China’s arms exports in South Asia

First, the country's domestic defense sector and the economic measures adopted to reform it, and second, the political and economic forces that push and pull for Chinese conventional weapons in the global market [1].

Beijing has also moved swiftly to focus on new and emerging technologies. This has made it possible for Chinese arms companies to fill the gap created by other providers. The sale of a variety of expensive equipment, including UAVs, is restricted in the United States but China has made its UAVs available to a number of nations, including Pakistan, the UAE, Saudi Arabia, and Egypt. Serbia became the first European country to use Chinese combat drones when it purchased CASC CH-92 Wing long-armed drones, a sign of how close Belgrade is to Beijing [2]. China has a history of providing arms to nations that are unpopular with the United Nations. Great targets for China are nations like Venezuela and Bolivia which the United States has abandoned due to political considerations.

China’s arms exports:

It is in the last decade that China has emerged as a net arms exporter. As per the Stockholm International Peace Research Institute (SIPRI), China stands as the fifth largest arms exporter globally between 2010 to 2020 after the United States of America (USA), Russia, France, and Germany [3]. Beijing sells the majority of its weapons to its neighbors. Even though China exported few weapons between the middle of the 1990s and the middle of the 2000s, the majority of what it did sell went to Asian nations. This pattern has persisted as China has assumed a larger role in the world's arms trade. China has sold a total of 63.4 percent of conventional weaponry to Pakistan, Bangladesh, and Myanmar since 2010.

China provides Pakistan with the most armaments of any other nation due to its close military connections. Sales increased from 250 million TIV in 2008 to over 758 million TIV in 2009 as a result of growing collaboration between Beijing and Islamabad on anti-terrorist operations. Sales to Pakistan have been averaging 586.9 million TIV annually since 2010. Another major consumer of Chinese arms is Bangladesh. China provided the South Asian nations with 2.6 billion TIV worth of weapons between 2010 and 2020. This makes up 73.6% of Bangladesh's foreign military purchases during this time, making China Dhaka's top supplier of armaments. China encourages these purchases with generous financing and affordable costs. The 2013 transfer of two old Type-035G Ming-class submarines to Bangladesh for a little over $100 million each is one example of a discounted acquisition. Bangladesh has also received the majority of its small arms from China since 2006, totaling over 16,000 rifles and 4,100 pistols.

The third-largest market in South Asia for Chinese weaponry exports is Myanmar. Myanmar has increased its procurement of foreign weapons after the lifting of sanctions against it at the beginning of the 2010s. Myanmar has brought in 970 million TIV worth of conventional weaponry from China since 2013. 17 JF-17 aircraft, 12 Chinese Rainbow UAVs, 2 Y-8 transport planes, 2 Type-43 Frigates, and 76 Type-92 armored vehicles are among the more expensive components. Notably, it was discovered that the Myanmar military had used Chinese-made CH-3A tactical UAVs to monitor protests that had started after the February 1, 2021 coup.

The strategic significance of China’s arms exports:

In a report released by Carnegie Endowment for International Peace in 2021, four South Asian nations namely, Bangladesh, Maldives, Nepal, and Sri Lanka have recently been the most significant sources of Chinese influence [4]. The Hambantota and Colombo port projects in Sri Lanka and the Padma Multipurpose Bridge Project in Bangladesh are just two examples of high-value project finance and operations partnerships that reflect this. China has consistently been cited by the governments of the four nations as an essential development partner, whether as a financier or in terms of offering technical and logistical help.

Influenced by its growing economic influence and pursuit of strategic interests, China’s entry into the global arms market is backed by three major developments [5]. Firstly, the Defense, Science, Technology, and Industrial (DSTI) system of China has seen improvement in developing advanced defense technology and platforms ultimately expanding the operational requirements of the People’s Liberation Army (PLA). Second, China's continued increase in military spending is fueling the country's expanding position in the world's arms markets, particularly its capacity to export weapons. Only the USA presently spends more on defense, but China has surpassed Japan, France, Russia, and the United Kingdom to take over as the second-largest spender globally. As a result, more funding has become available to support China's armaments production and technology acquisition, particularly of foreign technologies, which has had a significant impact on the development and modernization of the Chinese military-industrial complex and, consequently, its capacity for arms export. Thirdly, China's strengthening position in the global arms markets reflects its expanding geostrategic interests around the world and anticipation of a new era of escalating strategic competition and significant changes in the world security landscape. China is progressively using arms exports as a tool of its foreign policy in this context to project presence, power, and influence in regions important to its interests, such as South and Southeast Asia. One method Beijing is strengthening its economic ties with emerging nations is through promoting the Belt and Road Initiative (BRI). In addition, China's arms export plan seeks to compete in markets that have historically been controlled by Russian supplies of arms to a few nations in Latin America, Africa, and even Central Asia.

