McNair Paper 36, Explaining and Influencing Chinese Arms Transfers, February 1995

In our review of demand-side explanations of Chinese arms exports, we will dwell only on those transfers that were quantitatively significant and most likely were considered by the recipient as making an important contribution to its security. The acceptance of extremely limited, often symbolic, PRC military aid by mostly African Third World countries (see Tables 1 and 3), after all, tells us little about those states' weapons acquisition strategies. Additionally, the cases of Cambodia, the Afghan rebels, North Vietnam, and North Korea are not especially illuminating. In the first three instances, Chinese weapons were welcomed by belligerents hard pressed to adequately equip their forces; and while Pyongyang's post-Korean War acceptance of PRC military assistance was sometimes conditional upon the vicissitudes of the zero-sum influence game played between Moscow and Beijing, North Korea was ultimately a poor country willing to take what it was offered. Our discussion, then, will focus on the following major recipients of arms from the PRC: Bangladesh, Burma, Egypt, Iran, Iraq, Pakistan, Saudi Arabia, Tanzania, and Thailand.

As previously mentioned, Chinese weapons are often described as "rugged, simple to operate and maintain, and fairly reliable." (Note 69) Given their affordable prices, we could reasonably expect numerous Third World countries to outfit their militaries accordingly. Yet, as we have seen, the list of long-term serious buyers is a short one. A very rough comparison of some of the factors perhaps influencing the acquisition decisions of the countries in question is provided in Table 7.

Clearly, most of the nations electing to equip their armed forces with Chinese weapons were faced with formidable internal or external security threats at the time of their initial acquisition decisions; the exceptions were Bangladesh, Tanzania, and Thailand (although some would argue in the latter case, Hanoi posed a serious challenge to Bangkok, at least along the Thai-Cambodian border).

Additionally, the arms purchased were generally qualitatively suitable to cope with the threat at hand, although Chinese weapons were inferior to those of Pakistan's archrival India, as well as Egypt's foe at the time, Israel. The imported hardware, as well, was usually appropriate given each state's military doctrine. For example, most Middle East clients incorporated PRC arms into formations assigned defensive or economy of force missions, while employing better equipped, elite forces for offensive operations to attain maneuver objectives. Saudi Arabia, on the other hand, bought CSS-2 IRBMs as part of its strategy of deterrence. (Note 70)

Given the comparatively limited human and technical resources available of these countries (excepting Thailand), it is also fair to say Chinese arms were consistent with each recipient's operational and maintenance capabilities. While it might be argued that some of the countries under consideration have purchased and managed to field sophisticated superpower and Western European equipment, their unimpressive showings in actual conflicts and poor maintenance records would indicate PRC weapons are by no means ill-suited for their armed forces. Finally, it should be noted that Beijing's major customers have been, for the most part, pressed for foreign exchange, making the low cost of Chinese weapons an attractive selling point. Unquestionably, savings can be substantial. To illustrate, according to one source, the 1992 cost on the open market of a Russian MiG-29 fighter was around $25 million, whereas a Chinese F-7M was $2.5-$4.5 million. (Note 71) By contrast, the two nations that did maintain significant purchasing power, Iraq and Saudi Arabia, were driven to Beijing for their own special reasons. Baghdad, involved in a costly war of attrition with Teheran, was on a global shopping spree in order to keep its forces in the field (Note 72); Saudi Arabia, despite its appreciable financial assets, could only acquire intermediate-range missiles in the world market from China.

NOTE: Foreign exchange availability, threat, and threat risk pertain only to the years of major PRC arms sales to each country. Foreign exchange availability considers not only currency earnings through trade, but access to grants and loans (Egypt, Iraq, and Pakistan) and bartering power (Iran and its oil). Hyphens represent trends (e.g.- Egypt was at risk of renewed war with Israel prior to the Camp David accords; during the 1980's its security situation steadily improved.

SOURCES: Arms transfer years from Michael Brzoska and Thomas Ohlson, Arms Transfers to the Third World, 1971-1985 (Oxford: Oxford University Press, 1987), pp.138-280; and Stockholm International Peace Research Institute, SIPRI Yearbooks 1987-1992: World Armaments and Disarmament (New York: Oxford University Press, 1987-1992), from the chapters "Trade in Major Conventional Weapons." GDP per capita and literacy rates from Central Intelligence Agency, The World Factbook 1992 (Washington, D.C.: United States Government Printing Office, 1992).

However, in looking for commonalities among the PRC's important clients, it is more productive to inquire into the origins of the arms transfer relationships and the forces that either sustained of suspended them. It was previously offered that states hedge against uncertainty and conditionality in formulating an acquisition strategy, and that they value an autarkic defense production capability if at all attainable. A review of the particular security environments shaping the decisions of those nations that turned to Beijing as a source of weapons seems to bear this out.

