UKRAINE – CHINA: from Project-to-Project Cooperation to Strategic Partnership

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Valentyn Badrak (edt.)
Sergei Zhurets (edt.)
Dmitriy Bogdanov
Vladimir Kopchak
Olga Nabochenko
Alexei Yarovoj

Ukraine — China:
from Project-to-Project
Cooperation to
Strategic Partnership

Published by the Center for Army, Conversion
and Disarmament Studies

Kyiv - 2009

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Ukraine-China:
2 from Project-to-Project Cooperation to Strategic Partnership

Valentyn Sergei
BADRAK ZHURETS

Introduction.
Why China?
In the current situation — whereby $4.402 trillion (according to IMF data for
geopolitical scenery around Ukraine is get- 2008), China is wealthy enough to meet its
ting worse, fundamentally new challenges huge defense requirement.
and threats are brought into being, In nominal GDP terms, the PRC is
NATO’s key European players Germany now the third biggest economy in the
and France are refusing to further support world, lagging only the United State and
Ukraine, and the United States is keeping Japan. Amidst the ongoing global eco-
silence over all this — China’s potential nomic recession, the World Bank revised
role has risen significantly in the eyes of its 2009 economic growth forecast for
Ukrainian military-political establishment. China to 8.4%, up from the projection of
The PRC has silently evolved into a pow- 7.2% made in June. China’s economy grew
erful, almost independent center of influ- 6.1% in the first quarter of 2009, but recov-
ence on the planet; it has entered the elite ered to 7.9% in the second quarter and 8.9%
club of permanent members of the UN Se- in the third, according to the PRC National
curity Council, and boasts of having the Bureau of Statistics.
world’s biggest military force of 2.25 mil- At the present stage of civilization’s
lion. China’s defense expenditure in- development, amidst complex globaliza-
creased 14.9% in 2009 to reach well past $84 tion processes, the PRC is set to take upon
billion – the world’s second largest defense itself an alternative mission of global pro-
budget behind that of the United States. portions. China — who achieved a GDP
Having the world’s biggest foreign trade growth at a time of severe global economic
turnover of $2.5 trillion and a GDP of slowdown, and increased its foreign trade


Ukraine-China:
from Project-to-Project Cooperation to Strategic Partnership 3

turnover by 21% from last year — has of influence on the Western front. Of
much to be proud of (the PRC is reported course, this is simply a matter of specula-
to have already outpaced Japan by the rate tion. Even if it is assumed that Beijing
of economy growth). If this upward trend chooses to adopt this scenario, it would not
continues, China surpassing the United be implemented straightforwardly. Still,
States as the world’s biggest economy is such a scenario, in a certain specific situa-
simply a matter of time. It is projected by tion, might well become a reality.
the PRC leadership that the amount of Chi- Assumption that China’s ambitions
nese exports would have increased to $5 will certainly grow further could be vali-
trillion by 2020, with the proportion of dated by one evident aspect of U.S. foreign
high-tech products rising to about 50% of policies. A broad consensus appears hav-
the projected sum. In addition to this, the ing been reached among the expert com-
PRC has huge strategic ambitions for tech- munity to the effect that a policy of
nology and geopolitics, its technological containment of China is one of the funda-
ambitions having grown to the extent that mentals of the United States’ foreign pol-
they became the subject of concern by the icy, not simply part of it. Success or
United States and Russia. If, a few years unsuccess of this American policy will de-
ago, Moscow did not hesitate to sell Beijing termine the entire future architecture of the
an amount of naval versions of the S-300 international relations system. RAND Cor-
SAM system, today it faces uncertainty poration, an influential non-profit research
about the feasibility of supplying the PRC organization in the United States, contends
with Su-33 carrier-based fighters. Chinese that the PRC is the only country in the
weapons designers have developed a no- world to be potentially capable to rival the
torious reputation for successfully repro- U.S. in the amount and quality of available
ducing even most sophisticated designs military resources and to present a virtually
without gaining copyright permission. across-the-board high-tech challenge.
China’s approach to dealing with RAND experts believe that within a decade
problematic geopolitical issues appears to China would be able to supplant America as
be interesting enough. Suffice it to have a the dominant military power in East Asia.
look at PRC’s policies towards Pakistan. In In the meanwhile, a few recent years
relations with Islamabad, Beijing appar- have seen pretty perceptible changes in
ently took the ‘enemy of my enemy is my attitudes by some European countries to
friend’ approach. By persistently reinforc- cooperation with the PRC, which might
ing Pakistan, China weakens India and reserve as an extra argument in favor of
duces freedom of maneuver for New proposed Ukrainian-Chinese rapproche-
Delhi. These ambitions by Beijing are what ment. Some European countries (even
Kiev is looking at with much interest. On though the limitations on defense sup-
the one hand, Ukraine still retains much to plies to China from the EU continue to be
offer China with respect to technology. The effective) began systematic effort to ex-
other side of that coin is that the possibility pand their respective arms export quotas
is not fully ruled out that China’s territo- for the PRC, this being practiced not only
rial ambitions and general geopolitical ex- by Paris but London and Berlin as well.
pectations with regard to the Far East These quotas are fully legal since selected
might spur Beijing to begin actively rein- weapons types are not covered by the
forcing Ukraine as an anti-Russian center Chinese arms embargo.


Ukraine-China:

Such a situation developing around Given that the signatory states to the
China with its consistent and independent 1994 Budapest Memorandum (who as-
policies, and, also, the rising challenges to sumed commitments as to Ukraine’s sov-
Ukraine in whom China has a long-term ereignty and security assurances) tend to
interest, all speak of the feasibility and ra- take less and less account of Ukraine’s in-
tionale of proposed effort to ensure terests, this fact can and must become a
Ukraine’s rapprochement with China in major reference point in Kiev’s talks with
politics, technology and economy. Ukraine the United States. Moreover, Ukraine,
currently needs assurances of a different under the umbrella of the Chinese might,
type and a different format. If neither Rus- could try and alter it location on the
sia nor the USA intend to assume that role, geostrategic map of the region (particularly
it is essential that Kiev identify "a third through defense and dual-use technology
party" who would be interested in a sus- transfers) and, simultaneously, build up an
tainably developing Ukraine. Paradoxical indigenous missile shield powerful enough
as it may seem, it is China who might po- to deter potential aggressor of any kind. As
tentially act as a guarantor of this kind. For for China, who has in recent years begun
China itself, in the presence of potential massive export of weapons and defense
tensions in relations with the EU in case it equipment, not only does it visualize
is pressurized by the United States, a Ukraine as a technology donor, but, also,
strong Ukraine integrated into Europe as a potential large market for its defense
might be of interest, indeed. There is an industry products, given that the PRC has
opinion that China’s interest in Ukraine is already surpassed Ukraine in the develop-
exclusively technological, but this is only ment and production of a whole range of
true to a limited extent. Of course, Ukraine defense technologies.
as a technology donor still retains much to It goes without saying that a concept
offer China, most specifically in rocket and of a Ukrainian-Chinese rapprochement
aerospace technology. Despite China’s needs to be thoroughly elaborated and ne-
multi-year history of cooperation with the gotiated in detail with the Chinese party.
Russian Federation, a significant aspect in Still, for Kiev, this idea looks far more
potential cooperation between Ukraine preferable than apprehending an escala-
and China in critical technology sectors tion of tensions in relations with the states
might be that Ukraine and Russia would poised to ignore national interests of
offer China technologies that are not com- Ukraine or disrespect their own security
peting but, rather, complementing each assurances once provided to Ukraine in ex-
other. It might be said with a high degree change for its nuclear-free status.
of certainty that China’s interest in Ukraine In Chinese, the word ‘crisis’ is written
is partly explained by the fact that Kiev in two characters meaning ‘danger/haz-
never attaches any political strings or re- ards’ and ‘opportunity/chance/’. This
quirements to joint projects in sensitive sec- combination could well and fully convey
tors. Intuitively, Kiev’s forging close the content of military-political and mili-
partnership relations wit Beijing in the mis- tary-technological friendship between Kiev
sile technology area, i.e. missile warhead and Beijing for the sake of forging a new
technology improvement, might cause prob- relevant strategy.
lems in its relationships with Washington.

