China spreads its tentacles with arms exports

Hong Kong, February 25 : Imagery from 1 February's Myanmar coup brought a reminder of the success that China's arms exports have had in many parts of the world. Pictures from the coup showed Chinese-built WMA301 6x6 assault guns on Myanmar streets, for instance. Indeed, China is currently the fifth-largest arms exporter in the world.
China has been gaining footholds in new markets too. Data from the Stockholm International Peace Research Institute (SIPRI) stated that from 2010-14 China sold to 40 different markets, but in the 2015-19 period, it had risen to 53 different countries. From 2005-09 till 2010-14, Chinese weapon sales snowballed an astonishing 133 per cent, though it has calmed down significantly since then.
From 2015-19, Asia and Oceania represented the majority of Chinese weapon sales (74 per cent), with another 16 per cent going to Africa and 6.7 per cent to the Middle East. Pakistan has been China's largest export market since 1991, and when the USA stopped providing military aid to Islamabad, this only increased Pakistani reliance on China as its main supplier. Thus, 73 per cent of Pakistani arms purchases came from China in the 2015-19 period.
China enjoyed 5.5 per cent share of the global arms market from 2015-19, and SIPRI data revealed that its three biggest export markets from 2015-19 were Pakistan (35 per cent of Chinese sales), Bangladesh (20 per cent) and Algeria (9.9 per cent).
Significantly, China was still the fifth-largest importer of arms in 2019, most of this being equipment acquired from Russia (76 per cent of its arms imports), principally Su-35 fighters, S-400 surface-to-air missiles (SAM) systems and fighter jet engines.
Last December, SIPRI released a report entitled "Mapping the International Presence of the World's Largest Arms Companies". It stated that arms sales by the globe's 25 largest defense companies had risen 8.5 per cent to USD361 billion in 2019. The position of the top five arms companies - all American: Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics - is not in jeopardy, but four Chinese companies appear in the top 25 globally. These are the Aviation Industry Corporation of China (AVIC, with a ranking of 6th); China Electronics Technology Group Corporation (CETC, ranked 8th); China North Industries Group Corporation (NORINCO, ranked 9th); and China South Industries Group Corporation (CSGC, ranked 24th).
From 2018 to 2019, the arms sales of these four Chinese companies rose 4.8 per cent. The SIPRI researchers acknowledged that the lack of accurate data from China is problematic and that other Chinese companies could actually be among the top 25 arms companies. One example could be the China State Shipbuilding Corporation (CSSC).
AVIC's weapon sales in 2019 amounted to USD22.47 billion, up 2.7 per cent from a year earlier. CETC's arms exports in 2019 totaled USD15.09 million, only just eclipsing NORINCO's USD14.54 billion. CETC enjoyed an 11 per cent growth year on year, whereas NORINCO slipped 0.3 per cent. As for CSGC, it achieved arms sales of USD4.61 billion in 2019, a leap of 12 per cent compared to 2018.
However, despite spreading their reach, Chinese companies are still selling only to a limited range of customers. North American, West European and Australasian markets are not interested in Chinese weapons, with a total lack of military cooperation between the blocs. Indeed, Siemon Wezeman, a senior researcher at SIPRI, said: "The Chinese and Russian arms companies in the top 15 have only a limited international presence. Sanctions against Russian firms and government-mandated limits on acquisitions by Chinese firms seem to have played a role in constraining their global presence."
AVIC is known to have foreign entities in at least six countries, including Cambodia, Finland, Pakistan, Spain, the UK, and the USA. For instance, AVIC's China Aviation Planning and Design Institute are present in both Cambodia and Pakistan. AVIC's presence in Western countries "do not appear to correspond to an attempt to develop an international presence per se as they remain fairly limited in scope," SIPRI said, although it did note there was an intention to acquire Western technologies.
China's arms industry is almost entirely state-owned. Of course, in a country with such centralised government as China, this means every weapon sale is done with Beijing's approval and to ensure it aligns with government policy. Certainly, it is common knowledge that China has little compunction about selling to non-state actors (a prime example is the United Wa State Army in Myanmar) as well as to the autocratic regimes or places where civil war is rife.
After selling so much material overseas in recent years, this will require China to perform greater amounts of maintenance and servicing abroad. This is amplified by the fact that many of China's customers are developing countries, where the transfer of technology is not feasible.
Beijing knows that arms are a strategic commodity, for they inexorably tie a client state to China. Long after an initial purchase has been made, militaries will need technical support, spare parts and more ammunition, thus ensuring that a long-term dependency is achieved. This also explains why India was so keen to donate one of its much-cherished submarines to Myanmar, for it was to prevent China from gaining a strategic foothold with a submarine fleet in the Southeast Asian nation.
