In the coming years Beijing will flood the world with cheap aircraft and warships. Get ready for a brand new global arms market.
What will happen when Beijing floods the world with cheap aircraft and warships?
In August 2014, China’s state-owned Hudong-Zhonghua Shipbuilding Co. launched a new frigate, a small warship often used for submarine warfare or coastal defense, into Shanghai’s Huangpu River. As the frigate slid into the water, a casual passerby might have assumed that it was simply another ship in the Chinese Navy’s rapidly growing fleet. Yet its intended recipient was not China’s navy, but Algeria’s — the first of three that Algeria had ordered from China at a Malaysian arms expo in 2012.
China has long been one of the world’s leading suppliers of small arms, but its sale of the frigates was not an anomaly. As the independent Stockholm International Peace Research Institute reported in mid-March, China is now the world’s third-largest arms exporter, having overtaken France and Germany, and trailing behind Russia and the United States. In 2010 to 2014, not only was China’s share of global arms sales nearly double that of the previous five-year period — 5 percent as against 3 percent in 2005 to 2009 — but its exports of major weapons platforms rose by 143 percent compared to the previous half-decade.
Over the next decade, advanced weapons platforms — once the purview of Western and Russian defense industries — will flood the arms market as China, and to a lesser degree India, become global suppliers. Developing countries that once could only afford secondhand Cold War-era weapons will soon be able to acquire everything from modern fighter aircraft and warships to precision-guided munitions, all without breaking the bank. And not unlike with consumer electronics, the quality of these platforms will increase over time, even as their prices fall.
Driving this change is the growth of the defense industries in not just China but also India, where Prime Minister Narendra Modi has prioritized reforming the defense sector to minimize reliance on foreign suppliers as well as to encourage exports. Initially unable to produce advanced weaponry on their own, yet aware of the risk of relying upon foreign suppliers, these countries have aimed to gradually attain self-sufficiency in defense procurement.
As a first step, they have been acquiring a wide variation of the same type of weapons over the past few decades. For example, among fighter aircraft, China acquired at least seven different types, while India acquired six different types. Although cost-inefficient and operationally challenging, such sampling allowed China and India to test and evaluate the technologies most appropriate to their operational needs.
They then poured considerable resources into reproducing these technologies by absorbing key foreign weapons technologies while investing heavily in indigenous weapons research and development programs. The result was the ability to produce technologies that, while perhaps not cutting-edge, were considerably more advanced than what they could have produced just a few years earlier. This strategy has enabled the Indian Navy to purchase heavily from domestic manufacturers. And the PLA Air Force now operates hundreds of indigenously developed J-10 fighter aircraft and is in the midst of testing prototypes of the J-20 and J-31 stealth fighters. If they are successful, China will join the United States as the only other country in the world with such capabilities.
Chinese weapons systems are often much cheaper than those of competing exporters. And while they’re not better than Russian or U.S. alternatives, they are often good enough.Chinese weapons systems are often much cheaper than those of competing exporters. And while they’re not better than Russian or U.S. alternatives, they are often good enough. For example, in September 2013, Turkey surprised many observers by selecting the Chinese air and missile defense system over U.S., Russian, and Italian-French offerings. Although the Chinese system is less reliable than both the U.S. and Russian systems — and incompatible with other NATO systems — the price was right: At $3.4 billion, it was almost certainly priced considerably lower than its Russian and U.S. counterparts. Since 2011, China has also sold the Wing Loong, an armed drone, to several countries in Africa and the Middle East, including Nigeria, Egypt, and the United Arab Emirates. At an estimated $1 million per unit, it provides capabilities similar to that of the U.S. Predator drone at less than a quarter of the cost. As Marwan Lahoud, then the head of marketing and strategy at the European Aeronautic Defence and Space Company, told the New York Times, “China will be competing with us in many, many domains, and in the high end.”
To be sure, China and India remain two of the world’s largest arms importers, accounting for 5 and 15 percent, respectively, of the global arms trade from 2010 to 2014. Neither country’s defense industry is capable of meeting all of the needs of its military, so for the foreseeable future, they will remain dependent on Russia and the West, especially with regard to complex platforms and technologies, such as anti-submarine warfare aircraft and jet engines. But their exports are part of a worrying trend.
What are the implications of the growing availability of modern weapons platforms? They will almost certainly disrupt the global arms market by providing cost-effective solutions for countries that do not need expensive, cutting-edge weapons. This will lead to a drop in orders for U.S., Western European, and Russian arms, as even more countries purchase more affordable Chinese and Indian alternatives.
The proliferation of these largely offensive weapons will also have a destabilizing effect on many regions where rivalries run deep. As countries equip their militaries with far more capable weapons, their neighbors may feel threatened and respond in kind, resulting in a ratcheting-up of tensions. This happened during the Cold War, when massive infusions of arms by the superpowers exacerbated existing disputes in the Third World. The Soviet Union’s arms sales to Egypt and Syria, for instance, fed Arab aggression and intensified the Arab-Israeli dispute.
The era in which the U.S. military has largely had uncontested freedom of action throughout the international commons is also ending. These weapons will enable even countries with limited defense budgets to acquire “anti-access/area denial” capabilities and make it more difficult for the United States to intervene militarily without suffering significant casualties.
U.S. and European policymakers must therefore be cautious in their decisions regarding arms sales, particularly to rising powers. Such lucrative deals are undeniably attractive, especially when defense manufacturers are scrounging for orders amid fiscal austerity in Western countries. However, these sales may eventually lead not only to the rise of competing defense industries, but also to greater instability worldwide.
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