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Ukraine-China:

First chapter
In search of comprehensive
assurances

T
he period of 2008-09 proved to years from now. It could be predicted with
be a difficult trial for Ukraine’s a very high degree of certainty that
statehood. A systemic eco- Ukraine will not join NATO in the next 10
nomic crisis, coupled with a years. If key NATO players in Western Eu-
crisis of security system, has rope, most notably Germany and France,
become a stimulus for changing a geopo- continue with their current policies to-
litical situation on the European continent. wards Ukraine (i.e. refuse to support
A research conducted by the Center for Ukraine’s NATO membership bid), it risks
Army, Conversion and Disarmament Stud- being left outside the Western Club and the
ies (CACDS) revealed a number of adverse European Values System.
tendencies that might threaten Ukraine. Second, the level of threats has
For one thing, Ukraine has lost its changed to the extent that experts began
value in the eyes of the NATO members talking about emerging risks to the Ukrain-
who see in it a buffer strip between the Al- ian statehood itself. Ukraine, weakened
liance and Russia. Key European NATO from within, has long seemed to be a ‘sit-
players Germany and France have effec- ting duck’ for some countries. Tough-
tively refused to back Ukraine's Euro-At- worded statements by the leaders of
lantic bids, and there are grounds to claim Romania, Russia’s voiced territorial claims
yet no such support for Ukraine on the part to some Ukrainian regions and open inter-
of the United States. It’s not a stretch to say vention with Ukraine’s domestic affairs
that European players of the North At- and, finally, surprise and unprecedented
lantic Alliance have openly retreated in refusal by Moscow to acknowledge the ex-
their fight for Ukraine, opting instead for istence of the Ukrainian nation are all di-
maintaining smooth and even relation- rect consequences of a comprehensive
ships with Russia. All-knowing media weakening and undermining of the
sources have been talking everywhere Ukrainian State. The first losses of the
about ‘Munich conspiracy-2’ plot. Rhetoric weakened state were quick to come -- the
by the new American administration and de facto loss of Zmeiny Island and the
the character of the current dialogue be- shaping of the image of the Ukrainian as an
tween the United States and the Russian enemy to the Russian. Neighbors of
Federation are all warning that Ukraine Ukraine have an interest in weakening its
might be ousted to the periphery of Euro- political influence and defense capability.
pean developments. In this new situation, Furthermore, the security assurances pro-
Ukraine’s effort aimed at gaining for itself vided by Russia and the United States in
a place among the European ‘club’ of na- 1994 in connection with Ukraine's acces-
tions is not expected to pay off until many sion to the Treaty on the Non-Proliferation


Ukraine-China:

of Nuclear Weapons are ineffective now approach 2017 when the Russian Black Sea
and will continue so in the future if the sce- Fleet is to be withdrawn from Ukraine.
nario is unfavorable to Ukraine. This as- Third, the Ukrainian Armed Forces’
sumption might be clearly validated by the development level has fallen to the lowest
"Tuzla" conflict [Russian attempt to join the point ever since independence. The
Tuzla spit in the Sea of Azov to the Russian Ukrainian military is in the state of rapid
mainland], the so called ‘gas wars’ with deterioration, with military morale declin-
Russia and the threatening Russian rheto- ing and carrier officers, not excepting those
ric itself, as well as the Russian-Georgian in the General’s rank, voluntarily retiring
war conflict over South Ossetia. The 1994 by the legions. The military employs
Budapest Memorandum on Security As- weapons arsenals and defense equipment
surances in connection with Ukraine's ac- inventories that are almost one generation
cession to the Treaty on the lagging behind those of the leading armed
Non-Proliferation of Nuclear Weapons forces of the world in terms of state-of-the-
provided security assurances for Ukraine art. Commentators are warning that
in exchange for it laying down its nuclear Ukraine’s warfighting capacity is clearly
arsenal and committing not to use or pos- not adequate to the current level of military
sess strategic weapons carriers. Ukraine threats facing it. The CACS is placing on
eventually handed over its arsenal of 1,734 record that defense capacity of the State
nuclear warheads to Russia as demanded has been brought to total collapse. In all the
by signatory states to the Budapest Memo- 18 years since independence, Ukraine has
randum. Obviously enough, the never end- failed to build an effective battle worthy
ing feud between political forces in army. Issues of the military and those of
Ukraine has effectively brought the coun- homeland defense have not been ad-
try to the brink of disaster where it may dressed as they should be; rather, they
cease to exist as an independent statehood. have been fully and systematically ig-
It’s not a stretch to say that, as we approach nored. Such an indifference to own armed
the end of 2009, Ukraine has reached a bi- forces and their capacity to defend the
furcation point where its further develop- country could be explained by the fact that
ment may, with an equal degree of the military in Ukraine has always been left
certainty, go down various tracks -- unidi- outside the scope of the system of issues
rectional or opposing one another alike. over which political opponents can pres-
Many experts are unanimous in their opin- surize each other. This system is unique to
ion that all the prerequisites for a military Ukraine and comprises the Interior Min-
intervention into internal affairs of Ukraine istry, the Prosecutor General’s Office, the
are in place now. Beginning in 2003, there court system, the Security Service (SBU)
has been a rapid growth in the level of and more organizations. The powers that
purely military and military-political be in Ukraine cannot see why they should
threats whereby the Ukrainian soil may be concerned about the military if it does
turn into a theater of military action. This not bring them any dividends. A manifes-
threat is becoming particularly imminent tation of such an attitude is that the Inte-
as loud voices are being heard demanding rior Ministry’s budget for 2009, for the first
that the issue of Ukraine’s nonaligned sta- time in a few recent years, has surpassed
tus be brought back on the agenda. The de- that of the Ministry of Defense
gree of this threat will steadily grow as we (UAH8.365bn as against UAH7.4bn).


Ukraine-China:

Worse still, Ukraine’s Military Establish- this trend being observed during the fifth
ment has lost much of its development in- consecutive year now. Some experts point
ertia; even three to four years of massive to an increasing tendency of some coun-
investment would not bring it up to the tries to be inclined to use military force for
best developed armed forces in the region resolving tasks such as changing world
in terms of combat effectiveness. In other order or redrawing the geostrategic map of
words, it is highly unlikely that Ukraine the world.
will be able to rely solely on its armed With this background in hand 18
forces any time soon when it comes to de- years past independence, Ukraine would
fending its sovereignty and inviolability of be urgently advised to begin an active
borders. search of alternative ways to ensure na-
Fourth, vigorous activities by neigh- tional growth and secure vital interests of
boring Russia at the diplomatic, economic, the State, not excepting those of homeland
information and social levels, coupled with defense and national security. In this par-
the absence of any coherent information ticular case, orientation to China’s military
policies by Kiev towards Crimea have power seems to be well justified.
brought high on the agenda the self-identi- China’s military accomplishments are
fication issue of a substantial portion of the really impressive. During a military parade
Ukrainian population in south and south- celebrating China’s 60th Anniversary na-
east regions. Against the backdrop of the tional day on October 1, 2009, Beijing
absence of a National Purpose, it could be demonstrated dozens of newest weapons
placed on record that a substantial part of and military hardware types that have fun-
the population are indifferent to whether damentally changed both the external look
Ukraine is independent or not. Ukraine’s and the image of the People’s Liberation
political establishment has been either in Army (PLA). Interesting enough, the Chi-
the grip of an infantile misunderstanding nese military-political leadership claim that
of the degree of the threats facing Ukraine the PLA now rivals armed forces of the
or remains to be heavily intoxicated by Western World in terms of state-of-the-art.
Russian propaganda. One way or another, This is a very serious claim that could be
Ukrainian policy makers are clearly seen as an evidence of China’s global am-
demonstrating incompetence. bitions. The PLA is the world’s biggest
The above well explains why Ukraine armed force with 2.25mn active military
has found itself in a ‘high-risk area’. The personnel plus a reserve force of 800,000,
situation is aggravated further by global followed by the United States with its
economic recession and deterioration of 1.4mn-member army. But what makes the
ecological, demographic, energy-related PLA’s key accomplishment is the level of
and ethical/moral problems of contempo- technology intensiveness that has risen
rary humankind which all brought our civ- dramatically in the past decade. The PRC
ilization into a ‘discussion stalemate’ and has consistently increased its defense
are stimulating aggressive behavior. Ex- spending during many years now; in 2004,
perts and analysts place on record that for example, China’s officially declared de-
about 70 percent of all the countries across fense spending jumped to about $25 billion
the globe have been increasing their de- from $22.37 billion in the previous years.
fense budgets and spending on associated Some analysts, however, think that the in-
re-equipment/re-weaponing programs, crease rate was 11.6 percent. Roughly the


