the S-300 is a Soviet-era air defence system, with each battery consisting of four truck-mounted launchers each holding four missile tubes. And, although the late-model versions of the S-300 (dubbed ‘The Favourite’ by Russians) delivered a few days ago are highly capable, the Russian military is phasing out the system’s use. Russian units are replacing it with the more effective S-400 (code-named ‘Triumph’ by NATO), which has additional capabilities against stealthy targets as well as some ballistic missiles. Meanwhile, Russia’s defence industry is now developing an even more advanced surface-to-air missile system, the S-500, which is potentially capable of intercepting targets in outer space flying at hypersonic speeds of five kilometres a second.
Last week’s shipment underscores two key features of the current Russia-China arms transfer relationship. First, Russia is presently sending China only weapons systems based on Soviet-era technology, most of which were manufactured during the Soviet era. Second, China purchased these items several years ago. In recent years, in contrast, China has largely stopped buying complete weapons systems from Russia, primarily because the Chinese defence industry can now match Soviet-era technologies, while Russia refuses to sell China its most advanced weapons.
This change has transformed the shape of Sino-Russian commerce. Whereas before 2007 Russia racked up steady trade surpluses, during the past three years the terms of trade have abruptly shifted in China’s favour. Today, China overwhelmingly buys commodities, especially natural resources like oil and timber, from Russia. Many of these items have fallen sharply in value due to declining world prices. In contrast, Russians have been purchasing a growing volume of Chinese electronics, automobiles, consumer appliances and machinery.
In the past, Moscow could count on Beijing buying numerous high-tech weapons systems from Russia’s military industrial complex. And following the decision by Western governments to impose an arms embargo on China after the 1989 Tiananmen Square incident—a ban that remains largely in force today—China emerged as one of the most reliable clients of Russian defence items.
For almost two decades, China accounted for between one-fourth and one-half of Russia’s foreign military sales, with Beijing buying more military products from Russia than from all other countries combined. During the 1990s, the value of these purchases ranged anywhere up to about one billion dollars per year. During the mid-2000s, this figure sometimes rose above two billion dollars per annum. These sales helped make Russia the largest seller of major conventional weapons to Asian countries between 1998 and 2005, ahead of the United States.
Indeed, in several respects, China and Russia have been natural arms sales partners. China could obtain sophisticated conventional weapons from Russia that its emerging military industrial complex was still learning to produce. Meanwhile, Russian companies received considerable revenue at a time when their government had so little money that it could buy few if any weapons systems for Russia’s own armed forces. Without the Chinese purchases, many more Russian defence companies and their sub-contractors might have gone bankrupt.
Today, though, the situation has changed radically. According to the latest data released by the Stockholm International Peace Research Institute (SIPRI), China imported more major conventional weapons between 2005 and 2009 than any other country. Yet China’s share of global arms imports decreased to an average of 9 percent during this period, a much lower percentage than in previous years. The drop in Chinese purchases of complete Russian weapons systems was particularly acute during the last three years. In 2009, China bought only a few combat helicopters from Russia, as well as some advanced engines that could be used to power military as well as civilian vehicles.
Several developments have contributed to the end of the traditional Chinese-Russian arms relationship. First, the Chinese military industrial sector has become much more sophisticated. Chinese defence firms can now manufacture considerably more advanced weapons systems, reducing the country’s demand for the kind of late Soviet weapons platforms China bought in abundance in previous years. At the same time, the Russian government has declined to sell its top-of-the-line military technology to China, with Russian policymakers worrying that providing the Chinese People’s Liberation Army its cutting-edge defence products could threaten existing military balances in the Asia Pacific region and also antagonize other governments, including Japan and the United States, worried about China’s rising military power.
But perhaps of more immediate concern are Russian fears about China’s ability to use Russian imported weapons to improve the quality of its own military exports. Russian analysts cite past instances when Chinese technicians copied Russian weapons systems and, after making slight adjustments, sold them to third parties. So far, Chinese firms have only managed to displace Russian military sales from a few low-value developing country markets. But already Russian policymakers, aware of Chinese scientific and technological prowess, fear losing possible future defence sales to countries willing to accept the only slightly lower performance capabilities of Chinese weapons systems available for much lower prices.
The danger of this development became clear last year when Iranian government representatives suggested that if Russia refused to fulfil its contract to deliver advanced S-300 air defence systems to Iran, they would instead buy a PRC-made system, the HongQi-9/FD-2000 surface-to-air missile. Although this transfer didn’t happen, Western and Israeli pressure on Russia to constrain its arms sales to Iran has already led to Tehran emerging as the second-largest purchaser of Chinese weapons during the past 5 years, buying 14 percent of China’s military exports by value. From 2005 through 2009, Iranian imports from China included over 1,000 anti-air and anti-ship missiles as well as about 50 infantry combat vehicles.
Until now, Russian officials have resigned themselves to selling a significantly lower volume of weapons to China rather than risk exporting its most sophisticated weapons to the PRC. Anatoly Isaikin, general director of Rosoboronexport, predicts that Chinese purchases in coming years will amount to only 10 percent of Russian arms exports. Fears of Chinese copying reportedly led the Russian government to reassess the wisdom of selling highly advanced Su-33 planes for possible use on future Chinese aircraft carriers. The Russian press reports that the Chinese asked to buy only two Su-33 planes for a ‘trial.’
One reason for Russian equanimity is that, for the moment, Moscow has many alternative military clients. According to the latest SIPRI data, Russia is the world’s second-largest exporter of major conventional weapons, behind the United States. The Asia-Pacific region is the main destination for major Russian arms, accounting for more than two-thirds of Russian defence exports during the 2005–2009 period. Combat aircraft were Russia’s best export item, comprising 40 percent of Russia’s global sales. India purchased 82 Sukhoi-30 fighter aircraft during the last 5 years, while Malaysia bought 18 of these planes.
But this favourable environment might change quickly if Russian domestic military purchases decrease again, if India (the other major buyer of Russian weapons) imports fewer weapons and if the anticipated compensatory growth of new markets for Russian military exports fails to occur.
Ultimately, despite their reservations, Russian officials might weigh the risks of selling the most advanced weapons to China a little differently if they consider the alternative—another possible collapse of their defence industry.
Richard Weitz is a senior fellow and director of the Hudson Institute’s Center for Political-Military Analysis.