The Sino-Russian Race to sell Arms

In 1989, following the Tiananmen Square incident, China was chastised by all of her suitors. The U.S., France, and Britain, all of whom eagerly sold weapons to China throughout the 1980’s, slapped Beijing with an arms embargo that still remains in effect (although this might change later this year). The West assumed that such an embargo on China would cripple the PRC’s nascent military-industrial complex because China’s relationship with the only other major arms supplier, the Soviet Union, was still highly tentative at best. Following the collapse of the USSR, however, Russia eagerly stepped in to fill the void. In fact, according to a U.S. Congressional Report, from 2000 to 2008, 95% of China’s arms purchases came from Russia (for a total of approximately $16 billion). Furthermore, between 2002 and 2006, China accounted for 45% of Russia’s overall weapons sales (the next largest buyer, India, accounted for 25%). But over the last four years this once-budding relationship has imploded. According to Anatoly Isaikin, Director General of Rosoboronexport, only 18% of Russian arms exports in 2009 went to China. Moreover, Russia has completely stopped selling China the advanced Su-27MK and S-30MK2 fighters and the Varshavyanka-class diesel submarines. Instead, most of Russia’s sales to China now constitute military transport aircraft, fuel tankers, and aircraft engines. Some analysts blame the growth of China’s military capability for this precipitous decline in sales. According to Alexander Nekrassov, for instance, a “desperate Russia” now begs the disinterested Chinese to buy her guns. This romance, however, is far more complex and ending the relationship with China was as much Moscow’s choice as it was Beijing’s.

The drop in China’s imports from Russia parallels the rise of Beijing’s arms exports to the rest of the world. However, the majority of the weapons that China sells are not designed by the Chinese, but rather reverse engineered from models supplied by Russia. For example, China’s best-selling air defense system, the FT-2000, is a hybrid of American Patriot and Russian S-300PMU technology. It’s not as good as the Russian model, but is a cheaper and generally effective alternative. The Russians knew perfectly well that the Chinese were reverse engineering their weapons, but generally didn’t care because Russia’s top brass didn’t consider China to be a major military competitor. In 2006, the year that Russia decided to curtail weapons sales to China, Yury Baluyevsky, chief of the Russian general staff, said that it would take China until 2050 to become a “mighty, world-class military power”. It was not a fear of strategic competition that caused Russia to stop selling weapons to China, but rather the increasing capability of China to reverse engineer Russia’s best technology and then sell it on the open market.

The decline in Russo-Chinese weapons sales began in 2007 when Russia’s economy was still booming. Today, with Russia mired in a deep recession, the military-industrial sector is regaining the importance that it held in the 1990’s when weapons sales were the only way for the cash-strapped Kremlin to make money. The Russians have been working hard to diversify their customer base—signing a long-term contract with Algeria, working closely with Syria, increasing their weapons sales to Africa. However, in all those areas Russia has encountered stiff competition from Chinese weapons manufacturers. In this week’s China Brief, Cynthia Watson details the growth of China’s exports to Latin America, an area that has seen a 50% increase in arms purchases over the last five years. However, the Chinese are not the only ones making inroads in the Western Hemisphere – in the last year Russia has also substantially increased sales to Venezuela, Brazil, and Cuba.

Both Russia’s and China’s military budgets have been growing at an annual rate of 10% over the last ten years. If this trend continues we are likely to see increasingly vicious competition between Russian and Chinese weapons manufacturers throughout the world. This, in turn, could lead to a closer relationship between Russia and China’s strategic competitors (to whom China is hesitant to sell weapons). Stephen Blank wrote an excellent article in Eurasia Daily Monitor about Russia’s weapons sales to Vietnam. Russian’s dogged attempts to impress India at the Def Expo 2010 have also made headlines throughout the world. The accelerating speed of China’s rise is causing tectonic shifts throughout Eurasian geopolitics. It remains to be seen what effects this will have on the Sino-Russian strategic partnership.