Ukraine-China:

same growth rate has been observed in all its military, especially in the context of its
the following years up to 2010. Some ex- space warfare capability enhancement.
perts, though, believe that total spending Media reports had it that control of the
might be as high as $40-45 billion annually satellite was initially carried out by PLA
because the official budget doesn't include Navy’s satellite communication ships and
funding for weapons programs that are one of its nuclear-powered submarines.
normally set on a single line in the budget The results of the test had never been pub-
plan. The amount of China’s military ex- licly announced, but, if it was a success, the
penditure has always been a subject of se- Pentagon analysts say this could mean that
rious concern for the Pentagon. In a 2007 the Chinese military will not have a long
report, the Pentagon suggested that way to go to achieve a substantial progress
China’s actual defense spending might in improving its ASAT capability.
amount up to $139 billion, a significant in- Another area of priority attention for
crease over the publicly announced figure. the PLA leaders is the development of its
In March 2009, Beijing was planning to in- disruptive warfare capability. Disruptive
crease its defense spending by 14.9%, up to warfare is a form of non-traditional, asym-
$480.686 billion. In this context, a 2009 metric warfare that aims to undermine an
statement by China’s leadership that its opponent’s strengths by exploiting weak-
military arsenal is technologically roughly nesses. The Pentagon believes that China’s
on a level with the world’s most advanced logical strategy is to favor asymmetric ca-
armed forces looks highly symbolic. In an pabilities that target and exploit the weak-
interview whose text is available on the nesses of China’s militarily superior
Chinese Ministry of Defense website, De- opponents, especially the United States, in-
fense Minister Liang Guanglie said that the creasing the potential that China can defeat
PRC has achieved a great milestone in its them. Information warfare operations, es-
military modernization endeavor. pecially cyber attack operations are attrac-
Ukrainian experts must not lose sight tive to the Chinese military as an
of an issue such as the Pentagon’s concerns asymmetric weapon in that it is much more
over China’s anti-satellite and space war- effective than traditional weapons. PLA
fare capabilities. U.S. analysts believe that, analysts believe that the Pentagon has an
over the next few years, the PLA would excessive dependence on civilian computer
have enough technological capabilities in networks and its NIPRNET unsecured net-
hand to temporarily incapacitate or destroy work. It is believed that by attacking these
American satellites in any potential Sino- networks the PLA would be able to disrupt
U.S. military conflict. This concern, based US force deployments in Asia in a poten-
on a thorough examination of the results of tial U.S.-Sino conflict over Taiwan. PLA
China’s January 2007 anti-satellite (ASAT) commentators point out that by temporar-
test, was voiced, especially, by Chairman ily incapacitating or destroying these com-
of the Joint Chiefs of Staff Admiral Michael puter networks the PLA would disrupt
Mullen. The Pentagon’s concerns are re- Taiwan’s capability to respond to a possi-
lated to the launch of China's first lunar or- ble act of aggression by China and, also,
biting satellite, Chang'e 1 in October 2007. would reduce the U.S. potentialities for a
Analysts believe that this launch was of rapid intervention into a conflict should it
paramount significance not only for the arise. Media reports on that subject had it
Chinese scientific community but also for that a disruption of computer networks


Ukraine-China:

supporting communications, financial sought to collect information (most partic-
transactions and energy supply in Taiwan ularly relevant to economy and defense do-
would cause a comprehensive panic, mains), secure own information networks
thereby forcing Taiwanese authorities to and the decision-making community, and
enter into talks with Mainland China. to uphold national unity.
PLA’s printed publications consider infor- Of particular importance to Ukraine is
mation warfare operations as a pre-emp- an aspect such as the Chinese experience
tive weapon to prevent a conflict from with the development of medium- and
escalating further. Here, one of priority ob- short-range missiles. Research and devel-
jectives in information warfare capability opment on missiles in this category has
development is protecting own computer been underway in China since the early
networks from hacker attacks. The PLA 1980s. Three groups of missiles have been
has in recent years begun setting up dedi- created to date, known by their export des-
cated research organizations to experiment ignations M9, M11 and M18. Most widely
with various information warfare scenar- fielded variant is the M9/DF-15 – a single-
ios. Expert research programs in this do- stage solid-fuel missile that was exported
main are well financed and an information to Libya (140 units), Syria (80), Pakistan,
warfare research and development net- Iran and Egypt. The PLA Air Force and
work is being expanded. Interestingly, the Navy additionally possess a combined ar-
PLA does not have an official information senal of 1,500-2,500 cruise missiles. One
warfare doctrine, neither does it have the more reason why this experience is of im-
capability to implement such a doctrine portance to Ukraine is that the Ukrainian
should it be there. Air Force has an inventory of Soviet-vin-
American military experts believe tage tactical missiles. These missiles, whose
that the information warfare concept cur- designers left in Russia after the demise of
rently existing in China does not imply a the USSR, all need in-service support and
war in its traditional, Western sense. It is maintenance by Russian engineers, and
more targeted at non-military applications, Ukraine, on numerous occasions, could not
in contrast to the West where military ap- reach understanding with the Russian side
plication of information warfare technolo- on that issue. Moreover, these arsenals are
gies is more traditional. This approach to antiquated by modern standards, and
warfare offers China a possible solution to therefore need to be rejuvenated. Here, it
the disparity between the capabilities of the must be pointed out that orientation to a
PLA and U.S. forces, while not requiring single military-technological cooperation
China to build a military fully equal to that partner has already had a detrimental ef-
of the United States. The objectives of the fect on military modernization. Ukraine, in
Chinese information warfare concept are 2005, set for itself a task of developing a
projected into a far future, decades away multi-target missile system combining
from now, unlike an equivalent concept in medium-range and short-range capabili-
the United States which is aimed at accom- ties. Ukrainian designers, while having a
plishing results ‘right there, right now’. history in the field of strategic missile sys-
Many evidences have emerged now rein- tems, do not have any experience in the de-
forcing the perception that China is cur- velopment of tactical/operational missile
rently conducting a non-Western-type weapons. For this reason, relevant skills
information warfare; China has recently and technology transfers with the PRC


Ukraine-China:

would be quite justifiable and feasible. In- technologies; cooperative research pro-
tuitively enough, that issue must be ap- grams; licensed production/co-produc-
proached with great caution, as some tion; own scientific-technical initiatives;
problems may arise here, both in the con- expansion of indigenous production ca-
text of limitations stemming from the in- pacities and modernization of the existing
ternational Missile Technology Control defense-industrial base.
Regime (MTCR) and at the level of rela- A characteristic of the current PLA
tionships with the United States. By the transformation/modernization stage is the
very fact of seeking such an opportunity in realization by the country’s military-polit-
relations with the PRC, Kiev sends a mes- ical leadership of the fact that the prime
sage to international community that role in ensuring national security is as-
Ukraine deserves better attitude on behalf signed to the PLA. A number of military
of the key players of global politics who operations at the start of the XXI century
tend to take little if any account of brought to the fore the issue of a widening
Ukraine’s vital interests. In recent years, a technological gap between the armed
clear shift has become visible in the United forces of the Western World and those of
States’ foreign policy, with more priority the rest of the world. This increasingly
given to the development of anti-terrorist widening technological gap spurred the
warfare capabilities. This has lead to alle- Chinese leadership to urge the PLA to seek
viation of the U.S. foreign policy pressure achieving ‘technological leaps’ in order to
on the PRC, and, simultaneously, opened expedite the development of new capabil-
new vistas for China’s enhancing its global ities for increased maneuverability, fire-
profile. This situation could be actively ex- power and precision of fire by way of
ploited by the Ukrainian diplomacy in se- comprehensive informatization of the Chi-
lecting ways to set up a platform for more nese armed forces. Chinese analysts also
intensive, expanded Ukrainian-Sino coop- believe that the first two decades of the XXI
eration. century would be a critical period in the
It must be emphasized here in this transformation and building of new rela-
context that by modernizing its military the tionships between the defense science/re-
PRC is keen to max out scientific and tech- search community and arms industry in
nological advances, creating a backlog of China. This experience should not escape
knowledge for many years to come. Fur- the close examination of Ukraine’s mili-
thermore, the PLA leadership is seeking to tary-political establishment, most particu-
max out the effectiveness of new arms de- larly in the context of enhancement and
velopments by integrating into them reinforcement of the Ukrainian Armed
breakthrough upstream research achieve- Forces and orientation to capabilities of
ments. In such a case, achieving full inde- own Military Establishment.
pendence from foreign defense suppliers The PRC has for many years now
remains a top-priority objective of the Chi- been developing cooperation in military
nese defense industry development. The technology with the Russian Federation.
current stage in the Chinese defense in- This seems to be no impediment to Ukrain-
dustrial complex development is notable ian-Sino cooperation, which is evident by
for an integrated employment of a whole a high enough level of this cooperation
set of various measures, including acquisi- seen today. An important characteristic of
tion of advanced foreign equipment and Ukrainian-Sino cooperation in critical tech-


