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Sino-Russian defense cooperation has intensified significantly, especially after the outbreak of the Ukraine crisis, making an update of what I wrote in this journal barely a year ago important in a wide-ranging assessment of how the military situation is evolving in East Asia. Coming after a prolonged period of relative decline in defense relations between the two countries starting around 2005, this turnaround surprised many observers. In reality, signs of a potential turnaround were already evident to close observers as early as 2012, following Putin’s return to power. Soon thereafter, Moscow and Beijing commenced a series of joint naval exercises, completed new arms sales agreements, and even signed a new intellectual property agreement.¹

Defense cooperation increased even more sharply after the outbreak of the Ukraine crisis in 2014. Shortly thereafter, Moscow and Beijing concluded two major new arms sales agreements, stepped up the level of their joint military exercises, intensified the pace of their military-to-military contacts, and even tightened coordination of their respective regional and global security policies. Sino-Russian defense cooperation continued to operate at a high level throughout 2016, and even intensified in some areas. In many respects, 2016 was a banner year for the bilateral defense relationship. This article focuses on the progress of arms and technology transfers and joint military exercises before reassessing the factors driving the two countries to increase their defense cooperation, and what is likely to take place going forward.

Arms and Technology Transfers

Although no major new arms sale agreements were announced, Moscow and Beijing concentrated on delivering on the two landmark agreements signed in 2015, the sale of S-400 air defense systems and Su-35 combat aircraft to China. New details emerged regarding the delivery of aircraft engines and ancillary components associated with the Su-35 transaction, which will significantly expand the scope of that transaction. Talks continued as well regarding the potential transfer of up to four Lada-class submarines to Beijing. Russia and China also signed a definitive agreement for the joint development and production of an advanced heavy-lift helicopter for China in 2016. The two also agreed on joint production and technology transfer arrangements, and Russia’s purchases of Chinese systems and dual-use technologies increased as well.

The April 2015 arms sale agreement providing for the transfer of six battalions of the S-400 air defense system to Beijing at an estimated price tag of USD 3 billion was the first large-scale platform sale between the two countries since 2005.² With its powerful radar systems and long-range missiles, the S-400 is by far Russia’s most advanced area air defense system. According to a recent report, Russia also committed to deliver the 40N6E long-range missile (export version) to China when developed, which will enable the S-400 to strike a variety of aerial targets including aircraft, UAVs, and cruise missiles at ranges of up to 380km.³ Upon delivery, the S-400 will immediately become China’s most capable air defense system, significantly outstripping other systems in its inventory. Production has begun, and according to Rostec head Sergei Chemezov, delivery is expected to take place starting in 2018.⁴

As noted by a Chinese defense analyst, "the S-400 is definitely one of the top anti-aircraft weapons in the world. It will greatly supplement the People’s Liberation Army’s air defense system, which now has some loopholes in long-range, high-altitude defense of airplanes or ballistic missiles."⁵ A senior Chinese military official later disclosed that Beijing plans to deploy the S-400 along its coastlines, where they will provide extended air defense coverage over both the East and South China Seas, allowing China to contest significant parts of the air space near Taiwan and the Senkaku and Paracel Islands from land.⁶ Were the system to be deployed in the southwestern part of the country, China would also be able to contest parts of the airspace over northern India.

The other major arms sale agreement signed in November 2015 for the transfer of 24 Russian Su-35s combat aircraft to China at an estimated price tag of USD 2 billion went forward too.⁷ The Su-35 is Russia’s most advanced 4th generation combat aircraft, and it employs many of the features found only on 5th generation fighters, including supercruise capability, precision air-to-air weapons, and advanced avionics. Designed for both short- and long-range air-to-air combat, it has much greater range and maneuverability than China’s other 4th generation aircraft, making it a significant upgrade for China’s overall air combat capabilities.

