Mercantile Cooperation

How investing in Ukraine helped China leapfrog many generations of weapons technology

Prasun K. Sengupta

Since 1991, China has struck several military-industrial partnerships with original equipment manufacturers (OEM) based in the Commonwealth of Independent States (CIS), especially in Ukraine, Belarus and Kyrgyzstan, for the purpose of obtaining critical research and development (R&D) inputs that are required for developing and producing new-generation weapon systems for the People’s Liberation Army (PLA). When the Soviet Union dissolved in late 1991, Ukraine was left with about 30 per cent of the Soviet-era military-industrial facilities on its territory, including about 750 factories and 140 scientific and technical institutions.


Presently, 300 enterprises, institutions, and organisations employing more than 250,000 people are producing military equipment in Ukraine. Of these, 75 are registered as manufacturers of military products and services that are subject to state secrecy, including rocket and guided-missile technologies. The state holding company Ukroboronprom, established in 2010, oversees 134 Ukrainian state-owned military-industrial enterprises that employ 120,000 workers. Ukraine exports the rest to the tune of USD 1.3 billion worth of arms annually. Ukraine was the eighth-largest arms exporter in the world between 2009 and 2013.

Ukroboronprom’s sales reached USD1.79 billion in 2013, an increase of 17 per cent on the previous year. Russia was the third-largest buyer of Ukraine-origin military hardware from 2009 to 2013, after China and Pakistan. Following Russia’s annexation of Crimea in March 2014, Ukroboronprom decided to halt all exports of weaponry and military equipment to Russia, whose outstanding orders from Ukraine in the civilian and defence sectors were at that time valued at more than USD15 billion. Terminating these contracts has adversely affected 79 Ukrainian and 859 Russian military-industrial firms. Ukrainian exports represent only a small fraction—between 4 per cent and 7 per cent—of Russia’s overall military imports. The number of buyers of Ukraine’s nuclear and ballistic missile technologies is fairly small but includes China, North Korea, Syria, and Iran. Chinese and North Korean agents have on several occasions been caught attempting to break into Kiev’s R&D facilities for trying to acquire long-range ballistic missile technologies. In 2012, two North Koreans were arrested for spying after they tried to steal classified ballistic missile technologies from the Dnipropetrovsk-based YUZHMASH (designer of satellites and rockets).


Missile Development

In 2002 the Industrial Policy Ministry of Ukraine and China’s Commission for Science, Technology and Industry for National Defence (COSTIND) signed a protocol on cooperation in the military-industrial arena. Ukraine’s weapons shipments to China in 2002 amounted to a mere USD50 million a year.

By 2012, Ukraine had become the world’s fourth-largest weapons exporter and sold weapons and military technologies to China worth USD700 million, which accounted for 31 per cent of Ukrainian exports that year. In 2011, 43 per cent of Ukraine-built weapons were sold to China, while in 2013 Ukraine became China’s second-largest trade partner in the CIS, while China became Ukraine’s biggest military customer in Asia.

Since 2002, the following Ukraine-based firms/enterprises/ R&D institutes have had military-industrial partnerships with the PRC: Aerotechnica-MLT Ltd, Arsenal Central Design Bureau State Enterprise, Arsenal State Enterprise Plant, Aviakontrol Joint Stock Company (JSC), Avionika Ltd, Buran State Enterprise Research Institute, Chernomosudoproekt, Chernomorsky Shipbuilding Yard (formerly the Nikolayev South Shipyard Soviet Shipyard No. 444), Engine Design Bureau of Kharkiv (EDBK), Feodosya State-Owned Optic Plant, ISKRA Ltd, Ivchenko-Progress OKB, Kharkiv Morozov Machine Building Design Bureau, KVANT Research Institute, Kyiv Plant Radar JSC, LUCH KYIV State Design Bureau, LVIV State Plant, Motor Sich JSC, MORYE Feodosya Shipbuilding Company, Ordzhonikidze Sevastopol Marine Plant, Progress Zaporozhye Machine-Building Design Bureau, RADIONIX Ltd, Radioizmeritel Plant, Scientific Research Institute for Aeroelastic Systems, Scientific and Technical Enterprise Electronprylad JSC, State Enterprise Malyshev Plant, Ukroboronprom JSC, Ukrspetsexport JSC, Ukrspetstechnika JSC, YUZHMASH Southern Machine Building Plant Association, VIZAR ZHULIANY Machine Building Plant, and Zorya–Mashproekt  State Enterprise.

The China Aerospace Science & Technology Corp’s (CASC) 3rd Academy’s Beijing Xinghang Electromechanical Equipment Factory (159 Factory) is the final assembly facility for the DF-10A/AKD-20 ground-/ ship-/ air-launched subsonic cruise missile, which grew out of a smuggling operation carried out in Kiev in August 2001 that involved production engineering data packages of a long-range land-attack cruise missile (LACM) called Korshun, which had by 1995 been developed by Ukraine’s Dnipropetrovsk-based Yuzhnoye State Design Bureau, with production tooling being built by the Yuzhnoye Machine-Building Production Association, or Yuzhmash.

The Korshun’s power plant was a redesigned RD95-300 turbofan that bore a strong resemblance to the 36MT engine developed by Russia’s NPO Saturn. This turbofan was subsequently re-engineered by China’s 624 Engine Design Institute, or the China Gas Turbine Establishment (GTE), and its Chengdu Engine Group. Dimensions of the Korshun included a wingspan of 3.1 metres, length of 6.3 metres, diametre of 0.514 metres, and a mass of 1,090kg. Range of the LACM was then claimed to be 600km, carrying a 500kg warhead.

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