Ukraine-China:

nology areas is that technologies offered development of bilateral cooperation be-
China by Ukraine and Russia have differ- tween special services.
ent applications and are, therefore, com- In forging cooperation with the PRC,
plementing rather than competing with one must be mindful that China strongly
each other. This perception is reinforced by opposes changing established rules of the
a pretty high level of cooperation the PRC game or previous agreements. This atti-
has maintained with Belarus, this being tude by China could be well observed from
boosted further by highest-level contacts problems emerged in relations with
between leaders of the two states. Ukrainian aircraft engine market ‘Motor-
At the same time, Ukrainian foreign Sich’, over, as claimed by some observers,
policy with respect to China has been no- pricing policy changes. A few years prior
table for a lack of consistency. Even though to this, China cancelled its previously de-
[Ukraine’s defense import/export author- clared intention to acquire a large amount
ity] UkrSpetsExport and some major de- of Il-76 military-transport aircraft from
fense suppliers, among them Motor-Sich Russian suppliers, again, because of
[aeroengine maker] do have their respec- changes of previously agreed price tags.
tive representative offices in China, no in- Also worthy of note is China’s tough atti-
tensification of contacts has been observed tude to quality issues of imported defense
at the top national level. Ex-president products. If we regard a few recent years
Leonid Kuchma, for example, paid two of- of military-technical cooperation, here
ficial visits to the PRC (one of them in a Ukraine has at least one negative example,
two-leg tour that included a trip to Ulan which is evidence, among other things, of
Bator). The sitting president, Viktor the loss of Soviet-era production quality
Yushchenko has never included Beijing on standards. In China’s eyes, Ukraine, sad to
his foreign tour schedules, and visits by say, still remains to be, to a certain degree,
Foreign Minister Petro Poroshenko and a nonresponsive inconsistent partner. One
Defense Minister Yuri Yekhanurov would example is that a well thought-out, once
never have filled in the void in relation- proven noncash-payment scheme option
ships with the key state dominating the did not work out again because the Ukrain-
Southeast Asian region. Even so, we must ian government failed to set up a frame-
not fail to take note that contacts have de- work allowing a defense exporter to barter
veloped pretty well at the industry-to- its products for civilian goods. Not enough
industry level. Also, expert appraisal of the clarity is provided with respect to privati-
existing legal and regulatory framework zation issues, either. Here, Ukraine cannot
for Ukrainian-Sino cooperation is favorable conduct a dialogue at an adequate level,
enough. There has been active work by the while concrete questions about business-
Ukrainian-Sino intergovernmental Mili- plans or international audit checks have,
tary-Technical Cooperation Commission more times than not, been left unanswered.
co-chaired by first deputy Minister of In- Furthermore, Ukraine does not seem to
dustrial Policy of Ukraine. Earlier in 2009, have felt much urgency to push ahead with
for the first time in many years, the Chief of a transparent privatization program for its
the Ukrainian MoD’s Intelligence Direc- defense industry companies. On the other
torate paid an official visit to Beijing, which hand, China will readily support projects
was appreciated by the Chinese side as a targeted at third-country markets. Already
constructive and useful step forward in the available positive experience here gives


Ukraine-China:

reason to hope for an expansion and fur- inclined to take fast decision but, rather,
ther advancement of this area of coopera- tend to thoroughly examine and weigh in
tion. the balance all the options available before
China has always been distinguished determining an acceptable response. Many
for a well though-out, balanced foreign experts believe that China has already
policy, and it therefore cannot be imagined launched a cautious advance on Russian
that the PRC would sign any agreements interests, but Beijing is very unlikely to go
providing security assurances to anybody. for direct confrontation with Moscow. The
A thoroughly calculated, consistent foreign important positive side to Ukraine’s rap-
policy course will stimulate China to be prochement with China is that it does not
highly cautious in taking decisions. There affect or run counter to its rapprochement
is certain to be no precipitation here. Still, with Russia. If Ukraine is to have a rap-
interesting enough, China has a separate prochement with China, it has to evolve
program facilitating cooperation with ex- into a consistent partner, unswervingly ad-
Soviet states. This program provides for a hering to previously assumed obligations.
range of mutually beneficial projects that Also, further advancement of Ukrainian in-
could allow participating countries to en- terests in China calls for a high-level lob-
hance their defense and technological po- bying and an intensification of bilateral
tentialities. An important characteristic of contacts between the leaders of the two
the Chinese leadership is that they are dis- states.


Ukraine-China:

Second chapter
Place of Ukraine in the
China-Ukraine-Russia triangle

A
s the defense market has de- The PRC, who has vigorously worked to
veloped highly dynamically, bring defense production processes to a
it gets pretty difficult some- commercial level and establish, in the
times to draw a line between shortest possible timeframes, indigenous
where mutually beneficial mass series production of previously im-
cooperation ends and open competition ported weapons types and items of de-
begins. fense equipment, has now been
When analyzing in quantitative progressively transferring from the sta-
terms the level of military-technological tus of defense importer to status of pow-
cooperation between countries, it is nec- erful defense supplier. Here, a tendency
essary to understand that volumes of de- could be observed where the Chinese
fense contracts typically make no outpace original design developers in
allowance for close international indus- putting reverse engineered designs into
trial cooperation ties where subcon- production. Simultaneously, original de-
tracted companies supply subsystems sign developers who transfer their most
and assemblies, machinery, or assem- advanced technology to China would
bly/repair kits, or replacement parts. have had little time left to produce new
The topic of upgrading and repairs designs and offer them to the market.
of numerous already operational The result is that the circle of technolo-
weapons systems and items of military gies that China would be interested to
equipment deserves a bit of its own at- obtain has been increasingly narrowing.
tention. The establishment of large serv- As the situation is today, most se-
ice centers in the Customer country is vere competition has been developing
emerging as a new tendency observed along two most visible lines. First, this is
among proven first line defense suppli- competition between Ukraine and Rus-
ers. sia over the Chinese market, and second
In addition to industrial offset pro- is competition within the Ukraine-Rus-
grams, one of factors of no little signifi- sia-China triangle over third markets in
cance is that defense customers are the Asian-Pacific Region, the Middle
increasingly keen to get an access to cur- East and Africa as well as part of the
rent-generation technology and, under- Iranian market. In the latter case,
standably enough, to establish and Ukraine has not been engaged in compe-
further develop their capacities for re- tition for political reasons.
verse engineering and licensed produc- Due to the arms embargo imposed
tion. The latter trend is most apparently on the PRC by the USA and major de-
observed in cooperation with China. fense suppliers in Europe following the


Ukraine-China:

1989 Tainanmen Square massacre, Rus- their developments through from con-
sia and Ukraine still have had the ability ception to construction is conducive to
to sell out to China what has remained of growing competition on the engineering
their scientific research potentials, re- service market. One more explanation
dundant weapons arsenals and surplus might be that most of basic design-fo-
military equipment inventories. In the cused upstream research was carried out
eventuality that the arms embargo back in the 1970-80s, and as such the de-
against the PRC is lifted, as has been velopments are almost finished intellec-
openly pushed for by the EU countries, tual products that cannot be put to use
Western designers could propose China under the conditions where there are a
more advanced technologies than Russia lack of operating assets, limited amount
or Ukraine can. On the other hand, how- and value of Government defense con-
ever, it is the desire by the West to put a tracts, and inability to solicit invest-
brake on the growth of China’s techno- ments, most particularly at the time of
logical potential and military might that economic recession.
has brought about the situation as it is On the other side of that coin, there
now, as Western nations clearly visual- is a major slump in the quality of defense
ize China as a potent competitor threat- production. In addition to a lack of ex-
ening their defense industrial perience with independently doing de-
dominance. sign and development, and a critical
Almost complete dependence of degree of obsolescence and wear-and-
Ukrainian and Russian defense indus- tear of manufacturing assets due to
tries upon the export market has evolved staffing shortfalls, there has been a sharp
into a common threatening tendency for drop in the culture of engineering, as
both countries, this stemming from very well. A board of inquiry set up by the
limited capacity of their respective do- Russian Government to investigate the
mestic defense markets which cannot ab- cause of a series of test launch failures of
sorb enough orders to provide domestic the submarine-launched intercontinental
manufacturers with sustained business ballistic missile ‘Bulava’ could not iden-
or large enough Government contracts. tify the cause of the failures for a long
One of the reasons why Ukraine or time. At the initial stage of investigation,
Russia cannot offer the defense market the finger was pointed to a subcontrac-
any of their fundamentally new designs tor who allegedly supplied faulty ejec-
is very tight budgets of their military tion cartridges used in the separation of
R&D and defense procurement pro- the missile's stages. Eventually, it was
grams. Further aggravating the situa- concluded that the most recent test
tion, the break-up of sound defense launch failed because of a design and
industry cooperation ties that existed be- construction fault of the first stage steer-
tween Ukraine and Russia prior to the ing system. A fatal accident with the
demise of the USSR has brought about a Russian nuclear attack submarine
situation where it takes decades to de- “Nerpa’ which left 20 people dead in No-
velop new designs and turn develop- vember last year could also be consid-
ments into products. The lack of ability ered a consequence of an overall decline
(stemming from a range of objective eco- in technical culture and a shortfall of
nomic reasons) for the designers to see highly skilled workforce.


Ukraine-China:

In addition to this, there has been a ucated and trained at military universi-
considerable upset in the quality control ties in Ukraine and Russia. In this con-
system that previously was based on the text, it may be noted that the latter two
institution of Military Acceptance. As have openly competed on the educa-
was pointed out in a final statement of a tional service market over Chinese stu-
conference on defense industry develop- dents. The 6,500 Chinese students (plus
ment issues hosted by Russian NPO PLA trainees) constitute the single
“Mashinostroyenie” (Scientific/Produc- largest foreign student contingent in
tion Association “Mechanical Engineer- Ukraine (29.25pct of a 45,000-strong for-
ing”), only one in ten defense companies eign student contingent). By comparison,
in Russia have international ISO quality the Russian Federation has a population
management certificates thus far, while of more than 25,000 Chinese students, in-
in Ukraine, a volunteer qualification sys- cluding about 6,000 in Moscow and over
tem for defense products has yet to take 4,000 in St-Petersburg. A considerable
shape. proportion of the Chinese student popu-
Low-level procurements of quality lation have been specializing in technical
weapons systems and military equip- disciplines related to defense technology
ment types result in fewer current-gen- among other things. A slant towards
eration systems being made available for technical education is most apparently
armed forces, thereby limiting their abil- visible among the Chinese student pop-
ity to build up operational experiences ulation, which has not been observed
with such systems. According to expert among student communities of other
figures for 2009, latest generation sys- countries. The foreign student popula-
tems account for a meager six percent of tion structure in terms of specialization
the Russian Federation Armed Forces in- is usually divided among three roughly
ventory. equal domains, with one third of stu-
It is worth of note that the PRC has dents specializing in medicine, one third
ascribed great importance to military in technology and engineering, and a
specialist training, seeking to enhance combined one third in oil and gas, rural
the overall educational level of the PLA economy, culture and other disciplines.
military personnel, which still remains As Western medicine is not practiced in
pretty low. A few teams of senior-rank- the PRC where the Traditional Chinese
ing PLA officers have taken training Medicine dominates, medical students
courses at reputed universities in from China are not to be found in
Ukraine and Russia. Curiously enough, Ukraine or Russia, which explains why
the Chinese trainees were less interested the proportion of students specializing
in the training course content but more in technical disciplines is much higher
in the training process in and of itself -- among the Chinese student population
its philosophy, organization, approaches as compared to student communities
and technique – apparently revealing from other countries.
their intent to put into use the lessons Ongoing armed forces downsizing
learnt in setting up massive military per- in Ukraine and Russia is conducive to
sonnel education and training grid in closures and mergers of military univer-
China. They made no secret of PLA’s in- sities, which has a highly adverse impact
tent to have legions of its specialists ed- on the quality of military specialist edu-


Ukraine-China:

cation and training there. Simultane- In pursuing their military-technical co-
ously, there are occurrences where se- operation policies, countries have to comply
lected Ukrainian scientists and scholars with current limitations relevant to so-called
are invited to visit China to provide high ‘rogue’ states under a variety of international
paying lecture courses on a variety of sanctions. While those limitations are duly
critical subjects relating, among others, respected by most of defense suppliers,
to theory and practice of aircraft carrier China has openly acted in defiance of sanc-
building, which reveals China’s desire to tions of any kind. As traditional markets for
obtain valuable knowledge by this way. defense supplies from Ukraine and Russia
It could well be assumed that Russian had taken shape back in Soviet-era days, the
scholars as well have been engaged to two countries took to competing over the
teach courses in China, both in private once shared market space.
capacity or under lecturer exchange pro- Holding huge financial resources in
grams. hand, China confines itself to purchasing
Financial support being provided small quantities, placing an emphasis on
by China to selected renowned foreign acquiring production licenses, engineer-
defense designers, and China’s engaging ing documentation and manuals with an
them to assist in the design and devel- apparent goal of subsequently reproduc-
opment of indigenous arms and military ing the defense designs obtained. By en-
equipment designs has in its basis the as- gaging foreign developers to assist in
piration to get access to new-generation R&D projects for indigenous defense de-
technology and build up own experience signs, China pursues the objectives to get
with independently doing R&D. This ob- comprehensive knowledge of current-
viously suggests that the PRC has been generation technologies, obtain relevant
deviating from reverse engineering as experiences and acquire intellectual
key defense technology development property products without purchasing
tool and, instead, progressively redirect- end products. Yet through it all, it must
ing its effort towards the establishment be noted that it was cooperation with
of scientific schools of its own. China that enabled survival of most of
A factor of no little significance is that the defense companies that remained in
China is geographically close to the Third place in Ukraine and Russia following
World countries who previously were tra- the Soviet collapse.
ditional customers for Soviet-supplied Either way, after acquiring sufficient
weapons systems. Here, China has ex- scientific-technological potentialities to
panded its political influence on those support its further technological develop-
countries and supplied them with licensed ment, China is going to give up coopera-
produced weapons types. Western Euro- tion with defense partners in Ukraine and
pean countries and their traditional markets Russia once it becomes economically un-
on the Euro-Asian continent have been ef- feasible. Future cooperation will only take
fectively closed to defense suppliers from place with dynamically developing de-
Russia or Ukraine. Interests of defense sup- signer companies capable of independ-
pliers are usually focused on countries with ently producing innovative designs. It
high GDP or excessive financial resources, must be noted for that matter that China
whereas markets in underdeveloped coun- once proposed Ukraine establishing a
tries usually remain to be neglected. range of industrial partnerships and setting


