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Russia vs. China: The Race to Dominate the Defense Market
In the long run, who will have the upper hand?
Robert Farley
July 13, 2015
China’s defense industry has long stood in the shadow of its Russian counterpart. Early in the Cold War, Soviet industry provided the foundations for the Chinese military-industrial complex through the licensing of technology, the transfer of assembly kits and the provision of advisors. Later, after the Sino-Soviet split, the Chinese struggled to keep pace, assembling usually inferior knock-offs of state-of-the-art Soviet equipment. After the end of the Cold War, Russian technology exports helped jump-start China’s defense industry, which had remained moribund for much of the Deng Xiaoping era.
Chinese industry can still learn much from Russia, but in many areas it has caught up with its model. The vibrancy of China’s tech sector suggests that Chinese military technology will leap ahead of Russian tech in the next decade. Historically, China’s military exports have occupied a different, lesser tier than Russian. Within the next decade, however, we should expect that Russia and China will fight hard for market share in the following five areas:
Fighter Aircraft
If Shenyang’s plans develop as expected, the J-31 will become the second fifth-generation stealth fighter to enter the international export market. Initial reports on the J-31 suggest that it will resemble the U.S. F-35 more than the Russian PAK-FA, although the J-31 does carry two engines, and probably won’t have a suite of electronics comparable to the Joint Strike Fighter.
On the low end, the JF-17 “Thunder,” a joint Sino-Pakistani project based on the MiG-21, has enjoyed some sales success over the last year. The J-31 and the JF-17 could provide China with a high-low export “punch” either for different customers, or for countries interested in diversifying their fighter fleets.
Russia, on the other hand, continues to enjoy enormous success with the Flanker family, exporting variants to numerous customers in Southeast Asia. Other exports have slowed, however, especially as quality-control issues have afflicted MiG-29 sales. And Russia doesn’t have much on the horizon beyond the PAK-FA, which continues to struggle. The high-profile conflicts over the aircraft between India and Russia should serve as a warning for any other customers interested in the aircraft.
Submarines
Over the past several months, China has dove into the diesel-electric submarine export business head first. China has successfully negotiated deals with bothThailand and Pakistan for the construction and transfer of submarines, entering the undersea market for the first time.
The primary victim of China’s success will undoubtedly be Russia, which produces very similar boats. Indeed, Russian shipbuilders have long worried that the transfer of Kilo-class submarines to China in the 1990s and 2000swould work to their long-term disadvantage, as the technology acquired by China would allow it to produce more-effective boats. It seems that this eventuality has come to pass.
To be sure, Russia’s submarine-building industry has remained more vital than most of the rest of its shipbuilding sector. Moreover, China has very limited experience with the transfer of such large, advanced naval vessels (a problem that also afflicts Japan). Consequently, Russia still has some advantages. However, these advantages will dissipate over time.
Tank
The design team of the Russian Armata family of armored vehicles has made very clear that it does not wish to see the tank exported to China. The Russians have good reason to exclude one of the world’s most important arms importers from enjoying the Armata; China’s relaxed attitude toward Russian intellectual property has caused problems with Su-27 Flanker sales, among others.
But it turns out that won’t be so much of a problem. China is working on its own family of armored vehicles (VT-4 or MBT3000), which will undoubtedly compete with Russia’s offerings. Chinese analysts argue (from a hardly unbiased perspective, of course) that their vehicles will exceed the capabilities of the Armata. If the Chinese tanks prove at all competitive with their Russian counterparts, Russia may struggle to sell as many Armatas as it would like.
On the upside for Russia, the Indians have begun making noise about canceling the Arjun main battle tank—a project that has lasted decades, sucked in enormous resources and failed to produce a useful vehicle. India will not buy Chinese tanks, and so if the Russians can make a more compelling case than various European competitors, they may be able to find a market.
China recently made headlines by acquiring a Russian S-400 surface-to-air missile system. Although the deal presumably included provisions intended to protect Russian intellectual property, concerns remain that China may reverse-engineer and reexport some sub-systems. More likely, however, Russia has simply concluded that Chinese air-defense technology has closed the gap with Russian tech to the point that preventing a final, arms-length transfer would simply be pointless.
