COMPETITORS OR PARTNERS?

BENEFITS OF MILITARY-TECHNICAL COOPERATION WITH CHINA FOR RUSSIA

How does Russia treat the Peoples’ Republic of China: is it a partner or a competitor? This matter should be considered both in terms of geopolitics, and economy. Delivering arms to Beijing, we promote emergence of not only a strong neighbour, but also a competitor in the world weapons market on the Far Eastern border. These are the issues to be covered in the exclusive interview to VPK given by Deputy Director of Federal Service for military-technical cooperation Vyacheslav DZIRKALN
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DZIRKALN Vyacheslav Karlovich

Was born in Riga in 1954. In 1975, graduated from the Riga Alksnis-named Higher School of Military Aviation Engineering. Served at various posts in the Air Forces of the USSR. Since 1980 – in a test training aviation regiment of special designation of the Research Test Centre for training cosmonauts. In 1996, was seconded to the State Committee of the Russian Federation on the military-technical policy, then, to the Ministry of foreign economic relations, the Ministry of Trade of the Russian Federation. In February 2001, headed the Department of regional policy of the Committee of the Russian Federation on MTC with foreign states of the Federal Service for MTC. By Order of the President of the Russian Federation in December 2004, he was appointed as Deputy Director of the Federal Service for MTC. He was awarded with the medal «For combat services», the Friendship Award. Lieutenant General.

Vyacheslav Karlovich, you have recently come from the United Arab Emirates where you visited the Dubai exhibition of arms. What about lessons, conclusions and impressions?

– Dubai Airshow is the largest regional airspace show. The exposition presented by different firms turned out to be rather interesting. This time, contracts for purchase of civil planes attracted much attention. Two largest transactions of the year were concluded: UAE with Boeing – 18.5 billion USD (plus an option of 8 billion USD) and Qatar with the Airbus Industry Consortium – 8.5 billion USD. The Emirates, as well as Qatar, are going to re-equip the civil air fleet that, according to their opinion, is a bit obsolete, and these transactions in terms of the amount of vehicles to be bought may be treated as most high-profile at the Exhibition. Besides, they give the understanding: how and where the aircraft market moves.

Dubai Airshow 2011 was visited by five Russian organisations that displayed their products in one of the pavilions. The greatest interest was shown to expositions of Rosoboronexport and the United Airbuilding Corporation (OAK), products of Vertolyoty Rossii OAO, Engine Building Salyut Corporation and the Kompas Company, manufacturer of radio navigation devices, were also among highlights of the Exhibition. During its opening, our pavilion was visited by the Leader of the Dubai Emirate Sheikh Mohammed, who made a point that Russia had participated at the exhibition for the tenth time.

Hectic negotiations were conducted every day, not only with the Middle East countries, but also with delegations of other states. Kamov and Mile helicopters were highly appreciated by participants of the exhibition. Our warplanes also produced a keen interest.

Today, we pursue a policy of participation as unified exposition in such large scale events. When we negotiated with our partners, we addressed three areas at one go: Su, MiG planes and Yak-130 combat trainer.

Russian ADMS, primarily, Buk and Tor medium-range Air Defence Missile System, were exhibited in Dubai. We carried out consultations, though, no contracts were signed, but I am not the supporter of contracts to be concluded during the shows. First of all, they are intended for demonstration of products, demo performance, and agreements for purchase-sales of arms, military vehicles should be thoroughly prepared. And it is not necessary to sign documents during the exhibitions. Here we discuss marketing.

The conclusion is the following. I consider that the Russian exposition was rather spectacular, meeting needs of the Middle East market, and not only the market of weapons and military vehicles. For example, Salyut presented engines for warplanes, and seawater desalination, and gas pumping installations, other equipment. I will repeat: we were not limited only to military products. A set goal was reached. We once again demonstrated that Russia is among leaders in the aircraft engine building, and interest to us is still there.

How do you assess prospects of developing and manufacturing weapons together with China?

– Let's say directly: China is a rather strong power in terms of creating different models of arms, including vehicles for land forces produced in the Peoples’ Republic of China, aviation and naval equipment. You put the right question: really, we should enter a new stage in our relations. And it is the search for mutually beneficial cooperation in developing and manufacturing different types of weapons and military vehicles.

It is not a secret that simultaneously, we are competitors on different arms markets. Therefore, we have agreed with our partners about the search for areas of cooperation where we could not confront, but co-operate, first of all, on those markets that are beneficial for both of the parties. And now, there are certain themes to be carefully studied.

Though, it is still early to speak about the results, but such work is carried out, mutual understanding is reached. I think we can soon enter the markets of weapons and military vehicles with a joint product, first of all, military shipbuilding, aviation. I believe we can borrow something useful, advanced from our partners, and they from us. Chinese partners do not stop saying that Russia is one of the world leading developers and manufacturers of weapons and military vehicles, therefore, I repeat that they are ready to closely co-operate with us.

How will copyrights problem be handled in that case? After all, this theme, as we know, is rather sensitive for Russia.

– Yes, there was a period when we passed our intellectual property without any control, and did not receive for it, so to say, any dividends. But in the last decade, we actively worked not only with China, but also with the former members of the Warsaw Treaty where during the Soviet period we transferred many licences for manufacture of arms. We have already signed tens of copyrights agreements with these states. As to the Peoples’ Republic of China, such agreement was concluded in 2008. The Ministry of Justice of the Russian Federation monitors and conducts "copyrights supervision" of this agreement that provides for formation of working groups in charge of its implementation.

