Singapore Air Show

China’s shifting import needs forcing Russians to adapt

 - February 11, 2008, 11:38 AM

The amount of foreign off-the-shelf defense products China purchases is falling, overall, but its cooperation with foreign countries–mainly Russia–shows a growing trend toward acquiring licenses and technologies for production and joint development projects. The Chinese are especially interested in new materials, composites, software and high technology for aircraft or engines. They also are developing product support infrastructure.

At face value, the continuing U.S. and European Union embargoes against sales of military hardware to China is good news for Russia’s defense industry. However, China, like India, is determined to diversify its defense partners–a decision that may create difficulties for Russian exporters that have had problems with Chinese customers over the past 12 months.

For example, tension has arisen over China’s cancellation of a contract, signed with Russian military export agency Rosoboronexport in September 2005, for 34 Ilyushin Il-76MD military transports and four Il-78MK aerial tankers with a total value of more than $1 billion. The deliveries were to start just over a year ago, in January 2007, and be completed by 2011, but China abandoned the contract because the Chkalov Aircraft Production Plant in Uzbekistan, where the Il-76 aircraft assembly line is located, failed to fulfill the order on time.

China also has scrapped a contract for Aviadvigatel D-30KP-2 engines and outfitting work for both the Il-76MD and Il-78MK. So now Rosoboronexport is exploring the possibility of convincing the Chinese to accept a new contract under which the Ilyushins would be entirely built and equipped in Russia.

Despite these issues, Russia appears to have sound prospects for remaining a major arms supplier to China over the next decade. Russian industry experts believe that to fulfill the potential, however, Russia must offer the most modern weapon systems to the Chinese People’s Liberation Army (PLA) and be prepared to hand over licenses and technologies for local production. It also must establish cooperation with western Europe on a number of programs in which the PLA is interested.

Over the past 15 years, warplanes have made up the bulk of Russian military hardware sales to China, which has imported 178 Sukhoi Su-27s and Su-30s–38 Su-27SK single-seaters, 40 Su-27UBK two-seat trainers, 76 Su-30MKK multi-role fighters and 24 Su-30MK2s. Today, China’s need for Su-27s and Su-30s is largely satisfied, and it has embarked on a strategic course of building its own J-10 and JF-17 fighters.

In the short term, China’s desire to enhance its navy’s air power capability may lead to the purchase of 24 Su-30MK2s, although as an alternative it could re-establish facilities to build its own H-6s, which could be armed with modern C-602 anti-ship missiles. It also could choose to use an indigenous aircraft as a new-generation antisubmarine warfare platform.

China’s delayed signing of the contract to supply two dozen Su-30MK2 aircraft and ship-based Su-33s may be attributed to its demand for the Russians to permit licensed production of more advanced jets such as the Su-27SKM, Su-30MKK and Su-30MK2.

Back in 1996, China paid $2.5 billion for a production license to build 200 Su-27SKs, strictly for the domestic market. The fighters are assembled at an aircraft production plant in Shenyang and fitted with Russian-made equipment, including AL-31F engines and avionics. The Shenyang plant’s annual output has now reached 15 aircraft. By late 2004, the Russians had delivered 105 aircraft component packages for assembly. Subsequently, however, the Chinese refused to commit to buying the remaining 95 packages.

Experts ascribe the decision to the fact that China is not satisfied with the ongoing license production of the aging Su-27SK, which cannot use air-to-surface guided missiles. They also suggest the Chinese may be pushing for the remaining aircraft packages to be supplied with specifications different from those defined by the original license agreement, but similar to those of the upgraded Su-27SKM. Indeed, China may insist on a new license covering Su-30MKKs or Su-30MK2s.

Given that the number of Sukhois in service with the PLA is about 270, the main work for the Russians will be keeping these jets operational, as well as extending their service life, supplying spare parts and providing upgrades and repairs. To pursue the strategy, Sukhoi plans to open a service and engineering center in China.

Since China already builds two jet trainers, sales prospects for the similar Russian Yakovlev Yak-130 and Mikoyan MiG-AT are practically nil. The sole vacancy in that segment is for a basic trainer, which, the Chinese believe, could be filled by the Yak-152.

For civil helicopters, China looks primarily to European producers. However, it is still buying large numbers of various models of the Mil Mi-17. For example, last year Russia’s Ulan-Ude Aircraft Plant supplied China with 24 Mi-171 helicopters worth around $200 million; it previously supplied Mi-8s; and the Kazan helicopter factory has supplied more than 60 Mi-17-V5s.

Now Russia is offering China the Mi-28NE attack helicopter flown by the Russian army, and Mil’s Mi-26 heavy transport, the latter for both military and civil applications.

Separately, Kamov has sold 12 ship-based antisubmarine helicopters (three Ka-27s and nine Ka-28s) for deployment from four of the Chinese navy’s 956E/EM destroyers. Talks are now in progress to supply up to 20 Ka-31s and 40 Ka-29s.

China has struggled to develop and produce modern engines for combat aircraft and has depended heavily on Russian-made equipment; for example, MMPP Salyut has supplied 300 AL-31FN engines. Subsequently, China said it needs another 150 and is looking to invest in modernized AL-31Fs worth up to $1.4 billion for its Su-27SK/Su-30MKK fighters. The AL-31F features thrust vector controls, and Salyut has developed an upgraded version of the engine based on the performance of a powerplant it prepared for Russia’s fifth-generation fighter program.

Meanwhile, China is continuing to develop the FC-1/JF-17 (Super-7) light fighter, working with partners from Russia, Pakistan and Israel. In 2000, the PLA decided to equip the FC-1/JF-17 with Klimov’s RD-93 engine, and in April 2005 it signed a $267 million contract for 100 of the turbofans. The Chinese see a requirement for a further 400 units, as they lay plans to use the engines to re-equip export versions of its Super-7s.