Details emerged regarding the Su-35 transaction, shedding additional light on its scope. New reports have confirmed, for example, that the Chinese will receive the prized AL-41F 117S aircraft engine and Irbis-E radar system.⁸ In June 2016, it was further reported that China intends to purchase a small number of the latest Russian-made missiles for use with the Su-35, although details have not yet been provided.⁹ The report noted that China had also decided to purchase six spare AL-41F engines for each Su-35, rather than the standard option of two spare engines per plane. Beijing likely intends to use the extra engines for other purposes, such as powering its new J-20 stealth fighters, which are currently under development.¹⁰ Given that the Russians are now developing even better engines, it seems likely additional AL-41Fs will be sold.¹¹

Russia delivered the initial batch of four Su-35s in December 2016, while the remaining aircraft will be delivered in two installments in 2017 and 2018 respectively.¹² Once operational, the Su-35 will provide extended air coverage for the PLA Air Force when patrolling the East and South China seas. In a Taiwan conflict, the Su-35 would be assigned the mission of countering US and Japanese aircraft, while other Chinese fighters would be left to handle Taiwan’s less capable F-16 and Mirage2000 fighters.¹³

There was little visible movement in 2016 regarding the third major transaction which Moscow and Beijing have been discussing, namely the sale of four Russian Lada-class (Project 667) conventional submarines to China. The Lada is Russia’s latest diesel-electric electric submarine, and the Chinese have long sought to gain access to its advanced sonars, missiles, and quieting technologies. For its part, Russia has been trying to market the Lada to China for some time. But the system has been plagued with technical difficulties, leading the Russian Navy to announce recently that it would terminate the Lada program in 2019 in favor of developing the Kalina, an even more advanced submarine.¹⁴ Ironically, according to Russian defense expert Konstantin Makienko, most of the problems with the Lada’s design have now been resolved, except it still lacks an air-independent propulsion system.¹⁵ A March 2016 report stated that China is still negotiating for the purchase of up to four submarines,¹⁶ reportedly, for refitting with Chinese engines and electronic fire-control systems.¹⁷ We may see additional movement on this transaction although a related technology transfer agreement is more likely.

In 2016, progress continued on the project to jointly develop and produce an advanced heavy-lift helicopter for China, based on Russia’s Mi-26 design. After a framework agreement in 2015 to further evaluate the project, in June 2016, Jane’s reported that Russian Helicopters and China’s Avicopter signed an agreement to proceed with development and production,¹⁸ which provides for production in China of 200-300 helicopters over a five-year period.¹⁹ Russia will supply the engines and certain other components, while China will be responsible for the overall helicopter design, development, and testing programs.²⁰ The helicopter will be able to carry loads of up to 15 tons, while operating “round-the-clock in hot climates, mountainous terrain and all weather conditions, and will be able to fly a highly varied range of missions from transportation to medevac, firefighting and much more.”²¹

Additional arms sales transactions may soon be forthcoming. According to Vladimir Drozhzhov, deputy director of the Federal Service for Military-Technical Cooperation (FSMTC), China is already committed to procuring over USD 8 billion in armaments and military hardware over the next few years, indicating that the two may have already agreed upon transactions that have yet to be announced.²² However, similar announcements made in the past have not always panned out.

Reportedly, Russia and China have also been discussing a potential barter transaction involving the exchange of Russian RD-180 engines for Chinese electronic components.²³ China has been seeking Russian RD-180 rocket engines for use in developing a heavy-lift launch vehicle, although its technology could also be used to develop heavyweight, intercontinental ballistic missiles capable of carrying MIRV’d warheads.²⁴ Russia remains highly dependent on foreign electronic components for its space programs. However, problems have arisen during the negotiations. Early on, Moscow apparently turned down Beijing’s request for a license to the underlying rocket technologies. In April 2016, the proposed transaction was reportedly delayed, due to concerns in Moscow about transferring advanced rocket technology to a country (China) that is still not a party to the Missile Technology Control Regime (MTCR).²⁵ In order to protect its rocket technology, Moscow insisted that China sign a new intellectual property agreement, which likely addressed the MTCR issues as well.²⁶ Yet, in November 2016, the head of Roscosmos indicated that the transaction is still in play.²⁷

