Buying, Building, and Stealing
In addition to acquisition and coproduction of the Su-27, China also continued to pursue indigenous development efforts in parallel through the J—10 fighter program, which drew significantly on Israeli-rooted technology and design assistance.124 Defense collaboration between the two countries was in full swing as early as 1984 with arms sales reaching an estimated $3.5 billion in that year alone.125 A great deal of speculation remains regarding the amount and type of technical assistance Israel provided in the development of the J—10, but open source materials clearly indicate that Israel used some expertise gained from developing the U. S.-financed Lavi fourth-generation fighter to assist in the development of the J—10.126 It is difficult to determine whether the design assistance provided by the Israelis on the J—10 rises to the level of codevelopment as articulated in the model. It is likewise difficult to determine from open source materials what, aside from money, China offered Israel in exchange for design assistance on the J—10. One logical possibility is that Beijing shared technical information on the missiles it sold to countries hostile to Israel—Iran being a prime example. Arguments have also circulated that China had access to a Pakistani F-16, parts of which it may have reverse engineered and integrated into the J—10. The J—10 is clearly not a Lavi clone, however. It has significant design differences from the Lavi including its larger size, canard positioning, wing platform, and two-dimensional air intake.127 It was originally designed to use the Israeli Elta EL/M-2035 radar, which can simultaneously track six air targets and lock onto the four most-threatening, but is also able to incorporate Russian and Chinese avionics. Both the original J—10 and the J-10B/AS/AB upgrade variants that came into PLAAF service in 2006 sport specially designed Russian Lyul’ka Saturn AL-31N turbofan engines.128
Israel was China’s second largest source of military aviation technology transfer in the 1990s.129 While this data point is undeniable, some clarification should be added. Russian arms sales to China during the 1990s topped those of all other countries combined; Israel’s stake in the market was trivial by comparison. Nevertheless, it assisted Chinese military aviation in several other areas. In the mid-1990s Israel agreed to sell China its Phalcon Airborne Early Warning and Control (AEW&C) platform and the Harpy unmanned aerial vehicle. At the time, some defense experts rated the Phalcon as the most advanced AEW&C system in the world. This might explain why China approached Israel rather than Russia for access to the technology. With Western arms embargoes still in full force, there was a very short list of states willing and able to sell China advanced military aviation hardware. Israeli Aircraft Industries (IAI) received an initial $319 million deposit from China to secure the Phalcon. News of the deal provoked a strong reaction in Washington, where there was growing concern over Chinese military modernization, particularly as it applied to a potential Taiwan scenario. Chinese military planners understood that in order to prevail in a Taiwan scenario (with U. S. military intervention likely), it was essential to control the airspace over the strait. The first Gulf War confirmed to Beijing the extent of the gap between the PLAAF and its potential U. S. rival. AEW&C was one of a set of capabilities that China needed to develop in order to stand a chance of contesting the U. S. Air Force over the Taiwan Strait. From Israel’s perspective, a supplier – client relationship with a rising power like China was a golden opportunity for its small yet capable indigenous defense industries.
Israel ultimately decided that its relationship with the United States was too important to jeopardize, and in July 2000 it canceled the Phalcon sale and refunded China’s deposit. Beijing was furious when Israel announced it was backing out of the deal. Prime Minister Ehud Barak had promised that China would receive Phalcon technology, leading President Jiang Zemin to make public statements to that effect.130 Jiang lost face over what turned out to be empty promises and a substantial diplomatic rift between the two sides ensued.131
Since the Phalcon deal fell through in 2000, China has pursued its own domestic AEW&C development program, encountering numerous difficulties along the way. In 2006 a prototype aircraft undergoing flight testing crashed in Anhui province, killing 40 people, among them 35 technicians who were intimately involved with the project.132 China has since succeeded in producing several types of AEW&C aircraft: the KJ-200, based on the Soviet Yak-8 transport, and the KJ-2000, based on the Russian A-50 MAINSTAY airframe.133 The PLAAF has taken possession of, and is presumably operating, at least four KJ-2000s.134 Little is known about the exact capabilities of these aircraft, though there is speculation that they are similar in design, though technically inferior, to the Phalcon.135 The degree to which China’s AEW&C aircraft were developed domestically remains an open question. Despite the fact that Israel cancelled its sale of the Phalcon, it is not implausible that it might have provided China design and technical assistance after the fact.
