The Lonely Business of Arms

In the exportation of arms， China is a lonely superpower. Though it is the fifth largest exporter of arms in the world， its customers， according to the regular arms exports registration bills offered by the U.N.， were none other than Bangladesh， Burundi， Pakistan， Congo， UAE， Burma， Tanzania and Morocco.

A big deal in September 2013 placed China’s business of exporting arms under scrutiny of the world again.

The HQ-9 air defense missile developed by China Preci- sion Machinery Exports and Imports Corps （CPMEIC） won the bidding of the long-range air defense system of the Turkish government. The total value was US$3 billion. However， in November， the Turkish became unclear in this matter because of the obstruction of the U.S. and NATO.

Six months before that， Stockholm International Peach Research Institution （SIPRI） published a list， saying that China replace the UK as the fifth largest arms exporter in the world.

“The winning of the bid of HQ-9 was a good advertising campaign. China is telling the world that it has the determination to rival the western countries in the exportation of arms，”says Ramanov， senior researcher at the Far East Institute at the Russian Intelligence Academy.

However， Sam Rogman， a senior researcher at Australiabased Lowy Institute for International Policy， says that China is still a lonely superpower in the international arms market because it has quite limited number of customers.

Detecting China’s Pattern Like a Detective

Actually， before the end of Cold War， the western think tanks began to study into the exports of arms of China.

The SIPRI began to take the exportation of arms of China as a target of long-term monitoring from 1996. The organization once reviewed that the exports volume of arms of China increased by 162% from 2008 to 2012 compared with that of 2003-2005. This was a great change in the exportation of arms in the world. Before that， the Top five arms exporters in the world were European and American countries.

After the war between Iraq and Iran， the business of exporting arms of China was sluggish. But Rand researcher Richard Bichinger boldly forecasted in a research report that the arms exportation of China would take explosive growth since China and the other developing countries collaborated together to accelerate the research of arms.

The forecasts of western think tanks about arms exportation of China were confirmed to be true， but Peter Vesman from SIPRI says that western think tanks still have a lot of confusions about the arms exportation of China. The organization lists the Top 100 arms manufacturers and military service companies every year， but none of the Chinese companies have ever been recruited not because they are small， but because their data is unavailable.

“The data of Chinese military device companies is quite confidential，” Vesman says. Different from Europe， America and Russia， no Chinese arms manufacturers are going to disclose the information about the sale of arms. The SIPRI even made it clear that “the rankings do not include Chinese companies” with the reason that there is not enough data for the research into China.

Recently， with the expansion of Chinese Internet users， Sam Rogman gradually found that it is not that difficult to collect the data. “Many Chinese Internet users are fans of military staff. They usually shared the pictures and data about military technologies in the Internet.”

Rogman admitted that the non-official information might be the source of rumors and misunderstandings. “For any members of think tanks， it is very important to seek balance between Internet users， media and Chinese experts.”

The materials Vesman and his colleagues analyzed mostly came from the purchasing reports of countries which have bought the weapons from China. “Once they buy weapons from China， this will be discussed by the council or the media. And the weapons might appear in the parade or military exercise，” Vesman says. The researchers have to turn to every source to find and confirm the exportation of arms of China like detectives looking for proofs.

But the change is occurring， as Vesman found， since many Chinese arms manufacturers have their own websites. In his opinion， the Chinese companies finally realized that the proper opening of information is good for improving the sales.

Why to Buy China-made Weapons？

Being highly cost effective is a very big appeal of the national defense systems of China.

Rand Corporation published the report about the Chinese weapons， saying that the exports price of J-10 fighters is less than US$40 million. In comparison， the U.S.-made F-16 with similar functions is worth US$65 million. In addition， the price of China’s 053-class frigate is only one quarter of Ger-man’s similar frigate but could own 90% of the latter’s fighting prowess.

The price is an advantage and China is willing to provide more technological transfer， which made the Chinese arms popular for the customers.

It is reported that the exportation of HQ-9 missiles is going on based on the co-development between China and Turkey. The Diplomat magazine says that the U.S. military enterprises cannot make the technological transfer as Turkey required， because they kept thinking lowly of the “technological transfer”. A researcher from a Turkish think tank says that previously the Turkish government imported foreign technologies of weapon system， based on which the Turkish engineers made improvements and modifications to make them adapt to the sub-systems of Turkey.