During the year, Russia also continued to pursue other means for obtaining Chinese electronics for its military and space programs. Russian firms already import a certain amount of Chinese electronic components.²⁸ Back in 2014, Moscow planned to purchase several billion dollars’ worth of additional electronic components from Beijing.²⁹ Such plans had to be scaled back, however, partly because Chinese components were unable to meet Russian test requirements, and partly because China was prohibited from re-exporting certain components to Russia due to license restrictions imposed by the West.³⁰ Yet the two countries have still managed to achieve progress in this area. According to the head of Reshevnets, a Russian space enterprise, a number of Russian companies have recently begun to purchase electronic components from China to replace those no longer available from the West.³¹ Others, like Reshevnets itself, are actively discussing the purchase of additional electronic components with Chinese manufacturers.³²

China also continued to supply other kinds of military-related equipment. In March 2016, Henan Diesel Engine Corporation was awarded a contract to supply eight marine diesel engines for use in Russia’s Buyan-M missile corvette. These will replace the original German engines used in the Buyan before Berlin suspended deliveries.³³ China is also now supplying marine engines for Russia’s Grachonok-class (Project 21980) patrol boats to replace the original German engines.³⁴

Joint research and development projects—a small but important component of defense cooperation—between Chinese and Russian enterprises also continued in 2016. Russian defense technology giant Rostec continued projects with Chinese defense firms NORINCO and CSGC to jointly develop and produce a variety of civilian and military products.³⁵ In November 2016, Russian satellite firm GLONASS signed a memorandum of understanding with NORINCO for development of a new chipset for its navigation satellites.³⁶ In a separate transaction, Russia and China agreed to create a joint venture for the production of precision metalworking machine tools for the Russian machine-building industry and defense-industrial base.³⁷ Also, in November 2016, Roselektronica, a Rostec subsidiary, and China Electronics Technology Corporation (CETC), a major Chinese defense electronics firm, signed a memorandum of understanding to consider options to jointly manufacture new semiconductors.³⁸

Russia and China have also been deepening their cooperation in the cyber domain. In June 2016, Putin and Xi issued a joint statement, committing to enhance scientific and technological cooperation in the information network space, carry out joint research and development on information and communication technologies, and increase information exchanges and personnel.³⁹ Earlier, in April they held a joint information and communications technology development and security forum in Moscow.⁴⁰ The two are cooperating at both the corporate and governmental levels to enhance information and internet security.⁴¹ Russia is now relying heavily on Chinese technology and assistance to achieve greater security and control over the Internet.⁴²

Moreover, according to a researcher at the PLA Academy of Military Science, the decision to deploy the THAAD system in South Korea “did forced China and Russia to expand their anti-missile cooperation and speed up the modernization of strategic penetration capability.”⁴³ The two have even begun to discuss the possibility of creating a joint missile defense shield, which would be built and fielded under the auspices of the SCO.⁴⁴ Since they are not formal allies, it seems highly unlikely that things will progress that far anytime soon, although they may now be willing to share more of the underlying technologies.

Joint Military Exercises

Joint military exercises represent the other major focus of defense cooperation. Once again, joint naval exercises in the Western Pacific together with the Peace Mission 2016 exercises conducted under the SCO were the principal exercises held during the year. For the first time, the two conducted a joint missile defense exercise in Moscow. Chinese security forces together with units of Russia’s recently-established National Guard held joint counter-terrorism exercises in Russia. Beijing once again sent specialized units to Russia to compete in the 2016 International Army Games held near Moscow. Thus, in 2016, military exercises were even more representative than arms sales of the growing defense relationship between Russia and China.

The 2016 edition of the bi-annual Peace Mission military exercise was held in Kyrgyzstan from September 15-21. According to Chinese sources, a total of 1,100 troops from Russia, China, Kazakhstan, Kyrgyzstan, and Tajikistan participated.⁴⁵ Under the exercise scenario, SCO forces had to repel armed terrorist formations, which had crossed the border into Kyrgyzstan. Yet some of the activities were more typical of those used in high-intensity combat operations than for counter-terrorism. Chinese helicopters fired air-to-air missiles against aerial targets, while Russian strategic bombers conducted bombing missions against the notional adversary.⁴⁶ The two likely had larger threats in mind when structuring these exercises. The Russian contingent also used drones and automated combat systems for the first time at a Peace Mission exercise, applying the reconnaissance strike tactics honed in Ukraine and Syria.⁴⁷ Such tactics would likely have been of great interest to the Chinese.