Ukraine-China:

up a research-and-technology park in accessible to it in Ukraine or Russia. This
Ukraine, but those proposals have never would enable it to emerge as a most power-
been materialized. Even though technol- ful competitor on third markets – powerful
ogy parks, according to statistics data, ac- to the extent as to oust Ukrainian and Russ-
count for no more than 13 percent of ian defense companies from their old tradi-
innovative product output, they attract tional markets, with only few critical
pinpoint investments in promising projects technologies remaining the exclusive
due to access to low-soft lending programs province of Ukraine and Russia.
and tax exemptions. Marked manifestation Basically, cooperation and growing
of inertia being observed there arises from competition between the three countries
considerable juridical difficulties involved could be observed on markets for the fol-
in official registration of technology parks lowing:
which require legislative amendments to •Satellite launch services and
be established. Regarding defense compa- co-development of satellite navigation
nies in Ukraine and Russia, cooperation systems;
with China almost always takes place in •Aeronautical technologies;
cases involving most easily producible de- •Land warfare equipment;
fense designs created 20 to 25 years ago. In •Naval ships and related
such a case, the shortest possible time limit weapons and systems;
required for China to reproduce a selected •Air defense systems.
design has been reduced to two years. In In addition, separate consideration
the opinion of a number of Ukrainian de- should be given to:
fense industry sources (general designers •Rocket and missile technolo-
at premier defense companies), the end of gies;
the active phase of cooperation with China •Control and communication
might be expected in five to seven years systems, electronic intercept radio intel-
from now, enough for the PRC to launch ligence systems, electronic warfare
indigenous production of reverse engi- equipment;
neered designs and oust Ukrainian and •Joint R&D activities;
Russian defense companies from their tra- •Educational services (military
ditional markets. Truth be told, this does specialist training)
not apply (at least at this point in time) to
the AFV and aircraft engine domains.
On the other hand, the PRC, by most
Problems involved in
conservative estimate, procured from $1.8 safeguarding intellectual
to 2.0 billion worth of weapons and de- property rights
fense equipment in each of the recent 15 Some interesting relationships, both
years when it achieved a considerable mil- in legal and moral terms, have arisen be-
itary-technological quality leap. After- tween individual companies in Ukraine,
wards, the amount of foreign defense Russia and China as well as at the trina-
procurements was willfully reduced to the tional level over intellectual-property
minimum. rights to technologies involved in some or
By expert estimates, China will, in the other military design.
foreseeable future, be able to establish pro- At the panel session on “Problems in-
duction of most of the defense technologies volved in safeguarding intellectual prop-


Ukraine-China:

erty rights relating to defense-industrial co- Ukrainian Minister of Industrial Policy,
operation between the Russian Federation V.Novicki. Even though Ukraine and Rus-
and foreign states” that took place in Janu- sia had previously jointly carried out a sim-
ary 2008 as part of the Infoforum-10 on ilar contract to supply four same-class
“Safeguarding intellectual property rights ‘Zubr’ air cushion landing vehicles to the
and the exploitation of the results of intel- Hellenic Navy, neither of the two has the
lectual property”, hosted by Moscow’s Sci- capability to build vehicles of this type sin-
entific Research Institute of Intellectual gle-handedly. Ukraine’s workshare in
Property, it was pointed out in a report building vehicles of this type is estimated
presented by E.A.Livadny that the China by analysts at no less than 40 percent, plus
North Industries Corporation (NORINCO) a major part of warranty and post-war-
was manufacturing without proper license ranty servicing provided by Research and
some individual small arms weapons types Manufacturing Gas Turbine Corporation
derived from the Kalashnikov AK-47 as- Zoria-Mashproekt. Competition over the
sault rifle: Type 97, Type CQ, Type 56 Hellenic Navy’s contract was fierce; it even
(copy of the AK-47), Type 68, Type 81, continued when work on the contract was
Type WQ 314 and Type WQ 314A. The already in progress, which resulted in a re-
same report said that China has established vision of the terms of the deal. The result
production of reverse engineered copies of was that the value of the $200mn contract
some of Russian-designed weapons sys- previously equally shared between the
tems, among them the AO-80K air defense Ukrainian and Russian contractors was re-
gun, the laser-guided 155mm projectile distributed in the latter’s favor by a factor
‘Krasnopol’ and the ‘Fregat M2EM’ naval of 1 to 3. The situation was eventually re-
radar, as well as the naval radar ‘Mineral- solved to satisfaction of Ukraine who was
ME’ designed by what is now the State En- awarded a compensating contract to sup-
terprise ‘Scientific-Research Institute of ply a TP-400-type ship transporter plat-
Radar Equipment ‘Kvant-Radiolocation’ form built at Sevmorzavod Shipbuilding
based in Kiev. Yard in Sevastopol. The value of the ‘Zubr’
Ukrainian designers are speaking of contract with China may amount to
numerous facts where equipment once $315mn, provided that the supply package
supplied to China had, while under war- includes the complete set of engineering
ranty, been subject to unauthorized open- documentation and manuals as demanded
ing with the aim of studying the structure by the Customer. It was reported by vari-
and construction of, and subsequently re- ous media sources that Russia was negoti-
producing its constituent subsystems. ating the transfer of production license for
However, no official complaints have ever the Zubr to China in 2007, in a package in-
been made out of fear of losing well-pay- cluding the supply of 10 to 15 such vehicles
ing customers. to be built at Russian shipyards. At various
Most illustrative in terms of copyright stages of the negotiating process, the
protection might be the two examples as amount of the supply varied from four ve-
described below. hicles (for $215mn) to six and ten vehicles,
First is about the contract from China but the negotiating parties had never ar-
to supply four Type 1232.2 ‘Zubr’ small rived to any compromised agreement. The
landing craft air cushion vehicles, whose Russian company Central Maritime Design
signing was announced in May 2009 by the and Development Bureau ‘Almaz’ based in


Ukraine-China:

St.-Petersburg has stated that the Ukrain- Exactly the converse situation in
ian party violates its intellectual property terms of safeguarding intellectual property
rights by transferring (or selling) engineer- rights is being observed with Ukraine’s top
ing documentation and manuals for the designer of naval radar systems, the Kiev-
‘Zubr’ small landing craft air cushion vehi- based Scientific Research Institute of Radar
cle to a third party without the Designer’s Equipment ‘Kvant-Radiolocation’. Its port-
authorization. UkrSpetsExport, Ukraine’s folio of highly successful Soviet-era de-
defense import/export authority, does rec- signs includes a range of 2D and 3D naval
ognize that copyright to the ‘Zubr’ design radar systems, among them the ‘Pozitiv’,
belongs to Almaz. Simultaneously, it the passive radar system ‘Mineral’, the tar-
points out that air cushion vehicles of this get designating radar system ‘Uspekh’ and
design have been built by Ukrainian ship- the ‘Mars-Passat’ (the Soviet alternative to
building yard FSK ‘Morye’ on the strength the US-designed integrated naval weapons
of bilateral agreement on intellectual prop- system AEGIS). Not only Kvant-Radiolo-
erty rights to ex-Soviet military designs, cation is designer of naval radar equip-
which allows the signatory parties to em- ment, but it also employs a manufacturing
ploy design concepts, engineering docu- plant in Kiev to series-produce own de-
mentation and manuals available to them. signs.
It requires that any kind of activities in- Kvant-Radiolocation is currently as-
volving the use of copyrighted designs or sisting its Russian counterparts in pre-pro-
safeguarding intellectual property rights duction works at a newly-built factory
should be performed in agreement be- where it was planned to be relocated at the
tween the signatory parties, but says noth- time before the USSR fell apart. Russian
ing about the intellectual property rights manufacturers of Kvant-Radiolocation’s
emerged in between the collapse of the So- designs are telling potential customers that
viet Union and the day when the agree- what they offer them are all their own de-
ment took effect a couple of years ago. signs that they sell with a minimum modi-
Therefore, the companies — fully com- fication. They don’t even bother to
prehending that in absence of contracts for re-designate the ‘adopted’ designs, except
the building of vessels of this unique design for changing the last few symbols in the
they would lose the capability to build them original designation name. In this particu-
or would cease to exist altogether -- are keen lar case, Kvant-Radiolocation has a strong
to take advantage of the last opportunity to interest in already existing cooperation ties
improve their situation through the Chinese to be maintained and developed further; it
order. It is obvious to all that exports of has opted to forget ‘past endeavors’ and
Russian- or Ukrainian-built Zubr-type ACVs concentrate its effort on new developments
would reduce to near zero once China gets rather than to compromise relationships
hold of the documents required for produc- with Russian partners.
tion of the hovercraft of this design to be Kvant-Radiolocation is currently a
launched at its own yards. As the situation at successful supplier of radar equipment to
the Ukrainian shipbuilder FSK ‘Morye’ is far China. It is now completing design and de-
worse than that at Almaz, the former would velopment of a command and control com-
agree to cooperate with China on much less puter system (C2CS, an equivalent of
beneficial terms and conditions, which in- AEGIS-class integrated command/man-
deed is what would suit the book of China. agement information system) for PLA


