Why Russia Sale Military Hardware To China Knowing China Will Reverse Engineer Its Technology?

J-11A, a copy of Russian Su-27 fighter jet.

The deal, announced by Russian defense conglomerate Rostec, makes China the first foreign operator of the Sukhoi Su-35, an upgraded fighter jet. Russian daily newspaper Kommersant quoted Rostec CEO Sergey Chemezov as saying: “Russia has delivered 24 Su-35 and S-400 to China.”

The agreement reportedly includes not only the supply of 24 jets to the People’s Liberation Army Air Force (PLAAF) for a total of $2 billion ($83 million per unit) but also the delivery of ground support equipment and reserve aircraft engines. The first batch of the planes, with the NATO reporting name Flanker-E, is expected to be delivered next year.

Su-35 and S-400 will not be the last military hardware Russia has delivered to China and Russia is in talk with China to build Su-57 in China for Peoples Liberation Army Navy as a navalized variant of Su-57. Let’s look at why Russia supplies arms to China knowing China has zero respect for foreign intellectual property.

Russian Rubble Is Dying  

Russia recently sent several Su-35 fighter jets to the Khmeimim air base in Syria, marking the first time that the aircraft have been deployed to a combat zone. In the coming years, the Su-35 will not only be critical to Russian aerial campaigns in the Middle East, but may also affect the balance of power in East Asia: Russia is set to deliver 24 Su-35s to China over the next two years.

In the second major Russo-Chinese arms deal since the beginning of the Ukraine crisis, Russia agreed to sell two dozen Su-35s to China for $2 billion. In 2014, Russia and China signed a contract for S-400 surface-to-air missile systems that was estimated to be worth at least $1.9 billion. However, neither deal should be seen as a consequence of the Ukraine crisis: negotiations on both deals began before the EuroMaidan Revolution, and most points of contention were resolved by 2014.

Before the Su-35 contract was signed, Russian arms export to China had been barely growing, staying in the range of $1.5 billion to $2 billion per year. The arms trade between the two countries can soon be expected to return to the “golden age” of the late 1990s and early 2000s, when it reached $2.7 billion per year.

Russian concerns -technology theft

In a rare public display of frustration between Moscow and Beijing, Russian state defense conglomerate Rostec accused China of illegally copying a broad range of Russian weaponry and other military hardware.

“Unauthorized copying of our equipment abroad is a huge problem. There have been 500 such cases over the past 17 years,” said Yevgeny Livadny, Rostec’s chief of intellectual property projects on Dec. 14. “China alone has copied aircraft engines, Sukhoi planes, deck jets, air defense systems, portable air defense missiles, and analogs of the Pantsir medium-range surface-to-air systems.”

Moscow soured on the relationship after a number of Russian weapons systems were copied by Beijing — most famously the Su-27/30 fighter, which became the J11. The aircraft were originally produced under a licence agreement, which Russia accused China of violating when it produced its own version of the plane.

“That is something the Chinese do all the time in every sector of the economy,” said Mr Kashin. “You just have to calculate the risk.” After that, “there was a pause” starting in 2004, said Mr Pukhov. “We were sick of their reverse engineering and their local designers managed to convince the political leadership that they could do this all themselves.”

But by 2014 a number of factors had combined to bring the two countries back together. China decided it still needed Russian technology. Song Zhongping, a Chinese military expert in Beijing, said that while Russia’s defence assistance to China was not on the scale of the “tremendous boost” of the 1980s and 1990s, “Russian weapons do improve the combat capability of the PLA”.

Rostec’s complaint about Chinese reverse engineering comes at a time when the arms trade between the two countries is thriving. According to the Stockholm International Peace Research Institute, Russia was by far China’s largest weapons supplier between 2014 and 2018, accounting for 70% of Beijing’s arms imports during that period.

Even Russia’s most advanced weaponry is not off-limits. Russia sold six of its S-400 anti-aircraft systems and 24 of its Su-35 fighter jets to China in 2015 for $5 billion.

Despite Moscow’s ire over Beijing’s theft of technology, it is unlikely to cut back arms exports to China anytime soon. Geopolitical and economic interests provide Russia with a strong incentive to downplay Chinese reverse engineering, experts say.

The Chinese had been interested in purchasing the Su-35 for several years, with experts pointing to Beijing’s particular interest in the aircraft’s engine technology, an area in which China still lags behind.

