ABSTRACT

The People’s Republic of China’s military acquisition from the international arms market has declined steeply in the last two years: from the peak of US$2.2 billion in 2002 to $100m. in 2006, and $170m. in 2007. Since 90% of China’s foreign purchase comes from Russia, this has raised the world’s attention to the problems of Sino-Russian arms trade (SIPRI 2008). In contrast, Russia’s sustained increase in overall arms sales in the world market, with minimum Chinese contribution, testifies that it has successfully found alternative markets. The question is then a strategic one: does this represent a hiccup or a pattern of future developments? This chapter argues that there are structural attributes to the slowdown; therefore, it is not just a hiccup. The primary reason is that the overall Sino-Russian relations have been strongly influenced by factors of expediency that have impacted on bilateral arms relations since they began in 1991. When the conditions upon which this expediency rests change substantially, the arms trade will reflect this change, especially in terms of altered supply and demand relations. This is what has happened in the last few years. This chapter will present a detailed analysis of the changing conditions for the Sino-Russian arms trade.