Ukraine-China:

Navy’s new Type-956 destroyers and, pos- Soviet-supplied weapons types, among
sibly, future aircraft carriers. In addition to them the P-15 cruise missile. But test flights
this, Kvant-Radiolocation supplies a con- of P-15 clones have all failed, as Chinese
siderable portion of radar and optoelec- engineers did not know even the first word
tronic systems for naval ships being built about rocket building. Ironically, now an-
for the PLA Navy in Russia. In so doing, tiquated concept of closed architecture (as
the Ukrainian company does not raise opposed to newer open-architecture con-
claim either to Russia or China. To make an cept) is more effective in terms of copyright
estimate of Kvant-Radiolocation’s contri- protection in that it does not allow poten-
bution, suffice it to have a look at the com- tial users to see inside or reproduce all or
position of the electronic countermeasure parts of a specific weapons design archi-
equipment package on the PLA Navy’s tecture. Even though the Ukrainian com-
Type-965E and Type-956ME destroyers pany is involved in the design and
that were supplied as wholly Russian-de- development of almost the complete set of
signed without any mention made what- sonar system types (underkeel, towed,
soever of the Ukrainian contribution. In add-on, helicopter-deployed), its products
addition to electronic warfare equipment, still remain an unknown quantity on most
the propulsion-machinery plant on the de- of potential markets. Nonetheless, Ukrain-
stroyers was designed in Ukraine’s Zapor- ian companies enjoy pre-eminence in the
izhzhia, as well. It might be noted for that global market for airborne anti-submarine
matter that the PRC has already launched radio sonobuoys, with the Russian Federa-
the effort to design and develop indige- tion and some NATO countries being
nous copies of some Russian-supplied de- among major customers. Radio sonobuoys
stroyer types, whereas Russia has yet to of the RGB series (RGB-
launch the development phase of a new de- 15/16/17/25/55/75) had been series man-
stroyer design where a premium is being ufactured at a factory in Kiev and,
apparently placed on innovative naval previously, in Nova Kakhovka. Kiev’s
weapons designs developed with revenues Radio Equipment Factory supplies ‘Os-
from the Indian Navy’s contracts. Ukraine minog’ (Octopus)-series target search and
and Russia both want to tap into the prom- track radar systems for integration with the
ising market for stealth corvettes, and in- K-28 helicopters exported by Russia to
tend to begin design and development of China (to date, seven units of the ‘Os-
future frigates of indigenous designs. In minog’ radar system have been supplied).
the marketplaces for corvettes and frigates, In this particular case, not only do Ukrain-
China has successfully promoted its earlier ian companies provide support for Russian
designs on Asian-Pacific markets. defense export contracts with the PRC, but,
In the case of hydroacoustic equip- to a certain degree, maintain a stranglehold
ment, similar situation could be observed. on some niche markets.
Here, however, Ukrainian company Kiev’s At the time when Ukrainian and
Scientific Research Institute of Sonar Russian economies were in deep collapse
Equipment is in a worse standing, being in the first few years immediately follow-
overshadowed by its Russian counterpart ing the disintegration of the USSR, neither
and not having a large enough portfolio of of the two could afford further maintain-
torpedo systems products. China previ- ing naval vessels of that big displacement
ously was making attempts to reproduce and, simultaneously, both were in desper-


Ukraine-China:

ate need of cash. As a result, China had ob- panies believe that visits by Chinese dele-
tained a few large naval ships that once gations on some occasions are not aimed at
epitomized the heyday of the Soviet naval forging a deal but, in actual fact, are mani-
shipbuilding school of thought, at a price festations of industrial espionage aimed at
even cheaper than that of ferrous scrap of collecting information about new technol-
an equivalent weight. In such a case, Russ- ogy and directions of future developments.
ian military officials managed to transfer Of course, some manifestations of open es-
even some top-secret assembly units to pionage (which is punishable by law) do
China. The Type 11436 aircraft carrying take place, as well. On July 28, 2009, Russ-
cruiser ‘Variag’ was towed to Dalyan Ship- ian Customs officers at Zabaikalsk-
yard from the Black Sea Shipbuilding Yard Manchuria international automobile
in Mykolayiv when it was 67% ready in checkpoint detained an exiting Chinese cit-
2002. Here, the PRC, while trying to see in- izen attempting to smuggle fighter aircraft
side the obtained military equipment de- power supply equipment that was dis-
signs, has been simultaneously making guised as pressure devices hidden in the
attempts to establish indigenous military luggage boot of his vehicle. Intellectual
design schools of thought and engineer in- property protection issues are closely in-
novative construction materials without ar- terrelated with keeping commercial and
bitrarily copying the technology solutions Government secrets, most notably in cases
acquired. This point could be underscored where potentialities for future cooperation
by China’s development of indigenous tor- and the status of modern designs make the
pedo weapons system series derived from transfer of new (but not newest) technolo-
American, Italian and ex-Soviet counter- gies quite feasible. Intellectual property
parts. The Chinese have built an indige- protection issues involved with military-
nous current-generation torpedo system technological cooperation programs of the
and, on a parallel track, developed a few Russian Federation, Ukraine and the PRC
innovative construction materials, i.e. for do exist for the copyright holders who can-
the torpedo’s fore section, a design whose not develop themselves further or offer
engineers have been awarded a state prize manufacture-ready innovative design so-
by the PRC Government. lutions. No matter whether an appropriate
Ukrainian and Russian naval design- contractual basis is in place or not, any
ers have complemented each other on a kind of a weapons system or an item of
number of niche markets, which has impli- defense equipment obtained from a for-
cations for their respective intellectual eign supplier may, to some or other de-
property rights. Conflicts do arise in situa- gree, potentially provide a basic design
tions where copyright holders begin ‘tilt- around which to build an indigenous de-
ing at windmills’ when they realize that rivative. For this reason, weapons types
they have nothing new to offer the market. designed for the export market should
The nature of copyright abuses lies in not contain newest-generation designs
differences between free-market Western but, rather, those of the latest but one gen-
ideology and socialist ideology. Remaining eration. As is lamentably often the case,
fully socialist, the PRC, as did the USSR in some Ukrainian defense designers, left
its own time, has openly abused intellec- without Government support, would not
tual property laws in the hunt for new stop short of selling out their most latest,
technology. Officials at some defense com- if not last designs.


Ukraine-China:

Competition on the space Russian partners provided the software
component. Therefore, in this particular
services market case, Ukrainian and Russian companies are
Russia and the PRC both have the complementing one another.
possession of a great deal of modern-gen- CJSC ‘Cosmotras’, a joint partnership
eration ballistic missiles, while Ukraine between Ukraine, Russia and Kazakhstan,
boasts of having a very rich experience has been converting the RS-20 (NATO re-
with designing, developing and manufac- porting name SS-18 ‘Satan’) ICBM into the
turing them. However, cooperation in the ‘Dnepr’ SLV for Russia, and it employs the
ballistic missile area — because of national converted rocket for launching small satel-
security considerations and the limitations lites from the Baikonur Cosmodrome in
assumed by countries in connection with Kazakhstan and a launch site of the Russ-
their international obligations relating to ian Strategic Missile Forces’ Yasnensk Mis-
nonproliferation of missile technologies – sile Division in Orenburg Region.
is restricted to the development of new ma- On August 31, 2009, Chinese launch
terials. Simultaneously, there is a fierce vehicle CZ-3B partially failed during the
competition observed on the space launch launch due to a third stage malfunction
market where each and all members of the which resulted in Indonesian communica-
space-faring club have been engaged. A tions satellite Palapa-D1 reaching a lower
most distinguishable characteristic of the than planned orbit. This was the first inci-
space services market is reluctance by any dent involving Chinese space launch vehi-
of the market players to share critical tech- cles in 13 years since August 1996. To date,
nologies with competitors. the PRC has carried out 77 successful space
Even though the PRC has been build- launches, revealing its aspiration to seize
ing indigenous space launch vehicles and part of the space launch market.
has launched a human spaceflight itself, it In late June 2009, international consor-
is still lagging in this domain far behind tium Sea Launch that comprises Ukrainian
other countries, including Russia and participants ‘Yuzhnoye’ Design Bureau and
Ukraine. NPO ‘Yuzhmash’ (a leading provider of
Russia and Ukraine both have opted launch services to the commercial satellite
the way of converting intercontinental bal- industry) filed voluntary petitions to reor-
listic missiles into commercial space launch ganize under Chapter 11 of the United States
vehicles (SLVs). The SLV ‘Rokot’, for ex- Bankruptcy Code in the United States Bank-
ample, has been built by way of converting ruptcy Court for the District of Delaware.
the PS-18 (NATO reporting name SS-19 Usually well-informed sources believe that
‘Stiletto’) ICBM. Rokot employs the the main reason why Sea Launch has slowed
Stiletto’s boost cluster as the first and sec- down the rate of its operations recently is in-
ond stages, while the upper stage is the ability by Russian company NPO ‘Energo-
newly-developed ‘Briz-KM’. Ukrainian mash’ to supply Yuzhmash with sufficient
company OJSC ‘Khartron’ based in numbers of sustainer engines for Zenith-3SL
Kharkiv is the designer, maker and sup- rockets employed for Sea Launch opera-
plier of control systems both for the SS-19 tions. They are claiming that Energomash is
Stiletto ICBM and the Rokot SLV. Control now more focused on cooperation with
system hardware for the ‘Briz-KM’ upper Lockheed Martin, supplying it with sus-
stage was developed by Khartron, while tainer engines for its ‘Atlas’ SLVs.


Ukraine-China:

A project is now nearing completion The PRC is apparently experiencing
in Ukraine to build a prototype of a funda- difficulties in building its indigenous satel-
mentally new SLV design to be known as lite navigation and positioning system Bei-
Cyclone-4. Being designated as the dou (‘Northern Dipper’ or ‘Ursa Major’).
youngest member of the Cyclone family, Incidentally, the Russian-Chinese joint-
the Cyclone-4 will, in actual fact, have little venture partnership Ural & Hangsheng
if anything in common with its older sib- Autoelectronics Co. Ltd., anticipating al-
lings. The Cyclone-4 has been scheduled to most simultaneous arrival of China’s Bei-
be ready to carry out its maiden launch dou and Russia’s GLONASS satellite
from the Alcantara Space Center (Centro navigation systems to the market, has al-
de Lançamento de Alcântara) in Brazil in ready launched the design and develop-
late 2010 or early 2011. ment of a receiver combining Beidou and
It might be noted that, according to GLONASS reception. Ukraine enjoys ex-
expert estimates, space launch services ac- perience with developing satellite naviga-
count for only about 5% of the overall tion systems, along with the USA
value of the space services market. Here, (NAVSTAR) and Russia (GLONASS). Rus-
most of the market in value terms is ac- sia has maintained its GLONASS satellite
counted for by services for the design, de- constellation as an alternative to the United
velopment and construction of spacecraft States’ GPS satellite navigation and posi-
and relating systems. This market is domi- tioning system. However, development of
nated by the U.S., Great Britain, France and the GLONASS project’s commercial com-
the Russian Federation. As far as Ukraine is ponent has been hampered by the lack of a
concerned, it has successful experiences cost effective receiver solution. Here,
with building Earth monitoring satellites Ukrainian company Orizon-Navigation
but still does not have even a single com- based in Smila, Cherkasy Region, has
munication satellite of its own. Ukraine’s closely and actively cooperated with its
first ever communication satellite will be Russian counterparts, doing processor lay-
designed, developed and built in Canada. out generation works. But Orizon-Naviga-
Separately, it may be noted that tion, as is the case with its Russian
Ukrainian companies have provided de- partners, does not have the possession of
signer’s technical supervision and in-ser- current-generation production technology
vice support and maintenance for the for its microelectronic circuits, and there-
intercontinental ballistic missiles remain- fore cannot compete with more technolog-
ing on stand-by duty in Russia. In such a ically advanced suppliers. Cooperation by
case, Moscow is apparently reluctant to tap Ukrainian companies with European part-
Ukrainian rocket builders for own ICBM- ners in the planned ‘Galileo’ satellite navi-
focused programs, while being obviously gation and positioning system of the
incapable of developing and building mis- European Union should not be considered
sile systems on its own. Russian designers as a manifestation of direct competition
will certainly eventually succeed in creat- with Russian companies, even though Rus-
ing a current-generation ICBM design some sia does not have an interest in more navi-
time in the future, but by engaging Ukrain- gation systems to be deployed on orbit
ian partners to assist in that effort they along with its GLONASS constellation. In
would achieve this goal more sooner and in this sense, China has launched a challenge
a more efficient yet less expensive way. against space-faring nations by announc-


Ukraine-China:

ing plans to deploy an indigenous satellite only considered here as weapons plat-
navigation system, the ‘Beidou’. In its cur- forms. In the Russia-Ukraine-China trian-
rent configuration, however, the Beidou gle, the unrivaled leader in the field of
has limited application and a coverage lim- missile weapons is the Russian Federation.
ited to the territory of China itself. In re- Any of the world designers have never
sponse to this move by China, Japan has managed to develop anything comparable
declared intention to set up own satellite in operational efficiency to the missile sys-
navigation system, but there has been no tem types created in Russia back in Soviet-
reports to date of Tokyo making any prac- era days. The USSR, reciprocally, had
tical implementation measures to this end. successfully reproduced U.S.-designed
It may be noted in this context that anti-ship missiles Tomahawk and Har-
Russian spacecraft are far inferior to Amer- poon, under designator names ‘Granat’
ican counterparts in operational capabili- and Kh-35, respectively. In the anti-ship
ties and lifetime (in sum their quality), and missile domain, China only has two in-
next-generation Russian satellites are not digenous designs, the C-801 and C-802 (the
expected to equal currently operational latter featuring an air breathing engine),
U.S. satellites in performance capabilities both of which are much inferior to U.S. and
until 2014-2016. Russian equivalents in operational capa-
So, the above indicates that Ukraine bilities. At the same time, the PRC has long
and Russia are cooperating with and com- caught up with Russia in the fields such as
plementing each other on the missile and artillery and multiple-launch rocket sys-
space services markets, and, to a limited tems. Even though they may not be as ca-
degree, are competing with one another on pable as Russian or Western-designed
the space launch market where the PRC is alternatives, still their indisputable com-
emerging as a viable competitor to Ukraine petitive advantage is much lower cost than
and Russia that of rival equivalents. Given that con-
ventional artillery systems had reached the
limit of their technological development
Competition on the rocket and back at the WWII time (with only fire con-
artillery markets trol system being improved in postwar
A common competitive disadvantage years), China has, in actual fact, developed
of Ukrainian and Chinese defense indus- a last century’s generation technology. In
tries (specifically Ukraine’s naval ship- the development of future-generation ar-
building industry) is the lack of advanced tillery weapons such as electromagnetic
shipboard missile system designs. Naval guns or liquid projectile weapons, the level
ships are cheaper to build in China than in of competition is difficult to evaluate, as
Ukraine or Russia. Asian-Pacific countries the developments are kept in secret and an
would build supersize vessels within a operational prototype is not to be built in
shorter timeframe and, often, with a higher the U.S. until 2025. A quite similar situation
quality. Moreover, at the time of economic could be observed in the domain of laser
recession, they openly resort to price weapon systems where the Russian Feder-
dumping practices by reducing prices by ation is the only country to have demon-
18-20 percent to get an extra edge over strated successful developments.
their European rivals. Naval ships, combat The PRC has successfully marketed
aircraft and armored fighting vehicles are indigenously-designed highly capable

UKRAINE – CHINA: from Project-to-Project Cooperation to Strategic Partnership

UKRAINE – CHINA: from Project-to-Project Cooperation to Strategic Partnership

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