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Russia Suffers While Arming China, Part 2

Saturday, 26 January 2002 12:00 AM

Russia's official exports constitute only a fraction of the real deliveries, just as China's real defense outlays exceeded by 4.5 times – in the authors' estimate – that nation's official defense expenditures in 2001.

(Beijing announced in March 2001 that its published defense budget was jumping over 17 percent, to $17.2 billion. Many analysts, according to an article in the Far Eastern Economic Review of Jan. 24, 2002, estimate real Chinese defense spending in 2001 – including payments for foreign weapons and technology – at over $60 billion, i.e., about four times the official figure.)

A Vladivostok Daily report from Sept. 14, 2001, is especially telling. Customs agents of Russia's Maritime region reported seizing parts for a Russian Sukhoi-27 fighter jet during an attempt to smuggle them into China on Sept. 8.

The parts, a navigational unit and a generator valued together at $550,000, were found sealed in two metal boxes under farm equipment parts inside a truck in Ussuriysk, some 70 km from the Sino-Russian border.

The Customs sources said that

Just days ago, the authors published material on the Chinese semi-occupation of the Maritime region and the flows – both legal and illegal – of raw materials from this region to China's Heilongjiang province.

The same holds true for weaponry. Since spring 1999, when the Shenyang Aircraft Plant (mentioned in Part 1) began Russian-licensed assembly of SU-27SK fighters, large quantities of SU-27SK spare parts of all kinds from defense enterprises all over Russia have continuously flowed into China.

These parts are used (a) to repair and upgrade earlier-purchased SU-27 fighters and (b) to accelerate the assembly of SU-27SKs in Shenyang. The Chinese save both time and money.

The Maritime region, in effect under Chinese control or very close to it, has become a prime route for illegal arms exports, which also include:

What is reported, however, is no more than 10 percent of the total volume of arms smuggled from Russia into China – apparently this percentage is satisfactory for both parties.

The annual volume of such smuggling, through the Maritime region and other channels, is measured in hundreds of millions – perhaps even billions – of dollars. This is because hundreds of thousands of executives, scientists, engineers and machinists at Russian defense plants and research institutes, as well as Russian army officers, are struggling for survival.

The $2 billion-worth or more of arms acquired from Russia by China in 2001 doesn't include Russian shipments of equipment and technology – both via legal (though secret) and illegal channels – in the following areas:

The Chinese, with Russian equipment and technology, are actively constructing the Tianwang Nuclear Power Station in Lianyungang, in eastern Jiangsu Province. About 100 MinAtom specialists are continuously present on-site.

By 2005, when construction of this 2,000-megawatt thermal nuclear power plant is completed, MinAtom will rake in hundreds of millions of dollars.

Simultaneously, the article continues, MinAtom is stepping up construction and upgrading of a large uranium enrichment plant in Hanzhong, in northwestern Shaanxi Province. MinAtom supplied the Chinese with Russia's unique (and possibly world-leading) gas-centrifuge isotope separation technology.

The Chinese intend to buy more of this technology in Russia, and is also interested in acquiring from Russia nuclear technology of all kinds – as was stressed in China's negotiations with MinAtom.

Western firms and MinAtom are engaged in a fierce struggle for the Chinese nuclear market, and MinAtom is holding its own: New Chinese orders are on the way.

In short, in this fierce struggle for the Chinese nuclear market, both civilian and military, MinAtom is providing Beijing with all of Russia's nuclear technologies, including the most sensitive ones.

Under the present circumstances, the Kremlin is not averse to this policy. The same holds true for Russia's producers of space vehicles, cruise missiles, nuclear submarines, radio-frequency weapons, etc.

Some Western experts claim that Moscow is trying to limit Chinese access to Russian arsenals, because in 10 to 15 years these weapons could be used against Russia itself. These experts are gravely mistaken: Moscow's efforts are focused only on survival in 2002-2003.

According to available data, Russia's supply of arms and weapon-related technology to China in 2002-2003 will expand dramatically. The recently concluded (Jan. 3, 2002) agreements on the Chinese purchase of two more Sovremennyy-class destroyers (bringing the total to four) and S-300 systems for $400 million are just the tip of the iceberg.

According to a report in Japan's Sankei Shimbun newspaper, based on informed sources in Beijing, China's official defense budget this year will again increase by over 10 percent from the 2001 level (which rose 17 percent from the 2000 level). This will be officially announced in March 2002, during the annual session of the Chinese Parliament.

The authors will be very surprised if this increase is less than 15 percent, and don't forget about zero inflation or even deflation in China. China's real defense expenditures in 2002 – with all of the "black" items – will also increase by 15 percent or more.

There is little doubt that this trend will continue in 2003-2005. With its economy still growing at about an 8 percent annual rate, China will have no problem paying for Russian military technology. It is America and its close allies who will have the problems.

Dr. Thomas J. Torda has been a Chinese linguist specializing in science and technology with FBIS, and a Chinese/Russian defense technology consultant with the Office of Naval Intelligence.

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Russia's official exports constitute only a fraction of the real deliveries, just as China's real defense outlays exceeded by 4.5 times - in the authors' estimate -that nation's official defense expenditures in 2001. (Beijing announced in March 2001 that its published...
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Saturday, 26 January 2002 12:00 AM
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