With the West increasingly wary of Chinese ambition and activity, it is becoming more difficult for Chinese companies to pursue dual-use technologies too. The backlash against Huawei 5G networks is one example of this caution, especially since every Chinese company - whether it is privately owned or not - is legally obliged to share data with the Chinese government at its request.
After Russia annexed Crimea in 2014, the USA introduced its Countering America's Adversaries Through Sanctions Act (CAATSA) policy in 2017, which applies to Iran, North Korea and Russia. This permits the USA to sanction any state buying weapons from these countries, and it has had the intended stifling effect on Russian arms sales, one example being Indonesia's attempted purchase of Su-35 fighters. One wonders whether the USA will consider a similar CAATSA-style policy against China.
China is also penetrating markets with its aircraft. A total of 350 JL-8 trainer jets have been sold to Bangladesh, Bolivia, Egypt, Ghana, Myanmar, Namibia, Pakistan, Sri Lanka, Sudan, Tanzania, Venezuela, Zambia and Zimbabwe. Its more advanced JF-17 fighter has been sold to Myanmar, Nigeria and Pakistan, with deliveries to all three countries ongoing.
Land weapons also sell well in Africa, Asia and the Middle East. Small arms, light weapons, trucks, armored vehicles, artillery, surface-to-air missiles and rocket launchers are all popular.
China has also done well in warship and anti-ship missile sales too. In the past five years it has sold three frigates to Algeria; two corvettes plus two second-hand submarines and two frigates to Bangladesh; one patrol boat to the Ivory Coast; four offshore patrol vessels (OPV) to Malaysia; two patrol craft and a landing ship to Mauritania; two second-hand patrol boats to Namibia; two OPVs to Nigeria; two corvettes, six OPVs, eight submarines and four frigates to Pakistan; one second-hand frigate to Sri Lanka; and one submarine and one landing platform dock to Thailand.
One recent boom area for Chinese military sales is unmanned aerial vehicles (UAV), commonly referred to as drones. China is a purveyor of UAVs capable of firing missiles and dropping bombs, and it has sold to a host of countries.
The star Chinese armed UAV so far is the Wing Loong family from AVIC. Of the complete Wing Loong family, 100 units had been exported by the end of 2018, with Egypt, Kazakhstan, Pakistan, Saudi Arabia and the UAE all known Wing Loong I users, according to British defense publisher Shephard Media. In early January 2021, the Global Times tabloid reported that the 50th export Wing Loong II had been users.
Another popular UAV is the CH-4, with clients being Algeria, Indonesia, Iraq, Jordan, Pakistan and Saudi Arabia. However, it seems that not everyone is impressed with their CH-4s. Jordan acquired a number of CH-4Bs in 2016, but it put them on the market for resale in 2019. Jordan did not give a reason why it was divesting itself of the platform, but some believe that reliability issues were the reason. There is plentiful anecdotal evidence that Chinese weapons, although cheaper than their Western competitors, suffer badly from build quality and serviceability issues.
China has no restrictions on selling armed UAVs to regions like Africa, Central Asia and the Middle East. With the USA often reluctant to sell to questionable customers, the door is wide open for China to gain market share and strategic footholds in new markets.
Chinese UAVs are being used in conflict zones such as Yemen and Libya, and in fact, China imported USD4 billion of energy products from the latter in 2018. Indeed, Ryan Oliver, a US Army National Guard officer, wrote last year in an article for The Jamestown Foundation: "Between April 2018 and November 2019, more than 1,000 strikes from UAVs took place in Libya - with over 800 conducted on behalf of the Libyan National Army (LNA) and over 240 on behalf of the Government of National Accord (GNA)."
Defying a United Nations arms embargo, the GNA has been using the Turkish-built Bayraktar UAV, while the UAE supplied the LNA with Chinese-built Wing Loong IIs. It is unclear what nationalities are actually operating the UAVs. According to Oliver, China can "test and refine its military hardware on contemporary battlefields without direct political risk ... In contrast to the United States, which has been engaged in wars of its own for decades, the Chinese military has not had as many opportunities to gain combat experience".
He continued: "Particularly given the strategic significance that China assigns to its UAV programs, improvements gleaned through vicarious battlefield experience are invaluable." Oliver concluded: "Although China has not provided UAVs directly to the factions engaged in the conflict in Libya, the employment of Chinese systems by third parties offers the benefit of battle-testing equipment without the risk of military or diplomatic repercussions."