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The impact of "China priced" Russian technology in third party hands


Musing through the offerings at IDEX 2005, the 7th International Defence Exhibition, February 2005, at UAE's Abu Dhabi was another occasion to reflect on the rapidly increasingly capable, low cost, threat posture migrating into the hands of small to moderate states, as well as nonstate actors. Without pretending to be an expert on either, I attempt to remain conversant with both geopolitical strategy and military technology so that one informs the other in building risk assessments and their trend lines.

As opposed to, say, Farnborough and Eurosatory, IDEX is specifically designed to build the military capabilities of "emerging markets of the Middle East, Gulf and Asia," with the aim to both "arm local armed forces with the state-of-the-art weapons" and provide "those forces with the comprehensive technical know-how." It goes without saying that this technology is often worthy of developed nations and may be in fact lead the inventories of first world militaries as there is no/low legacy drag. It is instructive to look at the IDEX exhibitors (key in Russia, for example) and the attending delegations.

While much is made of the potential lapse or ebbing of US unipolarity, military superiority and force projection (a trend that I believe is currently in progress), the assessments become all the more sharp when one knows what a 'second tier' state can field against the US in a limited regional confrontation. In Desert Storm, for example, the Iraqis had the superb South African G5 self-propelled artillery that outgunned its US counterpart. The US prevailed for other reasons, but it is an example of the growing capacity of second and third tier states to acquire first tier capability -- and some of those states have recognized that they need the "comprehensive technical know-how" and battlefield management tools just as much as the weapons themselves.

The trickle down process continues to nonstate actors (witness Hezbollah's recent building and flying a UAV over Israeli territory unintercepted - with a video payload as proof of the flight) rapidly complicates US calculations on the low end guerrilla warfare and insurgency end. (See John Robbs global guerrilla warfare defined as a combination of open source innovation, low(er) tech weapons, and a jostling 'bazaar' of agent transactions and interactions).

Compound that with the emerging first-tier state status of China and India, and the threats that will flow from such large economies and their manufacturing base:

A combination of sustained high economic growth, expanding military capabilities, active promotion of high technologies, and large populations will be at the root of the expected rapid rise in economic and political power for both countries.

  • Because of the sheer size of China’s and India’s populations—projected [to] be 1.4 billion and almost 1.3 billion respectively by 2020—their standard of living need not approach Western levels for these countries to become important economic powers.
  • China [is] now the third largest producer of manufactured goods, its share having risen from four to 12 percent in the past decade. It should easily surpass Japan in a few years, not only in share of manufacturing but also of the world’s exports. Competition from "the China price" already powerfully restrains manufactures prices worldwide.
  • India currently lags behind China [but] it also will sustain high levels of economic growth.

I like to say, 'Follow the demographics,' both rising and falling, that, short of Malthusian checks, will point to unavoidable shifts and their implications. Large consumer cultures and growing manufacturing capacity pave the way for substantial military expenditures (witness the US in the 20th century). Shrinking/contracting economic bases (either in comparative or absolute terms) such as in the US and Europe will force a retraction or reduction in capacity, or at least the frequency of committing that capacity.

While much has been made of "the China Price" in the commercial industrial sector, i.e., 'Cut your price 30% to 50% or lose your customers,' the concept applies just as strongly in the military sector, perhaps more so -- and it applies beyond China to India, Brazil, Indonesia, and others. The US and Europe are facing, and will continue to face, steeply rising capability on offer at prices significantly under US/EU systems. It will be increasingly hard for second and third tier states to accept that cost delta as the capability delta narrows.

While the top five military spenders are the US, Japan, UK, France and China (with China, Russia and Brazil having made significant increases in their defense budgets), the top two military exporters are the US and Russia. It is the Russian technology that concerns me as while the USSR came apart, its military technology base remained vibrant and went into a massive export campaign in order to keep its doors open as Soviet procurement halted. Russian top-tier technology sells for hard currency at well below equivalent US technology and is flowing at remarkable rates to China and India who will reproduce it at far lower cost for their domestic inventories and for export in competition to the US and EU.

IDEX saw India announce its Indo-Russian BrahMos supersonic cruise missile ready for export. BrahMos is based on the supersonic fire-and-forget ship, submarine and coastal-launched Yakhont (Gem) capable of salvo launching and designed to attack US carrier battle groups. Russia has also sold its Mach 3 Moskit (Sunburn) air and ship launched cruise missile and its Sovremenny destroyers, carrying eight each, to China where one presumes reverse engineering is in progress. Also designed to defeat carrier battle groups, Moskit reduces response time to 25-30 seconds.

Gordon Housworth

InfoT Public  Strategic Risk Public  


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