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A Dead End?

Russian defense sales to the PRC.

11:00 PM, Feb 4, 2008 • By REUBEN F. JOHNSON
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THIS WEEK THE MOSCOW daily Nezavismaya Gazeta (The Independent Newspaper) reported what Russian defense industry officials have been saying for some time now about the steep decline in orders from the People's Republic of China (PRC). Beijing has been one of--if not the--biggest cash cow for Russia's weapons makers. A large portion of Moscow's defense industrial complex might have gone under in the early to mid-1990s without the massive orders from Beijing for fighter aircraft, naval vessels, air defense systems, and air-launched weapons.

But all this Chinese business is coming to a halt, according to some well-placed but unnamed sources that spoke to NG's Viktor Litovkin for an article entitled "Military Export Dead End: Moscow Is Losing A Major Buyer of Weapons."

"The time has past when China was in top number of the heavy buyers of Russian defense products," he writes. "At present, exports to the PRC of domestically developed military technology and weaponry are close to zero." A "well-informed source" tells the Moscow paper that there is now "serious concern" in Moscow over losing their Chinese market and that this has become the "central issue of attention in the preparations for an upcoming visit by the Russian Defense Minister to China."

But, even though this is a burning issue that has some rather weighty implications for Russia's future as a maker of high-tech weaponry--which in turn determines whether the country will continue to be a world power--there is no rush by the Russian side to push this meeting to the forefront of the current government's agenda. NG's anonymous source tells the daily that there is so far no set date for this visit to take place or for the two nations' defense ministers to participate in a session of the Russia-PRC bilateral commission on military-technical cooperation.

The delay in setting a date for the meeting between Russian Defense Minister Anatoliy Serdyukov and his Chinese counterpart, Cao Gangchuan--and possibly turning the tap back on for Chinese orders--appears to be part of the maneuvering now taking place in Moscow as Russian President Vladimir Putin's heir-apparent, First Deputy PM Dmitri Medvedev, prepares to run almost unopposed for the Russian presidency. NG's source tells the paper that "the meeting between the two ministers of defense will take place not earlier than the next Russian presidential election, but not later than when he officially takes office."

This is a clear signal, say some observers, that Medvedev wants to make sure that any restoration takes place under his presidency. This is consistent with two other major events that have taken place this week in Moscow.

Earlier in the week the local Moscow police arrested reputed mobster Semyon Mogilevich in an operation that is seen as an attempt by Medvedev's to fire a shot across the bow of the siloviki (the circle of former intelligence and security services personnel) within the Putin Kremlin. Local city police units were used in the arrest as the Federal Security Service or other law enforcement bodies (all controlled by the siloviki) would likely have tipped Mogilevich. His arrest is part of a power struggle between them and Medvedev's faction over control of the Russian natural gas monopoly Gazprom.

Currently Medvedev is the chairman of Gazprom, but later in the week the proverbial other shoe dropped when it was announced that the present Prime Minister, Viktor Zubkov, will take this position after the election. (Medvedev has already said that if or when he is elected president he will appoint Putin to be the next PM in Zubkov's place.) Zubkov is also Serdyukov's father-in-law, keeping control of Russia's gas empire and its weapons sales in the same family.

One official reason given in the article for this long delay in the two defense ministers meeting is the personnel changes at the MoD--chiefly the promotion of the former Defense Minister Sergei Ivanov, who originally proposed the bilateral discussions, to the post of First Deputy PM. The unfamiliarity of his successor, Serdyuov, with many of the issues that must be addressed at these talks is another. Serdyukov is a former St. Petersburg furniture store manager turned tax administration official. He has no background or experience in military matters. His appointment has been met with some disbelief given the need for a competent manager to reform and revive the Russian military.