Israel’s reversal on the Phalcon damaged its military aviation technology transfer relationship with China (and also affected overall bilateral relations), but the Harpy fiasco in 2004 was the knock-out punch. Designed to “detect, attack, and destroy radar emitters with a very high hit accuracy"’ the Harpy is an unmanned aerial vehicle (UAV) with all-weather capability.136 Its range, the fact that it is launched from a ground vehicle outside the immediate battlespace, and its ability to neutralize SAM and radar sites for long periods of time made the Harpy a sought – after item for Chinese military planners looking out over the Taiwan Strait. The Harpy deal was negotiated in the mid-1990s, with China having taken possession of around one hundred of the UAVs by 1999.137 The deal was reported to the United States at the time it was negotiated and although there were objections, Washington did not pressure Israel to cancel it. Because the Harpy was a system wholly designed and produced by Israel there was no basis to block the sale on the grounds of illicit technology transfer. It was only when China sent its Harpy inventory back to Israel for service and repair in 2004 that the United States objected. The Bush administration claimed that the true purpose was to upgrade the systems with new sensors that could detect radar emitters even when they are not actively transmitting a signal.138 Taiwan was reportedly already in possession of the new, upgraded Harpy.139
Concerned about the threat the Harpy posed in the case of a Taiwan scenario, the United States demanded that Israel not return the drones that China had already purchased and thus legally owned. What finally happened to China’s Harpy aircraft remains unclear (at least in open source material).140 Israel did refund China a considerable sum of money related to the UAV upgrade indicating that some part of the work was not completed, though whether this included technical upgrades (as Washington claimed) or routine maintenance is still unknown.141 There is also the possibility that Israel confiscated Harpy components and paid China off in order to mitigate political fall-out over the incident. Whatever the case, the Harpy episode marked the last significant military aviation transfer between Beijing and Jerusalem. It also had negative repercussions for U. S.-Israeli relations: Amos Yaron, Director General of Israel’s Ministry of Defense, resigned after the incident.
Ukraine also emerged as a source of advanced military aviation technology during this period. It has not played as prominent a role in equipping the PLAAF as has Russia, but Ukraine has served as an important conduit for Russian military hardware that China has been unable to procure directly. In 2000-2001, the Ukrainian firm Progress reportedly supplied both Iran and China with Soviet Kh-55 cruise missiles, which have an active range of 3,000 kilometers and can be armed with both nuclear and conventional war – heads.142 The highly accurate guidance system used in the Kh-55 was more advanced than anything China was producing indigenously at the time, and expanded the capability of its aged bomber fleet (the Kh-55 is an air-to-sur – face missile fired solely from bomber platforms). Around this time China also gained access to a single Su-33 (air frame T-10K-7) prototype from Ukraine.143 China has used this aircraft as a template for its J-15 naval fighter, which is reported to have made a successful test flight in August 2009.144
From 1989 to 2004, China actively pursued acquisition of advanced aircraft and aviation technology from Russia, Ukraine, and Israel; used a combination of coproduction and reverse engineering to make advances in subsystem design and manufacturing; and came up with innovations in its own capacity to build fighter aircraft at least partially based on indigenous design. China also appears to have greatly expanded its efforts to steal restricted technologies by way of industrial espionage using both traditional and computer network intrusion techniques. While there are few documented examples citing fighter aircraft technology, there are a number of cases where China obtained, or attempted to obtain, restricted dual-use technologies from the United States using surreptitious means. By 1993 approximately 50 percent of the 900 technology transfer cases handled by U. S. federal law enforcement agencies involved the Chinese.145 Cases of cyber espionage that track back to China provide more detail about the types of military aviation-related technical data attackers are after. It should be noted that the relative anonymity afforded cyber attackers often leads to problems of attribution. Forensic investigators can trace the origin of a certain exploit back to a computer server in China, for example, but the attacker might be using Chinese commercial networks, which are notoriously porous, as an intermediary point. We therefore only cite examples where evidence exists linking the source of espionage attempts to China, and suggests the involvement of the military or intelligence organizations.