Implications and concerns for India:

China is currently the biggest foreign investor in Sri Lanka, Pakistan, and the Maldives. Chinese investment is mostly focused on hard infrastructure, including ports, airports, bridges, highways, railroads, and power. Beijing has invested in the stock exchanges in Dhaka and Karachi and encouraged the Yuan trade between China and Pakistan. China is also accused of giving excessive credit to nations that are unable to pay their debts in order to obtain political or economic concessions, particularly through the Belt and Road Initiative (BRI) [6]. The rising backdoor influence of China is a major strategic setback for India. India would need to counterbalance China in the Indian Ocean region through its defense export policy. China has the economic clout to sell weapons at a discount but India has the advantage of charming the smaller countries with an open-arms strategy. Smaller Asian states may suffer from an overreliance on China which India can take advantage of. While China utilizes BRI and military sales as further tools to encircle and destabilize the country, it is time for India to move with its own arms export policies as a strategic tool for garnering influence.

Concern over faulty Chinese exports:

Recent reports about countries being dissatisfied with Chinese military equipment that China exported them under the guise of various commercial defense transactions with them have come in from all over the world.

Nepal purchased six Chinese-made Y12e and MA60 planes for its civil aviation industry. However, all of these planes, strangely enough, displayed mechanical and operational flaws, forcing the company to store them in a hangar where they have been sitting unused for several months. In 2017, Bangladesh purchased two Ming Class Type 035G submarines from China for US$100 million each. Both the newly renamed BNS Joyjatra and BNS Nobojatra have faults and are currently sitting idle. It acquired two Chinese 053H3 frigates in 2020, redesignating them as BNS Umar Farooq and BNS Abu Ubaidah. However, soon both of them encountered difficulties including malfunctioning weapons and navigational devices [7].

As Chinese weapons remain mostly untested in combat and have hidden costs, including political ones, experts say China's share of the global market for arms exports is declining [8].

Data from the Stockholm International Peace Research Institute show that during the five years between 2016 and 2020, sales of arms from the second-largest economy in the world decreased by 7.8%. According to the report, China's exports of weaponry decreased from 5.6% to 5.2% of the global market. However, despite the concerns over faulty equipment and the decline in exports, it must be noted that China still enjoys a regular client list that still engages with China for armament.

Opportunities for India:

By developing a fresh, innovation-focused defense strategy, the Indian government has also allowed private businesses access to the defense industry. TATA, Mahindra & Mahindra, L&T, Hero Group, and Bharat Forge, in addition to PSUs like HAL, BEL, BHEL, and a few start-ups, are some of the highly regarded Indian commercial entities that are already contributing to the enormously lucrative national defense manufacturing sector, which is worth US $620 billion.

In comparison to Chinese enterprises, both the private sector and PSUs in India have far higher quality requirements. It is clear from the recent massive increase in Indian weaponry exports, which saw a 700% increase from Rs 1,521 crore in 2016–17 to Rs 10,745 crore in 2018–19. With a strong focus, proper government backing, marketing efforts, and diplomatic pressure, the Indian defense manufacturing sector may very well make significant strides in the lucrative security sector on a worldwide scale. In turn, that might give India more political and diplomatic clout in international affairs eventually enabling India to counterbalance China in the region of South Asia.

Endnotes:

1.       Taal Seth, “China’s Growth in the Global Arms Trade”, Diplomatist, 12 June 2021 https://diplomatist.com/2021/06/12/chinas-growth-in-the-global-arms-trade/

2.     Air Marshal Anil Chopra (Retd), “China’s Growing Defence Exports – Implications & Options For India”, Chanakya Forum, 07 March 2022 https://chanakyaforum.com/chinas-growing-defence-exports-implications-options-for-india/

3.      “How Dominant is China in the Global Arms Trade?”, China Power Project, Center for Strategic and International Studies https://chinapower.csis.org/china-global-arms-trade/

4.     Deep Pal, “China’s Influence in South Asia: Vulnerabilities and Resilience in Four Countries”, Carnegie Endowment for International Peace, October 2021 https://carnegieendowment.org/files/202110-Pal_SouthAsiaChina_final1.pdf

5.     Michael Raska & Richard A. Bitzinger, “Strategic Contours of China’s Arms Transfers”, Strategic Studies Quarterly https://www.airuniversity.af.edu/Portals/10/SSQ/documents/Volume-14_Issue-1/Raska.pdf

6.     Air Marshal Anil Chopra (Retd), “China’s Growing Defence Exports – Implications & Options For India”, Chanakya Forum, 07 March 2022 https://chanakyaforum.com/chinas-growing-defence-exports-implications-options-for-india/

7.     Ralph Jennings, “Why Chinese Weapons Exports Are Declining Despite Loyal Clientele”, VOA News, 05 October 2021 https://www.voanews.com/a/chinese-weapons-exports-decline/6258163.html

8.     “Faulty Chinese Military Hardware Is Paving Way For India To Emerge As A Global Weapons Exporter”, The Eurasian Times, 09 November 2020 https://eurasiantimes.com/faulty-chinese-military-hardware-is-paving-way-for-india-to-emerge-as-a-global-weapons-exporter/

Pic Courtsey-Pankaj Jha

(The views expressed are author's personal views.)