Sunday, March 06, 2005

China hopes EU-supplied firepower will make US think twice

The Australian: - The European Union seems almost certain to lift its arms embargo on China by mid-year, despite threats of trade retaliation from Washington, which warns that a pumped-up People's Liberation Army will threaten Taiwan and US forces in the region, who would have to defend the island from attack.

China denies it is desperate to buy advanced military weapons, and the EU denies it will sell them. Such denials prove only that there is more spin on this issue than in the rotors of the helicopters and torpedos Beijing seeks to develop with the help of France.

China's 2005 defence budget, unveiled at the National People's Congress at the weekend, will rise 12.6 per cent to just under $US30billion ($38billion). That is the military spending China admits to; the real figure is believed to be two to four times higher.

The increase continues more than a decade of double-digit growth as China seeks to modernise its military, trying to narrow a 20-year gap with First World fighting forces while preparing for any conflict over Taiwan.

China's military spending is still paltry compared with the US's annual defence budget of $US400 billion. But a new worry for the US, Taiwan, Japan, Russian – and also Australia – is how much of this year's money China will spend on advanced weaponry from Europe that might alter the strategic balance across the Taiwan Strait.

"By opening up this channel, on the one hand China can get advanced technology and weapons from the EU, and on the other hand it is possible China can import more advanced weapons from Russia," leading Chinese military academic Han Xudong told The Australian.

He said China was focused on the "information technology construction of the army". It needed more advanced systems known as C4I – "command, control, communications, computers and intelligence" – to narrow the gap with the US, which was "more advanced by several degrees than the Chinese army".

China also wants to diversify its supply sources. Russia is its biggest military supplier by far, accounting for about $US20 billion worth of arms sales to Beijing since 1991. But as Han lamented, "they won't sell up-to-date technology to us". China hopes the prospect that it will take its business to the EU might change Russia's mind.

China's military capabilities are at least 20 years behind the best and latest, and the gap is widening, most Western analysts say. This is despite much effort in the past decade to convert the world's largest military, the 2.5 million-strong PLA, into a modern fighting force by shedding manpower and investing in modern weaponry.

China almost certainly has a long and detailed shopping list ready to put to Europe post-embargo.

"In particular, China is trying to build capabilities that can deter or delay US intervention in the event of a military crisis in the Taiwan Strait," says Phillip Saunders, senior research fellow at the US National Defence University.

"China wants items such as radars, electronic countermeasures, communications systems and even surface-to-air missiles that can all be adapted to Chinese platforms (planes, ships and tanks) to substantially improve its overall combat capabilities," he says.

European firms have high-quality technologies in all these areas. Siemon Wezemen, of the Stockholm-based Peace Research Institute, says: "The Chinese are clearly looking to Europe when it comes to electronics for aircraft, electronics for ships, and engines for ships and armoured vehicles."

Several countries have taken the vaguely worded embargo to preclude only the sale of complete lethal-weapons systems. Arms export licences granted by the EU for sales to China under an existing code of conduct increased eightfold between 2001-03, from E54million ($90 million) to E416million.

But the EU and US arms embargos, and Russian circumspection, have denied China access to the world's most advanced weaponry. Most of the new tanks, artillery, surface-to-air missiles, surface-to-surface missiles, ships, submarines and air-to-air missiles that have come into service since 1980 have been incremental improvements on earlier versions.

In many cases, their lineages trace back to 1950s-era Soviet technology, says Evan Madeiros, an analyst of China's military for the US-based Rand Corporation.

And US political scientist David Shambaugh, in his book Modernizing China's Military: Progress, Problems and Prospects, writes: "China's best indigenous conventional military capabilities resemble European equipment of the early 1980s, and these constitute only a very small proportion of the total equipment."

Saunders believes China has moved on from the 1980s, when it would buy one or two examples of equipment then attempt to copy it. In a hurry to narrow the gap, it may now prefer to graft high technology developed elsewhere on to its basic hardware, despite the limitations of that strategy.

For example, a new class of guided-missile destroyers unveiled in 1999 uses Ukrainian gas turbine engines, German electrical systems, French radars, Russian sonar, Russian helicopters and Italian torpedos. But Shambaugh writes that the combination of systems and the lack of spare parts and maintenance packages for pre-1989 components has made operations and maintenance "a logistical nightmare".

France, the most vocal advocate of renewed arms sales to China, looks like being first in the queue. It is reported that almost one-third of licences for EU arms sales to China in 2003 were from France. These included E98million worth of electronics for military use, E43million worth of military aircraft and E2million worth of bombs, torpedoes and rockets.

The EU's executive arm, the European Commission, recently sought to assuage concern, saying lifting the embargo was not intended to increase the quantity nor the quality of arms exports to China, nor to upset the military equilibrium in Southeast Asia. It also said a tough new code of conduct would make it less, rather than more, likely that European countries would sell weapons and sensitive military technology to China.

Some analysts agree the volume of European arms exports to China is unlikely to change much, at least in the near term. Wezeman says the US threat to suspend co-operation with European companies supplying to China is a strong deterrent. "The US market is much bigger and more important than China could ever be."