The U.S. Department of Defense said in its 2013 China Military Power Report that the less political restraint is an important reason for many countries to buy Chinese weapons. Turkey once tried to buy the systems from the U.S.， but was stopped by the U.S. council. Turkey also wants to buy the Predator drone of the U.S.， which was not approved by the U.S. council.

In order to hold China at bay， the U.S. council passed the Foreign Relations Authorization Act， issuing a long-term banover the exportation of weapons and high techonologies to China. Any products that are considered to be hi-tech products cannot be exported to China.

Huang Jing， former senior fellow at Brookings Institution， said that Turkey chose China in spite of the obstructions， showing that HQ-9 can bring Turkey the safety guarantee that could match western countries. “Once Americans said that the equipment for Chinese army seemingly came from a‘grand museum’， but now， the Chinamade arms have the power to be standing in the front row of the world.” In his opinion， winning the bid can improve the fame of Chinese arms in the world， since no country could make fun of its national defense for a joke and spends US$3 billion buying an unqualified system.

Looking for New Clients

The arms Pakistan has bought from China accounts for 55% of the total exports of Chinese arms， and thus Paki- stan is the most important client for China-made arms. Paul Holtem， director of the Arms Transfer Program at SIPRI， says that the massive exportation of arms to China drove the development of Chinese military industry，

Iran， Sudan and most of North African countries have bought Chinese weapons for many years. But for these old clients， they chose China because they have no other choices. For example， most of the big arms exporters in the world refused to sell weapons to Pakistan.

In the future development， China’s arms exportation has to face the problems of limited exports destinations. “In Burma， Sudan and other small weapon markets， China did very well in selling arms. Though the price is a reason， but we cannot forget that very few countries are willing to sell weapons to these countries. This is a fact too，” says Vesman.

The 2013 Yearbook of Arms Exportation compiled by the SIPRI showed that 74% of the arms China exported between 2003 and 2012 were sold to Asian countries， 13% to Africa， 6% to South America and 7% to Middle East.

The report from the United Nations showed that China only exported arms to Bangladesh， Burundi， Pakistan， Congo， UAE， Burma， Tanzania and Morocco.

“China is a lonely superpower in terms of arms exportation，” says Rogman. “Even if it can overcome the technological barriers and produce the real world-class weapons without marring the advantages in price， it still has to face diplomatic and political hurdles.”

In Vesman’s opinion， the weapon industry of China must prove its reliability at this moment. “It must prove that it can meet the requirements of any clients， more than the allies， poor countries or politically secluded countries.”

Huang Jing says： “China must keep the healthy supply chain because the missile system needs to rely on the endless supply and supplement， as well good aftermarket services and reasonable cooperation in research and development.”

The Invisible Gaming

Compared with Russia and the U.S.， China is still a minor role in the global arms market. The latest data from SIPRI shows that the U.S. is still the largest arms dealer in the world. It accounts for 30% of the arms. Each year， the U.S.can earn around US$8 billion from selling arms， while China could only earn US$1.1 billion.

As an economic giant， China has the capacity to build the large-scale research and development bases second to the U.S. But the lack of development is just one reason. The more important thing lies outside the arms market， which is the invisible gaming among countries.

Rogman once served the Australian Departments of Defense and Foreign Affairs before joining in the Lowy International Policy Institute. Actually， there are many of people like him having worked in the government before joining in the think tanks.

“The exportation of arms is usually considered to be a political leverage to build a mutual reliance between exporters and importers. A’s supplying weapons to B says that A trusts B and vice versa，” he says.

The sales of arms and other assistance in safety can further improve the relations between China and its clients and is good for China’s importation of resources. Sudan is a good example since this country has exported a lot of oil to China.

In addition， selling weapons to Iran and Pakistan can not only improve the economic relationship with them， but also and more importantly enhance the cooperation in defense to counterbalance the western countries.

Huang Jing says that the deal about HQ-9 missile system with Turkey owns a great diplomatic significance. Since Turkey is a country geographically belonging to Asia but politically a member of NATO and a partner of Western countries. Since the situation in Middle East kept changing， Turkey is playing a more and more important role in the “Middle East affairs”. Getting close to Turkey means that China can have more friends.

“The objections from the U.S. and Russia were based on different reasons，” Huang Jing says. “Russia was depressed because of the loss in the deal， while the U.S. was more concerned with the political challenges.”