Both China and Russia have stepped up efforts to export air-defense technology. Russia has developed concrete plans for the transfer of SAM systems to Iran and Brazil, among others. China may not, in the end, actually complete the deal it made with Turkey for the co-production of an HQ-9 air-defense system, but that it made a competitive bid shows just how far Chinese technology has come.
Russia will still likely enjoy some success with customers on China’s periphery, such as Vietnam and Malaysia, if it can prevent poaching by Western exporters. But at this point, China and Russia are competing for largely the same customers, and hawking products that look very similar in terms of capabilities.
Missiles
The ballistic-missile market is not what it once was. During the Cold War, the Soviet Union transferred short-range ballistic missiles, usually some variant of the SCUD, to a wide variety of clients around the world. In recent decades, arms-control efforts and a changed political environment have made such transfers considerably less frequent.
However, for the most part cruise-missile exports remain fair game. Both China and Russia have exported cruise missiles for decades, with systems finding their way across Southeast Asia, the Middle East and Africa. Although Chinese systems (developed from Soviet models) have often lagged behind their Russian counterparts, China has worked very hard on developing advanced cruise missiles over the last decade, mostly as part of Beijing’s own A2/AD architecture.
Again, Russia’s advantages lie mainly in strategic geography. Many potential customers reside in Southeast Asia, where fear of Chinese encroachment runs high. China has little interest in selling to countries that might eventually aim cruise missiles at PLAN ships. However, China and Russia could certainly compete for sales in Africa and Latin America.
Conclusion
Russia has had the advantage over China in military technology for a very long time now. During the Cold War, both countries used arms transfers as a means of enhancing political influence. Now, however, hard cash is what really matters. Russia desperately needs an active, vital arms-export sector in order to support an industrial base that has become moribund, and an economy that has become utterly dependent on energy. But in the long run, China holds all the cards; it will be very hard for Russian arms to compete against an increasingly dynamic Chinese defense sector in the coming decades.
Robert Farley is an assistant professor at the Patterson School of Diplomacy and International Commerce at the University of Kentucky. His work includes military doctrine, national security, and maritime affairs. He blogs at Lawyers, Guns and Money and Information Dissemination and The Diplomat. Follow him on Twitter:@drfarls.
Russia vs. China: The Race to Dominate the Defense Market | The National Interest
In the long run, who will have the upper hand?
Robert Farley
July 13, 2015
China’s defense industry has long stood in the shadow of its Russian counterpart. Early in the Cold War, Soviet industry provided the foundations for the Chinese military-industrial complex through the licensing of technology, the transfer of assembly kits and the provision of advisors. Later, after the Sino-Soviet split, the Chinese struggled to keep pace, assembling usually inferior knock-offs of state-of-the-art Soviet equipment. After the end of the Cold War, Russian technology exports helped jump-start China’s defense industry, which had remained moribund for much of the Deng Xiaoping era.
Chinese industry can still learn much from Russia, but in many areas it has caught up with its model. The vibrancy of China’s tech sector suggests that Chinese military technology will leap ahead of Russian tech in the next decade. Historically, China’s military exports have occupied a different, lesser tier than Russian. Within the next decade, however, we should expect that Russia and China will fight hard for market share in the following five areas:
Fighter Aircraft
If Shenyang’s plans develop as expected, the J-31 will become the second fifth-generation stealth fighter to enter the international export market. Initial reports on the J-31 suggest that it will resemble the U.S. F-35 more than the Russian PAK-FA, although the J-31 does carry two engines, and probably won’t have a suite of electronics comparable to the Joint Strike Fighter.
On the low end, the JF-17 “Thunder,” a joint Sino-Pakistani project based on the MiG-21, has enjoyed some sales success over the last year. The J-31 and the JF-17 could provide China with a high-low export “punch” either for different customers, or for countries interested in diversifying their fighter fleets.
Russia, on the other hand, continues to enjoy enormous success with the Flanker family, exporting variants to numerous customers in Southeast Asia. Other exports have slowed, however, especially as quality-control issues have afflicted MiG-29 sales. And Russia doesn’t have much on the horizon beyond the PAK-FA, which continues to struggle. The high-profile conflicts over the aircraft between India and Russia should serve as a warning for any other customers interested in the aircraft.
Submarines
Over the past several months, China has dove into the diesel-electric submarine export business head first. China has successfully negotiated deals with bothThailand and Pakistan for the construction and transfer of submarines, entering the undersea market for the first time.