Although the intrusions did not target fighter technology, the 2004 attacks on a number of computer networks belonging to the U. S. military and defense contractors that came to be known as Titan Rain were definitively traced back to a location in Guangdong Province by a computer specialist working at Sandia National Laboratories in New Mexico. The specialist, a former U. S. military intelligence officer, surreptitiously monitored the activities of the attackers after the Sandia networks he was responsible for safeguarding were attacked. He discovered an operation that involved 20 or more individuals connecting through three separate end nodes in Guangdong. While this is not hard proof of a Chinese military or intelligence operation, the sort of data being targeted suggests a military end user. The attackers reportedly breached the systems of the Redstone Arsenal, home of Army Aviation and Missile command, and stole technical data for the mission planning system used by U. S. Army helicopters, as well the Falconview 3.2 flight planning software used by both the U. S. Army and Air Force.146
Chinese cyber espionage operations aimed at extracting sensitive technical data began in the period under consideration (1989-2004), and expanded rapidly in terms of both volume and sophistication since. In a 2009 case, computer networks belonging to at least one defense contractor working on the F-35 Joint Strike Fighter program were reportedly compromised, giving intruders access to Pentagon computer systems that contained sensitive, though not classified, data on the J-35’s design, performance, and electronics systems. There is not as much evidence linking this exploit to Chinese attackers, but U. S. officials interviewed about the breach reported that it had been traced to China and bore the hallmark of a state-sponsored operation.147 In this particular case, the stolen information could not be used to reverse engineer F-35 systems, but could have been helpful in learning how to better defend against them.
This chapter has examined the evolution of China’s military aviation industry over the decades and discussed the various procurement strategies it has used at different points in time. The approach has been based on four main variables: (1) the state of China’s domestic economy, in particular the state of its technological and industrial base; (2) the technological capacity of China’s military aviation sector; (3) the willingness of foreign countries to sell China advanced military aircraft, key components, armaments, and related production technology; and (4) China’s bargaining power vis-a-vis potential sellers of military aircraft and aviation technology. Between 1989 and 2004 China was able to diversify avenues of aviation technology procurement. Expansion occurred as a result of favorable developments across each of the four main variables. China’s civilian technology base grew as a result of trade and foreign investment, generating access to dual-use technologies which the military aviation sector leveraged to improve design and production capacity. Rapprochement with Russia once again gave China access to advanced military hardware that was blocked by Western embargoes post-Tiananmen. Moreover, China’s newfound economic clout afforded it a much stronger negotiating position with a Russian state that faced myriad economic difficulties after the Soviet collapse. Defense cooperation with Israel, though ultimately problematic, provided China a window of access to technical knowledge and design expertise which moved its aviation industry forward. Engagement with the outside world resulted in an increased Chinese presence abroad, providing avenues to restricted military technologies via espionage. Finally, cyber espionage emerged in the later part of this time period as a new vector for the extraction of data related to restricted military aviation technologies.
Looking Forward: Chinese Military Aviation Technology Procurement (2004-Present)
Table 12-7. Looking Forward: Chinese Military Aviation Technology Procurement (2004-Present)
China’s overall economic development continues to progress rapidly, both in terms of growth and technological sophistication. Investment by developed countries, imports of sophisticated production technology, and indigenous production have created an advanced-Chinese economy that approaches world-class standards in many areas. Chinese companies do not necessarily have full knowledge of all the advanced technologies embodied in equipment operated on Chinese territory, but the situation has changed fundamentally. The government’s focus on developing indigenous innovation with Chinese characteristics (zizhu chuangxin, emphasizes the importance of for
eign technology and knowledge in moving China’s overall level of industrial and scientific development forward. The most recent iteration of the Medium – and Long-Term Science and Technology Development Plan (MLP), released in 2006, outlines a path to “promote original innovations by reassembling existing technologies in different ways to produce new breakthroughs and absorb and upgrade foreign technologies.”148 The idea at the core of this approach is to assimilate and absorb preexisting foreign technologies and in the process of merging them with domestic technologies, realize new breakthroughs and improvements.149 The decision of many advanced Western companies to locate technology R&D labs in China has led to an improvement of China’s technology knowledge base which has in turn enabled overall economic progress.
