China’s Re-emergence as an Arms Dealer: The Return of the King?

Publication: China Brief Volume: 9 Issue: 14

China is now, on average, the world’s fifth largest arms exporter, after the traditional leading suppliers: the United States, Russia, France, and the United Kingdom.  In fact, in 2007 it was fourth in terms of global arms transfer agreements, ahead of France, Germany and Spain [1]. Nearly all of China’s arms transfers are to developing countries, and in this arena the Chinese defense industry is emerging as a formidable competitor.  In fact, China ranked third in terms of arms deliveries to the developing world in 2007 [2].  China’s largest markets are in Asia, the Middle East, and particularly Africa.  In fact, during the period 2004-2007, China was the single largest seller of arms to Africa; and its major customers include Pakistan, Egypt, Bangladesh, Iran, Zimbabwe, and Zambia.

All these signs point to China returning to the global stage as a major player in the international arms market.  In fact, China has not enjoyed sales this large since the 1980s, when it sold to both sides in the Iran-Iraq War. In 2007, Beijing signed arms exports agreements worth $3.8 billion, its highest sales figures in more than a decade [3].  In recent years, Chinese overseas arms sales have averaged more than $2 billion a year [4], considerably higher than during the 1990s, when Beijing averaged less than $1 billion annually in arms exports [5].  Despite these glowing sales figures, however, China faces the continual challenge of remaining competitive in a highly cutthroat business.  There are no guarantees of an enduring upswing in Chinese arms exports.

Leading Chinese weapons exports include:

•    The K-8 trainer jet:  China has exported nearly 250 of these lightweight trainer/attack jets since 2000, according to the Stockholm International Peace Research Institute (SIPRI) database on arms transfers [6].  Its biggest client has been Egypt, which bought 120 K-8s, most of which were assembled locally from kits, between 2001 and 2008.  Other customers include Ghana, Pakistan, Sri Lanka, Sudan, Zambia, and Zimbabwe, while Venezuela is in negotiations to purchase up to 24 K-8s.

•    The F-7MG fighter jet:  This aircraft is the export version of the People’s Liberation Army (PLA) Air Force’s F-7E, itself an upgraded adaptation of the MiG-21.  The F-7MG features a larger wing and, reportedly, a British radar [7].  China has sold more than a hundred of these fighters to Bangladesh, Namibia, Nigeria, Pakistan, and Sri Lanka, according the SIPRI Arms Transfers database, since the mid-1990s [8].

•    The JF-17 Thunder fighter jet:  The JF-17, also known as the FC-1, is a lightweight multi-role combat aircraft similar in design to the U.S. F-20 Tigershark.  The JF-17 was co-developed with Pakistan, which is currently producing the fighter for its air force; estimates are that Islamabad could buy up to 250 of the aircraft.  The aircraft is being specifically marketed to developing countries who need replace aging MiG-21, F-7, or F-5 fighters.  Azerbaijan, Sudan, and Zimbabwe have all been reported to have interest in buying the JF-17 [9].

•    The C-801/C-802 antiship cruise missile (ASCM):  These missiles, also known as the YJ-8 and YJ-82 (YJ stands for Yingji: "Eagle Strike"), respectively, are similar to the very effective French Exocet (the C-802 version being equipped with a solid rocket booster for extended range).  These ASCMs can be launched from ships, land, or aircraft.  Recent customers for these missiles include Algeria, Bangladesh, Indonesia, Iran, Myanmar, Pakistan, and Thailand [10].

•    The WZ-551 armored personnel carrier:  Although not a particularly high-tech system, the WZ-551 is notable for being sold widely around the world, including countries like Argentina, Gabon, Kenya, Kuwait, Nepal, Oman, Sri Lanka, Sudan, and Tanzania [11].  

Finally, it is worth noting that China has sold a number of small and medium-sized transport aircraft, mostly to African states.  These include the Y-12 (to Kenya, Nepal, Uganda, and Zambia) and the MA-60 (to Ghana, Nepal, and Zambia) [12].

A Tenuous Standing?

Still, China’s current high standing in the global arms marketplace remains tenuous.  Most of China’s biggest arms sales come from only a handful of customers, particularly Pakistan.  The 2007 figures were high mainly because the data included a couple of big deals with Pakistan, like the JF-17 fighter for instance (which Pakistan is co-producing with the Chinese) and four Jiangwei-class frigates.  It is not certain, therefore, that China will maintain such high levels of arms exports for the next several years.  For example, Myanmar [Burma] was a big buyer of Chinese arms during the 1990s, but its purchases have tapered off significantly in recent years, in favor of weapons from Russia, India and Ukraine [13].  

For the most part, China can still offer only a few advanced weapon systems (e.g. trainer jets and antiship cruise missiles) that are competitive on the global arms market, and its customers still remain basically the poor (e.g. African states) and the pariahs (e.g. Pakistan and Iran).  Additionally, a large chunk of Chinese arms exports includes small arms and ancillary equipment, such as trucks, uniforms, and field equipment.  Finally, many of China’s arms deals are still done at “friendship prices,” that is, selling arms at a discount, either for political purposes (i.e. cementing alliances or promoting cordial relations) or, increasingly, to secure links with oil-and mineral-rich nations, such as Nigeria, Sudan and Zimbabwe.  

Finally, it is important keep in mind that ranking fifth, fourth, even third as the largest arms exporter should not be exaggerated.  While China delivered $1.2 billion worth of arms to the developing world in 2007 to capture the number three position, the number one-ranked United States exported more than six times as much, or $7.6 billon, while Russia (number two), exported $4.6 billion, nearly four times as much as China [14].  Additionally, while China exported $7.8 billion worth of arms globally between 2000 and 2007, the United States exported over $92 billion worth; Russia was second with $36.2 billion worth of arms exports, and the United Kingdom third with nearly $34 billion worth.  Even Germany out-exported China by nearly 60 percent [15].  One good sales year does not necessarily presage a bright future.