The primary victim of China’s success will undoubtedly be Russia, which produces very similar boats. Indeed, Russian shipbuilders have long worried that the transfer of Kilo-class submarines to China in the 1990s and 2000swould work to their long-term disadvantage, as the technology acquired by China would allow it to produce more-effective boats. It seems that this eventuality has come to pass.
To be sure, Russia’s submarine-building industry has remained more vital than most of the rest of its shipbuilding sector. Moreover, China has very limited experience with the transfer of such large, advanced naval vessels (a problem that also afflicts Japan). Consequently, Russia still has some advantages. However, these advantages will dissipate over time.
Tank
The design team of the Russian Armata family of armored vehicles has made very clear that it does not wish to see the tank exported to China. The Russians have good reason to exclude one of the world’s most important arms importers from enjoying the Armata; China’s relaxed attitude toward Russian intellectual property has caused problems with Su-27 Flanker sales, among others.
But it turns out that won’t be so much of a problem. China is working on its own family of armored vehicles (VT-4 or MBT3000), which will undoubtedly compete with Russia’s offerings. Chinese analysts argue (from a hardly unbiased perspective, of course) that their vehicles will exceed the capabilities of the Armata. If the Chinese tanks prove at all competitive with their Russian counterparts, Russia may struggle to sell as many Armatas as it would like.
On the upside for Russia, the Indians have begun making noise about canceling the Arjun main battle tank—a project that has lasted decades, sucked in enormous resources and failed to produce a useful vehicle. India will not buy Chinese tanks, and so if the Russians can make a more compelling case than various European competitors, they may be able to find a market.
China recently made headlines by acquiring a Russian S-400 surface-to-air missile system. Although the deal presumably included provisions intended to protect Russian intellectual property, concerns remain that China may reverse-engineer and reexport some sub-systems. More likely, however, Russia has simply concluded that Chinese air-defense technology has closed the gap with Russian tech to the point that preventing a final, arms-length transfer would simply be pointless.
Both China and Russia have stepped up efforts to export air-defense technology. Russia has developed concrete plans for the transfer of SAM systems to Iran and Brazil, among others. China may not, in the end, actually complete the deal it made with Turkey for the co-production of an HQ-9 air-defense system, but that it made a competitive bid shows just how far Chinese technology has come.
Russia will still likely enjoy some success with customers on China’s periphery, such as Vietnam and Malaysia, if it can prevent poaching by Western exporters. But at this point, China and Russia are competing for largely the same customers, and hawking products that look very similar in terms of capabilities.
Missiles
The ballistic-missile market is not what it once was. During the Cold War, the Soviet Union transferred short-range ballistic missiles, usually some variant of the SCUD, to a wide variety of clients around the world. In recent decades, arms-control efforts and a changed political environment have made such transfers considerably less frequent.
However, for the most part cruise-missile exports remain fair game. Both China and Russia have exported cruise missiles for decades, with systems finding their way across Southeast Asia, the Middle East and Africa. Although Chinese systems (developed from Soviet models) have often lagged behind their Russian counterparts, China has worked very hard on developing advanced cruise missiles over the last decade, mostly as part of Beijing’s own A2/AD architecture.
Again, Russia’s advantages lie mainly in strategic geography. Many potential customers reside in Southeast Asia, where fear of Chinese encroachment runs high. China has little interest in selling to countries that might eventually aim cruise missiles at PLAN ships. However, China and Russia could certainly compete for sales in Africa and Latin America.
Conclusion
Russia has had the advantage over China in military technology for a very long time now. During the Cold War, both countries used arms transfers as a means of enhancing political influence. Now, however, hard cash is what really matters. Russia desperately needs an active, vital arms-export sector in order to support an industrial base that has become moribund, and an economy that has become utterly dependent on energy. But in the long run, China holds all the cards; it will be very hard for Russian arms to compete against an increasingly dynamic Chinese defense sector in the coming decades.
Robert Farley is an assistant professor at the Patterson School of Diplomacy and International Commerce at the University of Kentucky. His work includes military doctrine, national security, and maritime affairs. He blogs at Lawyers, Guns and Money and Information Dissemination and The Diplomat. Follow him on Twitter:@drfarls.
Russia vs. China: The Race to Dominate the Defense Market | The National Interest