This economic progress has benefited the Chinese defense industry in general and the military aviation industry in particular. Globalization has increased China’s access to technologies originally developed by the West for military applications, and then applied widely for civilian purposes. This allows China to benefit from a “spin-off, spin-on” dynamic to apply these technologies to its defense industries. Advances in information technology (IT) and communications technology are providing new design tools and the basis for improved avionics systems that can be applied to Chinese fighters. Key companies in this sector such as Huawei and Julong were founded by ex-PLA officers and are closely tied to the Chinese defense industry.150 China has been involved in commercial j oint ventures with Western aviation companies since the 1980s, producing subassemblies and parts for civilian aircraft and has continued to expand its role in the global aviation supply and production chain. However, unlike the IT sector, there have been relatively few opportunities for Chinese civil/military aviation integration and technology sharing.151 This is partly due to the limited applicability of civilian aviation technologies for military use. Compartmentalization also prevents useful transfers of personnel, knowledge of production practices, and materials. Commercial and military aviation projects are conducted by different enterprises on different production lines with apparently little or no interaction on areas that might be of common interest.152 There are a few isolated cases where technologies and process improvements derived from civilian production may spill over to the military side, but this is not an institutional feature of the Chinese aviation industry.153 Despite these inefficiencies and continuing problems, the Chinese military aviation industry’s ability to “build” a more sophisticated PLAAF has advanced significantly.
China’s potential to continue to “build” its way to a more sophisticated air force in the future depends on the degree to which it will be able to meet its indigenous innovation objectives, which continue to depend on access to advanced foreign technologies. Examples of true indigenous innovation are still few and far between. Even with the benefit of “follower’s advantage” Chinese military aviation is still unable to copy some subsystems at a level equivalent to those of the original. Continuing limitations are most apparent in the industry’s inability to design a turbofan engine that meets the requirements of its fleet of indigenously produced advanced fighters. In April 2009, the head of Aviation Industries of China (AVIC), Mr. Lin Zuoming, admitted that the WS – 10A (China’s most advanced turbofan at the time) was still “unsatisfactory in its quality” and that engine production for military aircraft has been a “chronic illness” in China’s defense industry.154 AVIC is investing $1.5 billion into jet engine research and development to try to overcome persistent problems with quality control and reliability.155
Flight tests of the new J-20 stealth fighter may reveal whether China has overcome this hurdle. Chinese news sources reported after the initial test flight that two J-20 prototypes had been produced, one with a Russian engine and the other with an indigenously produced engine. It is not clear which engine is coupled with which prototype. Photographic analysis reveals that the exhaust nozzles of one prototype are “jointed in a way that implies thrust vectoring capability”156 China has been using the thrust-vectored Russian AL-31FN-M1 in its two-seat J-10 AS/BS fighters since 2006.157 This is most likely the engine in one of the J-20 prototypes, although there is speculation that the production model will be powered by thrust-vectored WS – 10G turbofans, manufactured by the Shenyang Liming Aircraft Engine Company.158 If Chinese media reports are accurate and one prototype sports a non-thrust vector capable indigenous engine (probably, based on past instances where Russian and Chinese engines were simultaneously tested in the same model aircraft), this engine is likely some version of the WS-10.159
The unveiling of the J-20 is the most significant recent event for Chinese military aviation. The J-20 prototype’s maiden flight coincided with U. S. Defense Secretary Robert Gates’ January 2011 visit to China. Learning of the successful test flight, Gates commented, “They may be somewhat further ahead in the development of that aircraft than our intelligence had earlier predicted.” The J-20 reportedly made a second round of successful test flights on April 17, 2011, to commemorate the sixtieth anniversary of the PLAAF.160 Most recently, Chinese military bloggers posted photos of the J-20 making what appears to be a third and fourth set of test flights.161 The fighter is expected to enter into service with the PLAAF between 2018 and 2020. While the development of J-20 prototypes is a significant achievement for Chinese military aviation, the flight tests provide no insight into whether the industry is any closer to overcoming its engine impediment or whether it has mastered critical challenges in avionics and radar. J-20 test pilot Xu Yongling made statements to the Chinese media touting technological breakthroughs embodied in the fighter, including supersonic cruise capability.162 Publicly available data on the test flights does not provide enough evidence to support Xu’s assertion. About the only thing that can be determined from them is that China can produce a few prototypes of an aircraft that appears to incorporate some stealth technology and that one of these prototypes can be flown for a short period of time without crashing. Interpreting the appearance of the J-20 as proof that China is right on the heels of U. S. military aviation capability is a misinterpretation of the known facts. Russian and Western military aviation experts maintain that the PLAAF is still 15 to 20 years behind the most advanced air forces in terms of equipment.163