China Adjusted Batch Production of Illegal Copies of the Russian Weapon

During last years the Russian and world press wrote a lot about economic successes of China. However recently, after world financial crisis in January tone of some editions has changed. Article of Harold Maas in the German newspaper "Frankfurter Rundschau" can serve as an example.

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Meat becomes luxury

Last weeks the sellers from dairy departments in supermarkets of a trading network "Tszinkalon" in Peking have more than enough work. "Prices for yoghurts and other dairy products grow so quickly that every few days we have to change price lists", - the saleswoman speaks. Therefore some of the buyers, first of all pensioners and seasonal workers leave refrigerating show-windows aside. "I cannot afford some fresh milk any more but my children sometimes still buy it to me", - the former state employee, 65-years old Chzhan which lives today on scanty pension says.

Now China experiences the strongest price increase for last 11 years. In the first quarter of this year inflation in annual calculation has made 8%, in April - whole 8,5%. Thus it has distinctly stepped over limit in 4.8% established by the government for 2008. "Inflation is the biggest threat of economical stability", - Economic Research Institute of the National Commission on Development and Reforms warns.

The chief concern of the government is, first of all, flied up prices for food stuffs which in the first quarter have grown on 21% in annual calculation. In April price for meat exceeded last year's on 47,9%. One kg of pork costs now in Peking 26 yuans (2,50 euros) - half of a day time earnings of the seasonal worker. The growth of prices for vegetables and other products has almost the same rate. "Each time when I go to a supermarket, I see that everything is more expensive, than it used to be only one month ago", - pensioner Chzhan complains.

As the majority of the Chinese is still poor and measures well-being by daily presence of meat on a table, the rise in prices is capable to cause political explosion. Galloping inflation reigned during last months before student's demonstrations in 1989 on Tiananmen Square in China.

During March disorders in Tibet when people set fire to shops in Lhasa and plundered supermarkets, the reason of protests became disappointment caused by rise in prices. In a southern industrial province Guangdong and some other regions faults in supply of rice were already marked. In view of fear before wide social disorders in January the Peking government put prices for the basic foodstuff under the state control. Manufacturers of rice, meat, milk, vegetable oil and eggs can be rose only from the sanction of the government.

Share prices of the major concerns specializing on manufacture of foodstuff, for example, of dairy concern "Maine Nju" and enterprise "Tsoftso" engaged in wholesale trade of grain and vegetable oil fall after it on 25% and more. In the meantime authorities under the threat of serious punishment try to limit smuggling of grain and to leave thus a crop of rice in the country. In Hangchow, large city in the east of the country, the customs detained 33 tons of wheat during just few days which was supposed to be sold in the world market under the price exceeding internal, newspaper China Daily wrote. To avoid faults in supply of fertilizers during sowing, the government introduced on them 100-percent export duty.

Experts are afraid that the rise in prices on products will pass to other spheres and thus will strike on till now prospering economy. "The fear that proceeding rise in prices for products will provoke increase of salaries and will lead to significant inflation grows", - International currency fund warns.

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From editorial staff: If in Moscow the confidence that China is destined to become a superstate equal to the USA is prevailing, in the West some experts express more cautiously, specifying, in particular, historical precedents.

So, at the end of 1950 - the beginning 1960, after the launch of the first satellite and Jury Gagarin's flight fears that the USSR was just about to catch up and be ahead of the USA appeared in the USA and Europe. It failed to happen and soon Soviet Union was captured with stagnation crowned by reorganization and self-liquidation of the country.

In the beginning of 1970th years, when the results of created due to the help of the USA "German economic miracle" and oil embargo of the Arabian countries in 1973 started to come into effect to the full, they suddenly found out in America that global political competition would be made by the Western Europe (European Economic Community) and Saudi Arabia. It also did not take place, though friction between the USA and "Old" Europe were well-known.

At last, in 1980th years America seriously was afraid that it would be moved from the first to the second position in the world by extremely dynamical at that time Japan. But Japan in 1990th years was captured with the deep stagnation which had not been overcome till now.

It is remarkable that after Japan another dynamical Asian country - South Korea - appeared. Whether it's not regular? If it's regular, whether it not appears in China which internally, probably, is much more poor, than it is represented to foreigners?

However, neigbouring to China Russia doesn't feel better from its internal weakness, as it, as a matter of fact, has rotted through from within and lives exclusively due to export of power resources. Using it, the Chinese on the sly solve at her expense one problem after another.

As Rejben F. Johnson writes online in the American edition of WEEKLY STANDARD, Russia and China are about to collide in a large question of national safety and strategic importance for both sides. It's not the question of a route of a gas main, development of nuclear arms or prompt rise in price of the Russian oil. The matter is in old propensity of the Chinese to make illegal copies of hardly not everything.

