Tensions in the arms sales relationship between Russia and China have been visibly on the rise in recent years. Yet, in November 2010, Moscow and Beijing announced a large new package of arms sales that appear to have turned a new leaf in this relationship. Much of the tension stemmed from the Chinese defense industry's practice of reverse engineering Russian weapons technology, indigenizing it and then reselling it in third party markets in competition with Moscow. In negotiations, China has long demanded that Russia sell it advanced technologies in its defense platforms or advanced weapons, something that Moscow has been loath to do regarding both the weapons and their components . Russia has also always been concerned that China might ultimately employ these advanced technologies and systems against it or its friends in Asia. 
For example, in 2006 it refused to sell certain sensitive space technologies to China (Radio Free Europe/Radio Liberty Newsline, December 27, 2006). Nevertheless the restoration of arms sales appears to be connected with a new turn in Sino-Russian relations in China’s favor. The fifth round of Sino-Russian strategic talks took place form January 23-25 and Russia’s arms sales organization, Rosoboroneksport, has announced that it sees China as Russia’s chief partner in Asia (Interfax, January 19). This turn in Sino-Russian ties, probably dictated form the highest levels of both governments, appears to have overridden Russia’s mounting concerns about Chinese military developments.
Russian concerns about Chinese competition in Asian, African, and Latin American arms markets and the fact that China’s J-11B and J-15 fighter planes were essentially "clones" of Russia’s SU-27 and Su-33 fighter planes, respectively, are public and cited. Coupled with China’s own growing domestic capability, these factors contributed to a sharp decline in Chinese military purchases, mainly of air and sea weapons (Oruzhiye Rossii, September 29, 2010; Wall Street Journal, December 6, 2010). Yet, whether or not China’s domestic capability had increased, there is little doubt of Russia’s anger over Chinese practices of copying its weapon systems, and the fact that there was no sign of Beijing stopping this practice. Consequently both sides had reason to slow down arms purchases and sales. Indeed, in 2009-10 China has reportedly not placed a major order with Russia and, according to foreign observers, at the Zhuhai Air show in November China displayed its biggest exhibition of aircraft for sale abroad, mainly built with Russian technology and a supposedly Chinese engine (Oruzhiye Rossii, September 29, 2010; Wall Street Journal, December 6, 2010).
China’s ambassador to Russia, Li Huei—at least publicly—attributes the decline in purchases to its own growing capabilities and claims that bilateral cooperation is actually moving to a higher phase while Russia is still implementing past contracts and transferring air, air defense, and naval weapons to China (Interfax, November 17, 2010). In other words, Li refused to discuss the charges of intellectual piracy in public. In fact, earlier this year Russia did send S-300 air defenses to China (Global Security Newswire, April 2, 2010; Reuters, April 2, 2010). So before the meting of the Inter-Governmental Commission on Military-Technical Cooperation there was no public yielding by either side. Russian producers like Sukhoi openly proclaimed their desire to ask probing question to China about its cloning of their systems . Likewise, Russian and French experts were equally frank in stating their concerns that Chinese ship-to-ship missiles might undercut them on price in third party markets . Finally both Russia and China are competing to bring out as soon as possible their fifth-generation fighter planes (Jane’s Defence Weekly, December 9).
Yet from subsequent developments it seems clear that there were other concerns on Russian minds that led them to resume arms and technology transfers to China--albeit at a reduced rate. First it is clear from the press record that China’s needs are changing. Although it still needs and is buying aerial platforms, China now manifests a growing interest in obtaining engines and technologies to maintain the air fleet that it has acquired by sale or by piracy from Russia. Russia clearly wants to sell China those engines and monopolize this situation, apparently believing that by doing so it will be able to keep selling it Russian aerial platforms and maintain its advantage in the Chinese weapon market (Interfax-AVN Online, November 17, 2010). Second, Russian arms sellers have found that the only way they can discuss their concerns about unlicensed copying is to actually have a relationship with China through formal sessions like that of the Intergovernmental Commission so they cannot simply cease and desist from selling weapons to China if they wish to influence its behavior (Interfax-AVN Online, November 17, 2010).