The Peace Mission 2016 exercise took place at a time when both Russia and China (and their SCO partners) have been expressing increased concern about the deteriorating security situation in Afghanistan, leading them to recently ramp up joint efforts to counter that threat. Last year, Russia hosted “two foreign policy and defence ministerial meetings of the SCO countries [on] Security in Afghanistan and Central Asia.”⁴⁸ Moreover, in December 2016, China, Russia, and Pakistan held a joint meeting in Moscow to coordinate efforts to counter the emerging terrorist threat in Afghanistan, a growing sign that Moscow and Beijing may be contemplating increased involvement in the Afghan conflict.⁴⁹

The Joint Sea 2016 naval exercises held on September 12-19 were of even greater significance for defense cooperation, both because of the nature of the exercises, and their broader political implications. This was the fifth time the two have conducted joint naval exercises since 2012. This time, in a move fraught with political symbolism, the two held the exercises in the contested South China Sea. In total, fifteen warships participated, including ten Chinese and five Russian vessels.⁵⁰ The drills encompassed a wide range of activities, including search and rescue, ship-boarding operations, and naval live fire drills, but by far the most significant elements were the force-on-force naval drills and amphibious exercises conducted during the final stages.⁵¹

The force-on-force exercises included a series of high-intensity air defense, anti-surface warfare, and anti-submarine drills. Participating ships were first broken into red and blue fleets consisting of mixed Chinese and Russian detachments. Next, the blue fleet launched a series of attacks against the red fleet using aircraft, submarines, small boats, and even frogmen, while the red fleet attempted to detect and counter such attacks using a range of tactics.⁵² Both side practiced complex offensive and defensive naval operations under simulated combat conditions. Later, separate red and blue forces, consisting of mixed Chinese and Russian detachments, conducted joint amphibious exercises. The red force was assigned the mission of seizing an island defended by an embedded blue force supported by air and naval groups. Then a combined Sino-Russian red marine force supported by an advance team of Chinese divers stormed the beaches while helicopter-borne troops landed in the island’s interior.⁵³ The exercises allowed them to gain additional experience with expeditionary operations, an area of increased interest for both.

The Joint Sea 2016 naval exercise demonstrated how the Sino-Russian defense relationship has grown. Russia’s willingness to hold the exercises in the South China Sea constituted a tacit show of support for China’s position in the region. Although Moscow has been careful not to pick sides in the South China Sea territorial disputes to avoid alienating its friends in Southeast Asia, the exercises clearly signaled mutual displeasure regarding the growing US presence in the region. Moscow and Beijing demonstrated an increased level of interoperability between their respective fleets. For the first time, the two countries used a single command and control system, allowing for full sharing of highly sensitive radar and sonar data.⁵⁴ Since countries normally tend to share such data only with their closest defense partners, “the joint drill demonstrates the high-degree of strategic mutual trust between the Chinese and Russian armed forces.”⁵⁵

Russia and China also conducted a joint missile defense exercise for the first time in 2016—largely in response to the decision to deploy the THAAD anti-missile system in South Korea. That decision was roundly criticized by their foreign ministers in a joint statement issued in April 2016, as both countries believe that THAAD undermines their strategic deterrence capabilities.⁵⁶ Designated "Aerospace Security-2016" and characterized as a computer-assisted command staff antimissile defense exercise, the six-day exercise was held in Moscow.⁵⁷ The objective was to “drill joint maneuvers and operations of rapid reaction anti-aircraft and anti-missile defense units of Russia and China in a bid to defend the territory from occasional and provocative strikes by ballistic and cruise missiles.”⁵⁸ According to Vasily Kashin, the two likely worked on means of integrating Russian and Chinese missile defense systems, which would eventually entail exchanging sensitive radar data.⁵⁹ In October 2016, Moscow and Beijing announced plans to hold a second round of exercises in 2017.⁶⁰ Reports indicate that the exercises could eventually expand to include live fire tests as well.