A majority of the countries that opted to enter into a significant arms transfer relationship with the PRC appear to have been prompted by actual or anticipated reduced access to other sources (see Table 8 below). In the cases of Burma, Egypt, Iran, Iraq, and Pakistan, states were faced rather suddenly with embargoes or severe restrictions imposed by their major suppliers. (Note 73) Burma's military, isolated internationally after seizing power and establishing the State Law and Order Restoration Council (SLORC), saw no viable alternative to purchasing weapons from an obliging Beijing. The other countries, faced with serious external threats, did buy large quantities of Chinese arms, but only as part of a source diversification program. For its part, Saudi Arabia, questioning U.S. security guarantees, threatened by the proliferation of missiles in their region, and alarmed at their use in the "war of the cities," bought IRBMs from the only willing supplier available, the PRC. (Note 74) Dar es Salaam, as well, in its time of crisis, found a reliable provider in Beijing. The 1964 mutiny of the British-trained Tanzanian Army, followed by largely unsatisfactory arms deals with West Germany and Canada, impelled President Nyerere to accept much needed comprehensive Chinese military assistance. (Note 75) Thai and Bangladeshi decisions to utilize PRC weapons, on the other hand, cannot be attributed specifically to such traumatic events as arms embargoes. Nevertheless, even here, it is still plausible to argue that issues of supplier reliability were critical factors. Bangkok's belief in the United States commitment to the security of Southeast Asia was greatly shaken after Hanoi's victory in 1975. Moreover, Thailand's generals were most likely concerned by the implications of the dispute with Washington over bases in the late-1970's, as well as the precipitous decline in military aid in the mid-1980's. (Note 76) Finally, the Bangladesh military, having experienced firsthand (as part of the Pakistan Army) the blow of U.S. and U.K. arms embargoes and restrictions from 1965 until the creation of their nation in 1971, and reluctant to draw too close to New Dehli and Moscow, probably saw its best hope for a reliable supplier of weapons in Beijing. Dhaka's continuing policy of regional neutrality thus seems well-served by its heavy reliance on PRC hardware. (Note 77)

A state unsure of the long-term reliability of its arms suppliers may also seek to reduce its dependence on others by developing an indigenous production capability. Several of the PRC's major clients have, in fact, successfully negotiated for local assembly, coproduction, and various other licensing agreements. Pakistan, for instance, in 1989 signed a memorandum of understanding with China providing for "bilateral cooperation in the fields of purchase, joint research and development, joint production, transfer of technology, as well as export to third countries through mutual agreement." (Note 78) Concretely, Sino-Pakistani defense production cooperation has entailed, in part, Beijing's help in establishing a Type-59 tank rebuild factory at Taxila, and facilities to overhaul and rebuild F-6 fighters at Karma. Additionally, the Pakistanis locally produce, based upon Chinese designs, the Karakoram-8 jet trainer, Khalid MBT (a version of the Chinese Type-69 tank), HJ-8 antitank missile, and possibly the Anza-2 portable SAM (a Chinese HN-5A variant). (Note 79)

Likewise, Iran manufactures the Oghab multiple rocket launcher system which reportedly embodies technology transferred by the PRC, Egypt locally assembled some 80

NOTES: a. Pertains only to years of major arms sales. Supply position defined in value of sales. Dominant=>50%; Major=15% to 50%; Minor= <15%. b. China halted arms sales to Iraq in accordance with U.N. resolutions in '90. c. USSR became most important supplier with growing Tanzanian-Ugandan tensions after '74.

SOURCES: Arms transfer years and PRC overall supply positions from Michael Brzoska and Thomas Ohlson, Arms Transfers to the Third World, 1971-1985 (Oxford: Oxford University Press, 1987), pp.138-280; and Stockholm International Peace Research Institute, SIPRI Yearbooks 1987-1992: World Armaments and Disarmament (New York: Oxford University Press, 1987-1992), from the chapters "Trade in Major Conventional Weapons," and International Institute for Strategic Studies, The Military Balance 1992-1993 (London: Brassey's, 1992), from "Countries" section, pp.98-184. Sources for events cited in text above.

F-7 Shenyang fighters it received from China in the early-1980's, and Bangkok arranged a joint Sino-Thai venture in 1989 to produce armored personnel carriers for domestic use. (Note 80) While Chinese weapons production licenses granted worldwide are relatively few, it appears the states securing them have done so as part of a broader strategy of reducing their vulnerability in the global arms market.

Let us assume the following:

• The international security order in the next ten years is primarily maintained by the United States, although Washington increasingly finds its leadership challenged at the peripheries by economically robust states (or coalitions).
• The level of U.S. military aid and scope of bilateral and multilateral security guarantees slowly, but perceptibly diminishes.
• 3) China maintains the rapid growth rates it has achieved over the past decade.

We may now deduce three points about demand for PRC arms in the near- and mid-term:

1) Third World demand for Chinese arms may gradually increase. To the extent U.S. weapons transfer policy is perceived as being unreliableCthat is, conditional upon recipient behavior or American domestic politicsCand its commitment to defend the integrity of former "front line states" in the aftermath of the Cold war in doubt, nations will want to diversify their sources of supply. With its comprehensive, dependable, and inexpensive line of hardware, the PRC is well positioned to secure some contracts from more impoverished, isolated, and threatened clients.

2) Developing countries and states with narrowly based economies will be more inclined to purchase Chinese weaponry since the PRC, with its expanding resources, will be able to arrange favorable offset and countertrade agreements.

3) Any state convinced Beijing will come to its assistance with military force to defend its sovereignty, and willing to join with it in an implicit or explicit bilateral security relationship, will be more prepared to equip its armed forces with Chinese material. In the decade ahead, because of China's limited force projection capability, there are few prospects for this beyond several of the PRC's regional neighbors.