China has moved towards developing its own advanced weapons, in part by copying Russian technology, say experts

In fact, the Chinese have not yet been able to master key military technologies, especially regarding jet engines, as Keith Crane, a senior economist at the US-based RAND corporation, pointed out. “Despite the Chinese government’s preference to purchase domestically, the PLAAF has successfully lobbied to purchase Russian aircraft because they have been superior to purely domestic models.”

Given the copyright issues, there were strong indications that Russia wasn’t initially willing to sell its latest Su-35 technology to China. “The argument was that China was likely to buy a small number of aircraft just to learn about the technology and copy it. Thus, any order placed must have been be profitable enough to offset the possible loss of technology,” SIPRI expert Wezeman told DW.

Geopolitical factors

It is nevertheless striking that the Russians ultimately agreed to the deal, despite their intellectual property concerns. So why clinch the deal now? On the one hand, Wezeman points out that the Chinese will probably not get the technology transfers needed for a high-level maintenance center for the aircraft, thus making it more difficult for anyone to copy from the 24 units being sold.

But there are also geopolitical interests at stake. It seems that Moscow has decided to set aside its previous reservations and significantly intensify its relations with China – including in the military sector – as a consequence of its currently tense relations with the West. In fact, analysts such as Moritz Rudolf argue that the Ukraine crisis and the Western embargo against Russia have served as catalysts for the completion of arms sales negotiations.

“In the past, Russia would not have sold its most modern military technology to China. One of the key reasons for the policy shift are financial constraints within Russia,” Rudolf, who is a research associate at the Germany-based Mercator Institute for China Studies (MERICS), told DW, adding that the S-400 missile defense systems deal, which was officially announced this April, clearly illustrates this.

Global Arms Import. Source DW News.

Missile technology, especially in advanced air-defense missile systems, is another area where Beijing still shows interest in Russian systems or technologies for use in Chinese-developed systems. The S-400 air-defense missile system is, next to the Su-35, the main Russian weapon that has been on the negotiating table for some time.

Closer ties

As a result of the deteriorating relations between Russia and the West, Moscow has been moving closer towards Asia, particularly Beijing. Since 2014, a number of significant economic deals have been signed with China, especially with regard to energy exports.

Political relations have become ever closer. Most symbolically, Chinese President Xi Jinping traveled to Moscow in May 2015 to participate in Russia’s Victory Day parade, an event that was shunned by most Western leaders. In return, Russian President Vladimir Putin was present in Beijing in September 2015 to join Chinese celebrations of the 70th anniversary of victory over Japan.

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The Russian leader has even begun to describe China as Russia’s “natural ally” and proclaimed that relations are now at their “best in all their many centuries of history,” analyst Brown told DW.

Regional concerns

China’s neighbors will be concerned about the latest Sino-Russian arms deal given that the Su-35 is widely regarded as one of the best aircraft of its type in the world. “As such, it will add considerably to the current capabilities of the Chinese air force, thereby strengthening Beijing’s ability to project power in the East and South China Seas,” said analyst Brown.

Above all, he added, there must be concern that East Asia could slowly start to be divided into two rival camps, with the United States and allies on one side, and China and Russia on the other. Initial signs of such a division might be found in the recently agreed Trans-Pacific Partnership, which, although including several countries in the region, excludes both China and Russia.

A difficult relationship

However, wide gaps remain between the two countries. For instance, MERICS analyst Rudolf points out that while Putin and Xi have successfully negotiated milestone projects, putting them into practice has become a key challenge in the bilateral relationship. One important example includes the $400 billion “Power of Siberia” gas pipeline project, which is not progressing as expected, said Rudolf. “In addition, key infrastructure projects such as the Altai-pipeline could fail due to financing difficulties.”

And while the countries have stepped up their security cooperation within the Shanghai Cooperation Organization, they still compete over influence in Central Asia. “Beijing’s ‘One Belt, One Road’ initiative and the Russia-initiated Eurasian Economic Union are not compatible in the long term,” Rudolf added.

Similar strains can be found in defense ties, where Russia has been bolstering cooperation with China’s rival India, already Asia’s largest weapons importer. “Whereas China was the most important client for Russia’s military aircraft in the past, currently India is as important. Moscow is much more comfortable working with the Indian than with the Chinese industry for a variety of reasons, including concerns about Chinese attempts to steal Russian intellectual property,” said China expert Crane.