Prospects for Big-Ticket Sales

In order to remain a leading arms exporter, China needs to come up with more competitive products.  The JF-17 fighter jet has already been mentioned as a possible big seller to countries needing a low-cost replacement for their aging inventories of MiG-21s or F-5s; the JF-17 reportedly costs between $15 million and $20 million apiece, much cheaper than a U.S.-built F-16, for example [16].  

An even more promising prospect for significant overseas sales is China’s new J-10 fighter jet.  This aircraft is a cousin to the Israeli Lavi (upon which it is based) and roughly equivalent in capabilities to the U.S. F-16C flown by several air forces around the world.  The J-10 started development in the mid-1980s and finally entered production for the People’s Liberation Army Air Force (PLAAF) about three or four years ago.  It is certainly a vast improvement over the 1960s- and 1970s-era Chinese and Soviet fighters that have filled out the PLAAF for decades, although probably not as good as the Su-27 or (particularly) the Su-30s acquired from Russia.  

There has in fact been considerable speculation that the Chinese might try and flood the global arms market with the J-10.  This aircraft could be a good buy, as it would probably be offered at cut-rate prices, certainly below the F-16, the Swedish Gripen, and other smaller combat aircraft.  Pakistan and especially Iran have been mentioned as prospective buyers [17].

Other potentially marketable products include the C-701 short-range antiship cruise missile (already sold to Iran and, reportedly, Hezbollah) [18], the FN-6 man-portable surface-to-air missile (exported to Sudan), and the KS-1A surface-to-air missile (sold to Malaysia) [19].

That said, the capabilities of most Chinese weapons systems remain unknown.  The J-10, for example, may be a very good aircraft, but its performance and reliability cannot be independently confirmed, and many countries may not wish to take a chance on it.  For its part, the JF-17 is a rather unremarkable aircraft, technologically speaking; buying used F-16s—of which there is currently a global abundance, given the downsizing of many air forces around the world—may be seen as a cheaper and more capable alternative.  

Finally, keep in mind that countries do not necessarily buy the cheapest weapon systems available—capabilities and effectiveness count, especially when it comes to military products.  Many countries, given the choice, will still pay a premium price to get a premium product.  For example, when Pakistan decided to acquire new submarines, it bought from France and Germany, not China, and while it is buying Chinese fighters, it is also purchasing F-16s from the United States.  

Even during the current global economic crisis, many potential buyers will still be hesitant to seriously consider Chinese weaponry more than they might normally, since they may have to live with these weapons for the next twenty to thirty years.  Instead, these countries are more likely to delay any big-ticket arms purchases in general, and wait until the economy recovers—like most Asian countries did during the financial crisis in the late 1990s.

One product area where the Chinese do have a considerable technological edge is ballistic missile systems, such as the DF-11 and B-611 short-range ballistic missiles.  The DF-11 (also known as the M-11) has been sold to Pakistan, while Turkey has acquired the B-611 [20].  Sales of longer-range missile systems, however, are restricted by the Missile Technology Control Regime (MTCR), to which China has agreed to abide.  

Chinese Arms Sales: Still an Uncertain Bet?

China is still extremely constrained when it comes to potential customers, the types of arms they may want to buy, and the types of arms it can sell.  Yet, Beijing will increasingly promote its arms on the global market and in the process it will score some coups when it comes to overseas sales.  Certainly, expanding arms exports continues to be a key business strategy for Chinese defense firms, but as much as it is for almost every arms manufacturer around the world.  Given the global overcapacity in armaments production and economic pressures to keep factories open and preserve jobs, everybody wants to get in on the arms-export business.  China will not be soon supplanting or joining the United States and Western Europe as a large supplier of sophisticated arms.

Notes

1. Richard F. Grimmett, Conventional Arms Transfers to Developing Nations, 2000-2007 (Washington, DC: Congressional Research Service, October 23, 2008,Table 8D, p. 67.
2. Grimmett, Conventional Arms Transfers, Table 2G, p. 52.
3. Grimmett, Conventional Arms Transfers, Table 1, p. 34.
4. Grimmett, Conventional Arms Transfers, Table 1, p. 34.    
5. See Richard A. Bitzinger, “Arms to Go: Chinese Arms Sales to the Third World,” International Security, Fall 1992.
6. SIPRI Arms Transfers database, http://www.sipri.org/databases/armstransfers/armstransfers.
7.  “Jian-7 Fighter Interceptor,” SinoDefence.com, http://www.sinodefence.com/airforce/fighter/j7.asp.
8. SIPRI Arms Transfers database.
9. “FC-1/JF-17 Multirole Fighter Aircraft,” SinoDefence.com, http://www.sinodefence.com/airforce/fighter/fc1.asp; Gareth Jennings, “JF-17 Production Commences,” Jane’s Air Forces News, January 24, 2008, http://www.janes.com/news/defence/air/jdw/jdw080124_2_n.shtml.
10. SIPRI Arms Transfers database.
11. SIPRI Arms Transfers database.
12. SIPRI Arms Transfers database.
13. SIPRI Arms Transfers database.
14. Grimmett, Conventional Arms Transfers, Table 2G, p. 52.
15. Grimmett, Conventional Arms Transfers, Table 8C, p. 66.
16.  “FC-1/JF-17 Multirole Fighter Aircraft,” SinoDefence.com.
17.  “Jian-10 Multirole Fighter Aircraft,” SinoDefence.com (http://www.sinodefence.com/airforce/fighter/j10.asp).
18. SIPRI Arms Transfers database.
19. SIPRI Arms Transfers database.
20. SIPRI Arms Transfers database.