In the beginning 1980^th years and before disintegration of the USSR the Soviet aviation industry created two extremely effective models of fighters with two engines and tail plumage with spaced-apart rudders: "MiG - 29" - created by Development Design Office named after Mikoyan and "Su-27" - creation of Design Office of Sukhoj. The second of them was larger, than small and more maneuverable "MiG". It was in one weight category with "F-15" from Boeing corporation and, similar to the American analogue, should serve as interceptor of distant action which is necessary for the states with rather extended air boundaries requiring defense.

In the beginning of 1990^th People's Republic of China was eager to get such plane. The Chinese industry had been working over creation of similar plane for many years but its attempt to design something innovative stopped for 10 years. In the meantime the Russian armed forces in general ceased financing of industry of the country and placing orders. Manufacturers of the Russian arms could survive only due to export of production to China, India and other countries.

Some years after China for the first time got "Su-27" in export variant, it signed the contract with the Russian state structure which supervised export of weapon - "Rosvooruzheniye" - on manufacture under the license on Shenyang aviation factory of 200 additional pieces of "Su-27SК" and also subsequently ordered "Su-30МКК" - a double, multi-purpose variant of that plane. The Russian industry breezed easily: billions dollars from China started coming to its accounts.

But in 2004 the Chinese militarians declared Moscow that they had no further need in planes which China made under the license as, according to the Chinese militarians, "fighting capacity of these planes is too limited". Production of 200 pieces of "J-11" - the name Shenyang factory gave to "Su-27SК" - which were assembled in China was stopped after production of only 95 pieces. Thus 180 pieces of engines "AL-31F" created by Design Office "Saturn" named after A.Ljulka were delivered to the factory.

Three years later, in 2007 it became completely clear why Shenyang factory stopped licensed manufacture of "Su-27SК" on a half of a party planned. The Chinese industry learned everything it was required to it to copy that model of the plane and soon presented to the general attention "witty developed" fighter "J-11B" which on all external features looked analogue to "Su-27SК". The Russian authorities expressed themselves not in diplomatic form. Moscow "Independent Newspaper" having referred on the Russian sources declared that ""J-11B" - is absolute copy of "Su-27SК"".

That fact that Peking produces own copies of planes "Su" disturbed Moscow. Copy of "Su-27SК" potentially can have for the market of the Russian defence production the same consequences as the Chinese industry - for the American industry of household electronics. Precisely just as department stores of Wal-Mart are almost totally filled up with various goods of the Chinese manufacture, the market of fighters in future can be full with cheap Chinese copies of "Su-27". According to some pessimistic forecasts of the Russian experts, Shenyang factory can deliver to the export market up to 5 thousand "J-11B", that will force numerous states aspiring to modernize the Air Forces to refuse many western and even the Russian analogues of this technique.

"Independent Newspaper" informs that as a result Russia officially informed China that considers "J-11B" full copy of "Su-27SК" and that it's direct infringement of the contract obligations between the states, while Moscow also promised to initiate proceeding aiming to protect its rights of intellectual property.

However, it is difficult to understand, what court Moscow can address with the claims. China belongs to WTO, while Russia - no. Even if for submission of the judicial claim against China there would be a precise and clear way, legislative grounds of such claim would look doubtfully: piracy copying of software and other products protected by copyrights is distributed as widely in Russia as well as in other world.

Meanwhile there is another, more scale problem - Moscow is dependent on China in connection with its orders for another product of the defensive industry. At present the most part of engines made in Russia is exported to China for military aircraft. Besides Peking is - one of few perspective buyers of the number of the Russian arms of new generation. To bring to justice Asian "fellow travellers" - means to guarantee that recession of export of products of defensive industry to China made more than 60% last year would become even larger.

During credit crisis it is possible to hear a maxim: "If you borrow 5 thousand dollars, you become the property of a bank, but if you borrow 5 million dollars, the bank already passes into your property". If to transfer it on position of the Russian defensive industry, it will turn out that Moscow can make a little for basic change of situation it appeared. Moscow invested so much into business with China in sphere of the defensive industry that now it's almost unable to break off with them and to refuse completely from that market.

At the same time the price to remain in the Chinese market is similar to the price which gamblers pay for the game in poker on big money. It is necessary to refuse what you have already invested relying that you will manage to achieve financing of the following generation of military technique from Peking. For the Russian industry the risk is high, for the rest of world it's even higher. Now the question is, where the export market of the Russian weapon ends and the market of products of China (created on the basis of that the Chinese adopted from the Russian manufacturers) begins.

Natalya Roeva, political observer of FORUM.msk