While the above three exercises were clearly the most important ones held by them in 2016, the two participated in other exercises and activities as well In July 2016, for example, Russia and China held a joint counter-terrorism exercise at locations near Moscow and Smolensk in Western Russia. Participating forces included units of the Chinese People’s Armed Police Force and units of Russia’s National Guard Vityaz group.⁶¹ This was reportedly the third time that interior troops had engaged in joint exercises.⁶² From July 30 to August 13, Chinese forces also participated in the Russian-sponsored International Army Games, an annual competition intended to test the skills of various kinds of military units against those of other countries. While China’s participation tends not to be taken all that seriously by outside observers, it is notable that China sent a delegation of more than 1,000 troops from the Army, Navy and Air Force to the games.⁶³ The two also held a number of joint security-related meetings and conferences during the year.⁶⁴

Analysis—Drivers, Implications and Future Direction

Clearly, 2016 proved to be yet another important year for Sino-Russian defense cooperation. The two maintained a high tempo of military-to-military engagement, holding several meetings between their defense ministers and senior military commanders.⁶⁵ They continued to cooperate on security issues at international fora, most notably at the United Nations.⁶⁶ Most importantly, Putin and Xi met on five occasions to discuss international security issues among other things.⁶⁷

That does not mean, however, that Moscow and Beijing have finally overcome all of the problems that have long plagued their defense relationship. Arms trade continues to suffer from mistrust on both sides. The tortuous history of the Su-35 sale is a prime example. It required years of difficult negotiations to complete, and it was long opposed by many in the Russian defense sector who feared that the Chinese would simply copy the system. Such suspicions were reinforced when Beijing offered initially to buy just four planes for technological assessment.⁶⁸ For its part, Beijing continued to suspect that Moscow had overcharged it for the planes, especially after it was revealed that the Russian Air Force had paid a considerably lower per-unit price for its own Su-35s. Without the intervention of both Xi and Putin, it is not at all clear that this transaction would have ever been concluded.⁶⁹

In addition, as the RD-180 transaction shows, there are still hard limits on the kinds of technology that Moscow is willing to share with Beijing, and on what China will share with Russia. Joint military exercises remain relatively limited in terms of their numbers, scale, complexity, and the degree of interoperability exhibited, especially in comparison with the kinds of joint exercises typically held between the United States and its allies.⁷⁰ Furthermore, although leaders frequently make bold statements about the nature and direction of their defense relationship, such statements often fail to live up to the reality. Despite substantial progress in defense cooperation, there still seems to be little prospect that Russia and China will form a true military alliance anytime soon, primarily because neither wants to be drawn into a conflict with a third country, especially the United States, over an issue (e.g., Taiwan or Ukraine) which does not affect its vital interests.

Yet, Sino-Russian defense relations continue to intensify despite such limitations. The sharp increase in defense cooperation in 2014 was largely a byproduct of the Ukraine crisis. As Moscow’s relations with the West deteriorated, it looked increasingly to China for economic and political support to compensate. As dependence on China increased, its willingness to transfer more of its most advanced weaponry as a form of quid pro quo increased as well.⁷¹ China now had the upper hand, and it used its leverage to bargain for increased access to advanced weapon systems. The scale of joint military exercises increased significantly as well, partly as a show of solidarity by China in the face of Western attempts to isolate Russia for its actions in Ukraine, but also because both countries benefited geopolitically and militarily from such exercises.⁷²

By early 2015, however, it was becoming increasingly clear to Russia’s leaders that Chinese economic and financial support was going to fall well short of what Moscow had been seeking. Lack of progress was partly attributable to China’s own economic slowdown, partly to its lack of a well-developed financial system capable of meeting Russian requirements, partly to reluctance to invest in Russia’s shaky economy, and partly to hard bargaining on China’s part. Thus, despite the rhetoric emanating from both countries that their relationship is now at its best stage in recent history, it is clear that Sino-Russian economic cooperation has yet to live up to expectations.

By comparison, defense cooperation has been a distinct area of success, which both sides can unabashedly point to as evidence of their enhanced strategic partnership. It has brought tangible benefits to both sides, as Russia’s defense industry is once again receiving significant revenue flows from Chinese arms sales, while China is finally getting access to some of Russia’s most advanced weapons technologies. Both benefit substantially from joint military exercises, which allow them both to improve their capabilities while building trust and promoting additional arms and technology exchanges. Defense cooperation has also been a useful tool for both parties in signaling that they have other options if the West elects the road of increased confrontation. This signaling function has become increasingly important for both countries over the last two years, as both have found themselves involved in increasingly competitive security relationships with the United States. The recent US decision to deploy the THAAD anti-ballistic missile system in South Korea has given further impetus to the growing Sino-Russian defense relationship, as both countries are now actively cooperating to counter US missile defense.