Third, the Russian government and defense ministry have announced ambitious plans to boost arms sales throughout the world in the next decade to finance concurrent Russian defense reforms. In 2010 alone, Moscow reportedly sold a record figure of $10 billion worth of arms (RIA Novosti, December 14, 2010). Yet at the same time Russian analysts fear that arms sales may actually drop because the markets that Russia found to compensate for reduced arms sales to China in the short run—Algeria, Vietnam, Syria, and Venezuela—cannot offset the size of the Chinese market over the long run (Trud, October 29, 2010). So while China may occupy a lower place or ranking among the customers for Russian defense systems, Beijing is eager to take advantage of those opportunities that are available to Russia, largely in aerial systems and engines . Fourth, even as Russian military policy is shifting (e.g. to make the Pacific Fleet the main Russian fleet) because of the Chinese threat, Moscow needs to keep an eye on Chinese military policy, and the best way to do so is to preserve arms sales contracts .
For its part, China has entered into open rivalry if not confrontation with the United States over Southeast Asia, arms sales to Taiwan, the value of its currency, and the six-party talks with Korea. Beijing see the progress of the United States’ reset policy with Russia, and appears eager to improve its ties with Moscow and resolve outstanding issues, among which include the issues of piracy and the lack of arms sales. China also clearly feels the need to continue acquiring foreign systems for those sectors where it has yet to create an adequate domestic base for its own production (OSC Analysis, FBIS SOV, December 3, 2010). As a result, at the most recent meeting of the Inter-Governmental Commission in November 2010 the two sides signed a protocol for resumption of sales of spare parts, engines for aircrafts, naval and aerial weapons systems and the design of defensive products in the interests of the Chinese side. The two sides also established a working group to monitor developments growing out of the 2008 bilateral agreement on intellectual piracy (which has not stopped China from its ongoing "cloning" of Russian systems) . According to Mikhail Dmitiriev, director of Russia’s Federal Service for Military and Technical Cooperation, the agreement "provides "the full picture of the contracts realization process and protects from unsanctioned capturing of our intellectual property," although China, he claimed has never transferred that property to a third country.
China is reportedly interested in buying at least 100 117-S aircraft engines (the upgraded version of the Al-31F engine intended for the SU-35 Fighter, the S-400 air defense missile, at least a 100 RD-93 engines, the existing Al-31F and Al-31FN engine for its existing Fighter component, consisting of SU-27s, SU-30s and its own J-10 (a knockoff of the Israeli Lavi Fighter). Russia has offered it New Ilyushin-476 military cargo planes, MI-171E Helicopters, and the SU-35 Fighter and the Irbis-e radar station. Meanwhile Rosoboroneksport, Russia’s designated arms seller, hopes to reach agreement with China on a formula for licensed arms production by Chinese firms of Russian arms that protects Russian intellectual property (Vedomosti Online, November 23, 2010; Interfax-AVN Online, November 16, 2010; Interfax-AVN Online, in English, November 18, 2010; ITAR-TASS, November 16, 2010; Interfax, November 15, 2010; RIA Novosti, November 16, 2010). In other words, Moscow has agreed again to offer China some of its most advanced systems despite prior misgivings about doing so. Yet, it is doubtful that the establishment of these mechanisms to oversee the proper enforcement of Russian intellectual property will be notably successful in preventing China from its long-standing and pervasive practices of copying Russian systems and selling them abroad after indigenizing them. Too many vested interest groups and long-standing practices are involved in this process for it to stop just to please Russia, although it is likely that some cosmetic efforts will be made for a while. In any case, Beijing has alternatives to Russia. For example, China is already exporting tanks made with Ukrainian engines and Ukraine will participate in the modernization of China’s Y-5 aircraft, probably not the last such occurrence either (ITAR-TASS, November 23, 2010).
These trends suggest that China remains, to some degree, dependent on Russia for the provision of advanced weapons and defense technologies, notably aircraft engines. This would also suggest a reason why Russian analysts profess not to be unduly alarmed at the unveiling of China’s fifth-generation J-20 stealth fighter. They apparently believe that despite the hoopla attached to this unveiling, that China will remain behind Russia and the US in aircraft technology for a long time even if it will try to compete with Russia once it starts selling the plane (RIA Novosti, December 29, 2010). It should be noted here as well that the Pentagon too has its doubts as to just how advanced the J-20’s technology is (Bloomberg, January 26). Meanwhile China also needs to ensure that Russia does not lean closer to Washington than it does to Beijing. On the other hand, Moscow wants to ensure that a Sino-American rapprochement does not occur at its expense and, more importantly, it still has no means of controlling what China does with its systems. Despite Moscow’s successes in selling arms to smaller countries like Algeria and Vietnam in the global arms market, Moscow still needs to be able to sell in large quantities to China. Furthermore, it needs a friendly China on its border even as there are growing signs of alarm in Russia about China’s economic and military prowess.