Yes, undoubtedly, this area is very sensitive for us. Therefore, further, we will use our best efforts to provide protection of the rights of our developers.

Is it possible to resume MTC in warplanes with China, in which, in the recent past, significant results were achieved?

– Basically, this cooperation has not stopped. In the 90s, the agreement for Su-27 fighter licensed manufacture in China was signed. Partially, it has been implemented, though, until now, there remain problems requiring permission, and compromises are being searched.

Delivery of spare parts has not interrupted, and services for aircraft upgrading and customization have been on. Therefore, I would not say that we have stopped cooperation with China in this area, and, first of all, on planes of Su-27, Su-30MK2 family, and other vehicles.

After tragic earthquake events in the Peoples’ Republics of China, the Chinese party approached us with the request for delivery of military transport planes, first of all, Il-76. We were ready to do so. But due to certain problems in their manufacture, terms of possible transfer have been extended by 2014. And the Chinese talked about 2011-2012. And still the output has been found. We have found an option for delivery of available used vehicles. The contract for the first three planes has been already concluded. Moreover, we have offered a number of other planes. So, work in this area is underway.

But will the growth of deliveries of aircraft engines to China not affect the military-technical cooperation with India as the Peoples’ Republic of China re-exports these engines to Pakistan?

– The thing is that China re-exports not only to Pakistan, but also to a number of other countries, in particular, we speak about JL-17 light-weight fighters. But, first, these planes by their tactical characteristics cannot compete to vehicles that we deliver to India, – Su-30 and Mig-29. These advanced fighters create a bulwark of the Indian Air Forces, that is why, to speak about any preferences to Pakistan under deliveries from China would be wrong.

Second, we have transferred to the Indian party the licence for manufacture of RD-33 engines. That is, now, India manufactures engines with higher capacity surpassing by their parameters those that Russia sells to China.

That is why, I do not see here any serious problems and complications. China does business according to the rules. The Chinese pursue their interest, and we do ours. Delivering engines to the Peoples’ Republic of China, we, first of all, support our aircraft industry.

What is the position of China in the list of importers of Russian arms in the portfolio of orders? What programs, besides deliveries of aircraft engines and different role helicopters, are underway with the Peoples’ Republic of China?

– The beginning of this century was notable for a certain period of cooperation with China when we were limited only to deliveries of spare parts to the combat materiel, some types of ammunition, and repair works. But in the recent two-three years, the amount of MTC has significantly grown. And now, China, I believe, is within 3 Top Russian partners in this area with priorities including aviation, cooperation in shipbuilding, and other areas.

Now, the course is taken to provide uninterrupted service of the equipment earlier delivered by us through service centres. We have already conducted consultations on setting service of Kamov helicopters (in China) and ships of the Naval Forces of the Peoples’ Republic of China.

I will underline that China is a powerful country that develops and produces many types of arms. However, to acquire the most hi-tech models of weapons and military vehicles, it still applies to the Russian Federation. The Chinese have already learnt how to produce other materiel, for example, light-weight fighters already mentioned by me.

One more not less important area of our cooperation is carrying out joint R&D for the benefit of the Chinese industry. And it is also a long-term project.

Do you feel hot breath of Chinese counterparties on your back on the Latin American, African and Asian markets?

– Naturally, any market assumes competition, whether it be civil or military products. And China is not an exception. It produces a wide range of arms, therefore, as you have said, we feel hot breath of Chinese counterparties, including in the markets traditional for us – in Africa, Latin America, and Asia. First of all, it relates to land forces equipment, including armoured vehicles and cars. And recently, the Chinese have offered light-weight fighters, transport planes, helicopters, medium range ADMS to potential buyers. They have also reached certain successes in producing these types of weapons and military vehicles.

But here it is necessary to speak not about who interferes with whom, but about what conclusions should be made. In my opinion, just such competition urges our domestic producers, induces them to search for new forms of co-operation, and be more flexible in the marketing policy. Therefore, such rivalry is only beneficial. It does not allow our enterprises to rely on the achieved results, makes them develop new types of weapons and military vehicles. It relates to the price policy too.

Do any mechanisms to counteract the Chinese practice of counterfeit copying of the Russian arms exist? For example, a non-licensed manufacture of Russian AKM in China is widely known.

– This issue has been repeatedly discussed at various levels. I consider that signing of copyrights agreement that we discussed earlier is a very important and serious victory. It is this agreement that should determine the mechanism to protect developments of Russian manufacturers, and allow us to operate more effectively and confidently in this area.

We appreciate a position of our partners, which do not deny necessity to search for optimum ways for solution of the problem, to avoid charges in copying and plagiarism. We made advances towards each other.

But some parties in Russia suggests that military-technical cooperation in new areas with the Peoples’ Republic of China should be rejected, except for implementation of already signed contracts. Would it be in our interests?

– It is necessary to consider that we are strategic partners with China. MTC is only a part of an overall cooperation of the countries, though, a very important one. I am among supporters of continued development. Moreover, there is a full understanding of both of the parties that it is necessary.

I would recommend to those hotheads demanding scrapping of MTC with China to think over and weight all pros and contras. As I do not see any prejudice of interests of the Russian military-industrial complex.

The main thing is to build the foreign policy in the right direction, be able to defend interests of domestic producers, understanding that military-technical cooperation should be beneficial both for Russia, and China. It is a two-way road.

Date of publication: 28.03.2012


 


 

 


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