The underlying economic, geopolitical, and military factors driving the defense relationship forward remain strong. Although China continues to retain most of the leverage, the relationship has become slightly more even-handed as Russia’s concerns about impending economic collapse have dissipated (making it less desperate for China’s assistance), and as Beijing’s need for Moscow’s support on issues such as the South China Sea court ruling and missile defense has increased. Absent a significant change in national leadership, or a major shift in the underlying geopolitical situation, Sino-Russian defense cooperation is poised to remain at a high level, at least over the near term.

Since Putin and Xi both appear to be solidly entrenched in their current positions, a change in the underlying geopolitical situation is the most likely factor that could spark a change in the level of China-Russia defense cooperation. Here the Trump factor looms large. Given that the increase in Sino-Russian defense cooperation has been driven in significant part by a shared sense of vulnerability and strategic threat from the United States, a change in the US stance towards either or both countries could significantly alter the underlying incentives driving them to pursue closer ties. This gives Trump an opportunity to influence the direction of their defense cooperation.

Overtures under his administration would likely favor Russia over China. Trump has consistently vowed to improve US-Russian relations. Rex Tillerson, his secretary of state, has also been a proponent of lifting restrictions on Russia, although in his confirmation hearings he argued that sanctions should be kept in place until the administration develops its approach.⁷³ By contrast, Trump has adopted a confrontational position on China, promising to take actions to redress Chinese trade restrictions and currency manipulation practices.⁷⁴ As president-elect, one of Trump’s first acts was to telephone Taiwan’s president Tsai Ing-wen, and he has even hinted at willingness to abandon the longstanding “One China” policy.⁷⁵

Were Trump to carry through such policies, what would it mean for Sino-Russian defense cooperation? If he were to label China a currency manipulator, it might lead to imposing penalties, such as barring Chinese firms from US government contracts.⁷⁶ In such a case, China’s incentives to cooperate with Russia would remain largely unchanged. If, however, Trump were to move away from the “One China” policy or adopt a more confrontational approach to the South China Sea disputes, as Tillerson advocated, Beijing would be pushed to pursue even closer defense ties.

If Trump were to adopt a more conciliatory approach towards Russia, the results would depend on how far he was willing to go. Unless significant sanctions relief occurred, there would not be much effect because they would do little to relieve Russia’s underlying dependence on China. Recently, however, Trump spoke about the possibility of lifting sanctions if Russia successfully cooperated in fighting terrorism.⁷⁷ If sanctions were to be lifted, Russia’s dependence on China would decrease significantly, which would likely lead it to moderate its defense cooperation. Russia might be less willing to transfer its most advanced weapon systems and be less supportive of some of Beijing’s more provocative actions, such as in the South China Sea.

Even if Trump were to successfully institute a full reset of US-Russian relations, Sino-Russian defense cooperation would still likely be maintained at a fairly high level for three reasons. First, defense cooperation is now an established part of the overall relationship, complete with its own institutions and longstanding relationships. Despite its many shortcomings, both parties continue to benefit significantly from the defense relationship, providing real incentives for it to continue. Second, defense cooperation is part of a broader relationship, which has been expanding steadily for more than 25 years. While shared opposition to the United States has been an important factor, the relationship is based on a variety of strategic, economic, geopolitical, ideological, and military factors, all of which will continue to drive the relationship forward regardless of the state of relations with the United States.⁷⁸ Third, Putin has developed a strong mistrust of the United States based on long years of experience with multiple failed resets. He is likely to look skeptically at the possibility of achieving a lasting breakthrough in relations with Washington, especially given the transient nature of the US presidency. By comparison, China has been a more reliable partner, one that Putin will seek to maintain regardless of any improving relations with the United States. While US policy can influence the scope and intensity of Sino-Russian defense relations, they are poised to continue at a significant level over at least the near-term.