The strain in the bilateral arms sales and geopolitical tension between a rising China and declining Russia still remain. Yet for the time being the two sides appear to have reached a mutual accommodation. A close examination of the accords reached here, however, suggests that Russia really cannot control China and furthermore that it needs Chinese cooperation more than China does Russian cooperation. The overall turn in the relationship indicates China’ growing ability to induce Russian cooperation even as it infringes on Russian interests. This could lead to more tension if Russia strives to break free of Chinese power. While there may be an agreement for now, one should not be unduly complacent about it lasting for a long and, more importantly, untroubled time.
Russian concerns about Chinese competition in Asian, African, and Latin American arms markets and the fact that China’s J-11B and J-15 fighter planes were essentially "clones" of Russia’s SU-27 and Su-33 fighter planes, respectively, are public and cited. Coupled with China’s own growing domestic capability, these factors contributed to a sharp decline in Chinese military purchases, mainly of air and sea weapons (Oruzhiye Rossii, September 29, 2010; Wall Street Journal, December 6, 2010). Yet, whether or not China’s domestic capability had increased, there is little doubt of Russia’s anger over Chinese practices of copying its weapon systems, and the fact that there was no sign of Beijing stopping this practice. Consequently both sides had reason to slow down arms purchases and sales. Indeed, in 2009-10 China has reportedly not placed a major order with Russia and, according to foreign observers, at the Zhuhai Air show in November China displayed its biggest exhibition of aircraft for sale abroad, mainly built with Russian technology and a supposedly Chinese engine (Oruzhiye Rossii, September 29, 2010; Wall Street Journal, December 6, 2010).
China’s ambassador to Russia, Li Huei—at least publicly—attributes the decline in purchases to its own growing capabilities and claims that bilateral cooperation is actually moving to a higher phase while Russia is still implementing past contracts and transferring air, air defense, and naval weapons to China (Interfax, November 17, 2010). In other words, Li refused to discuss the charges of intellectual piracy in public. In fact, earlier this year Russia did send S-300 air defenses to China (Global Security Newswire, April 2, 2010; Reuters, April 2, 2010). So before the meting of the Inter-Governmental Commission on Military-Technical Cooperation there was no public yielding by either side. Russian producers like Sukhoi openly proclaimed their desire to ask probing question to China about its cloning of their systems . Likewise, Russian and French experts were equally frank in stating their concerns that Chinese ship-to-ship missiles might undercut them on price in third party markets . Finally both Russia and China are competing to bring out as soon as possible their fifth-generation fighter planes (Jane’s Defence Weekly, December 9).
Yet from subsequent developments it seems clear that there were other concerns on Russian minds that led them to resume arms and technology transfers to China--albeit at a reduced rate. First it is clear from the press record that China’s needs are changing. Although it still needs and is buying aerial platforms, China now manifests a growing interest in obtaining engines and technologies to maintain the air fleet that it has acquired by sale or by piracy from Russia. Russia clearly wants to sell China those engines and monopolize this situation, apparently believing that by doing so it will be able to keep selling it Russian aerial platforms and maintain its advantage in the Chinese weapon market (Interfax-AVN Online, November 17, 2010). Second, Russian arms sellers have found that the only way they can discuss their concerns about unlicensed copying is to actually have a relationship with China through formal sessions like that of the Intergovernmental Commission so they cannot simply cease and desist from selling weapons to China if they wish to influence its behavior (Interfax-AVN Online, November 17, 2010).
Third, the Russian government and defense ministry have announced ambitious plans to boost arms sales throughout the world in the next decade to finance concurrent Russian defense reforms. In 2010 alone, Moscow reportedly sold a record figure of $10 billion worth of arms (RIA Novosti, December 14, 2010). Yet at the same time Russian analysts fear that arms sales may actually drop because the markets that Russia found to compensate for reduced arms sales to China in the short run—Algeria, Vietnam, Syria, and Venezuela—cannot offset the size of the Chinese market over the long run (Trud, October 29, 2010). So while China may occupy a lower place or ranking among the customers for Russian defense systems, Beijing is eager to take advantage of those opportunities that are available to Russia, largely in aerial systems and engines . Fourth, even as Russian military policy is shifting (e.g. to make the Pacific Fleet the main Russian fleet) because of the Chinese threat, Moscow needs to keep an eye on Chinese military policy, and the best way to do so is to preserve arms sales contracts .