Su-35 And S-400 May Not Be The last major order

Given that the Chinese have mastered most military technologies and have thus become less reliant on Russian defense imports, Ben Moores, senior defense analyst at analytics firm IHS, says he sees no real intensification of Sino-Russian military ties in the near future. “The SU-35 will probably be the last major sale from Russia to China,” he told DW. “While there is a lot of talk about military co-operation, there is very little action or real substance. China doesn’t need Russia as much as Russia needs China.”

China still shows interest in advanced air-defense missile systems such as the S-400

The Chinese market is still important to Russia, accounting for a quarter ($2.4 billion) of all Russian sales so far this year. But the problem for Moscow is that Beijing only buys a small amount of a weapons system and then copies it. “The one area they can’t do this is engines but they are spending huge amounts to catch up. Bear in mind that China spends about $31 billion on procurement every year, so $2 billion isn’t a great deal to China,” said Moores.

If anything, he pointed out, Chinese imports as a percentage of all procurement spending have fallen over the longer term. “While Russian exports to China are not expected to fall in the short to medium term, I don’t see China making any new large orders over the coming decade. The Su-35 is almost certainly the last one,” said Moores.

It remains to be seen what impact a decline in Chinese orders would have on Russia’s defense industry. For the time being, the sector has a solid backlog of orders from Russia’s defense ministry.

The Russian Rationale

The contract has already been a political success for Moscow, highlighting Beijing’s reliance on Russian defense equipment despite its frequent claims of military independence.  

The deal has also been an economic success for Russia, in part because of the continued devaluation of the ruble. Since the ruble lost half of its value in late 2014, it has become much more profitable to export weapons, which are manufactured almost exclusively with Russian parts and materials. The deal may substantially improve the financial standing of the United Aircraft Corporation and the Komsomolsk-on-Amur Aircraft Production Association (KNAAPO), the largest and most important manufacturer of aircraft in Russia.

The sale may also lead to contracts for systems and components to be used in new Chinese fighter jets, as well as agreements on technology transfers or research and development. Lastly, the sale improves the prospects for sales of Su-35s to other countries. Indonesia is expected to be the next state to order the jet.

Chinese Interests

Beijing’s rationale for buying Su-35s is less straightforward. China has demonstrated that it can independently design and produce 4++ generation fighter jets, and is now working on two fifth-generation aircraft, the J-20 and the J-31. As China’s domestic production capabilities have increased, nationalist elements of the Chinese government have grown louder in their opposition to the purchase of foreign military equipment. What’s more, the sale of the Su-35s will not significantly boost the combat capability of the Chinese air force, as 24 jets will only be enough for one regiment.

Some have suggested that the Chinese bought the jets in order to reverse engineer them, but this is highly unlikely. The Su-35’s engines and avionics, including its powerful Irbis radar system, cannot be reverse engineered in any reasonable amount of time. 

The purchase is part of a larger Chinese push to develop its air force. Of the two Chinese aircraft being developed—the J-20 and the J-31—only the J-20 can be considered a true fifth-generation fighter. The J-31 uses stealth technology, but its main systems and components are borrowed from 4+ generation aircraft, including the J-10B, J-16, and FC-1. As for the J-20—the pinnacle of Chinese aviation engineering—it is unclear if and when it will be ready for combat, if the experience of the United States and other countries working on fifth-generation jets is any guide. 

Over the next ten to fifteen years, fighter jets based on the Su-27, such as the J-11B, J-11BS, J-15, and J-16, will constitute the core of Chinese air power. China is already working on upgrading them. It is currently testing the revamped J-11D, which is equipped with an active phased array radar and other enhancements. The Su-35, Russia’s most advanced variant of the Su-27, will allow the Chinese air force to gauge its success in developing the J-11, become familiar with Russian solutions to technical problems, and plot a course for further action. 

Though the sale is relatively small, it may have a considerable impact on regional security: even a single regiment of Su-35s may be enough to affect the balance of power in Taiwan. Irbis radar systems can detect jumbo jet sized airborne targets at a range of up to 300 kilometres, which will allow Beijing to monitor Taiwanese airspace from Mainland China. 

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