For its part, China has entered into open rivalry if not confrontation with the United States over Southeast Asia, arms sales to Taiwan, the value of its currency, and the six-party talks with Korea. Beijing see the progress of the United States’ reset policy with Russia, and appears eager to improve its ties with Moscow and resolve outstanding issues, among which include the issues of piracy and the lack of arms sales. China also clearly feels the need to continue acquiring foreign systems for those sectors where it has yet to create an adequate domestic base for its own production (OSC Analysis, FBIS SOV, December 3, 2010). As a result, at the most recent meeting of the Inter-Governmental Commission in November 2010 the two sides signed a protocol for resumption of sales of spare parts, engines for aircrafts, naval and aerial weapons systems and the design of defensive products in the interests of the Chinese side. The two sides also established a working group to monitor developments growing out of the 2008 bilateral agreement on intellectual piracy (which has not stopped China from its ongoing "cloning" of Russian systems) . According to Mikhail Dmitiriev, director of Russia’s Federal Service for Military and Technical Cooperation, the agreement "provides "the full picture of the contracts realization process and protects from unsanctioned capturing of our intellectual property," although China, he claimed has never transferred that property to a third country.
China is reportedly interested in buying at least 100 117-S aircraft engines (the upgraded version of the Al-31F engine intended for the SU-35 Fighter, the S-400 air defense missile, at least a 100 RD-93 engines, the existing Al-31F and Al-31FN engine for its existing Fighter component, consisting of SU-27s, SU-30s and its own J-10 (a knockoff of the Israeli Lavi Fighter). Russia has offered it New Ilyushin-476 military cargo planes, MI-171E Helicopters, and the SU-35 Fighter and the Irbis-e radar station. Meanwhile Rosoboroneksport, Russia’s designated arms seller, hopes to reach agreement with China on a formula for licensed arms production by Chinese firms of Russian arms that protects Russian intellectual property (Vedomosti Online, November 23, 2010; Interfax-AVN Online, November 16, 2010; Interfax-AVN Online, in English, November 18, 2010; ITAR-TASS, November 16, 2010; Interfax, November 15, 2010; RIA Novosti, November 16, 2010). In other words, Moscow has agreed again to offer China some of its most advanced systems despite prior misgivings about doing so. Yet, it is doubtful that the establishment of these mechanisms to oversee the proper enforcement of Russian intellectual property will be notably successful in preventing China from its long-standing and pervasive practices of copying Russian systems and selling them abroad after indigenizing them. Too many vested interest groups and long-standing practices are involved in this process for it to stop just to please Russia, although it is likely that some cosmetic efforts will be made for a while. In any case, Beijing has alternatives to Russia. For example, China is already exporting tanks made with Ukrainian engines and Ukraine will participate in the modernization of China’s Y-5 aircraft, probably not the last such occurrence either (ITAR-TASS, November 23, 2010).
These trends suggest that China remains, to some degree, dependent on Russia for the provision of advanced weapons and defense technologies, notably aircraft engines. This would also suggest a reason why Russian analysts profess not to be unduly alarmed at the unveiling of China’s fifth-generation J-20 stealth fighter. They apparently believe that despite the hoopla attached to this unveiling, that China will remain behind Russia and the US in aircraft technology for a long time even if it will try to compete with Russia once it starts selling the plane (RIA Novosti, December 29, 2010). It should be noted here as well that the Pentagon too has its doubts as to just how advanced the J-20’s technology is (Bloomberg, January 26). Meanwhile China also needs to ensure that Russia does not lean closer to Washington than it does to Beijing. On the other hand, Moscow wants to ensure that a Sino-American rapprochement does not occur at its expense and, more importantly, it still has no means of controlling what China does with its systems. Despite Moscow’s successes in selling arms to smaller countries like Algeria and Vietnam in the global arms market, Moscow still needs to be able to sell in large quantities to China. Furthermore, it needs a friendly China on its border even as there are growing signs of alarm in Russia about China’s economic and military prowess.
The strain in the bilateral arms sales and geopolitical tension between a rising China and declining Russia still remain. Yet for the time being the two sides appear to have reached a mutual accommodation. A close examination of the accords reached here, however, suggests that Russia really cannot control China and furthermore that it needs Chinese cooperation more than China does Russian cooperation. The overall turn in the relationship indicates China’ growing ability to induce Russian cooperation even as it infringes on Russian interests. This could lead to more tension if Russia strives to break free of Chinese power. While there may be an agreement for now, one should not be unduly complacent about it lasting for a long and, more importantly, untroubled time.
