The emerging multi-polar global order requires countries to alter their geopolitical strategies, in particular, become more self-sufficient on defence needs. India being the world’s largest importer of defence equipment (outside of war-torn Ukraine) has rightfully embarked on an indigenisation path. The challenge is that much more accentuated given modern warfare requires cutting edge capabilities in many domains. There is precedence of a successful transformation in China.
“Two decades ago, China imported more arms than any other country…China used to rely on the likes of Russia and France for warplanes, aviation engines and air-defense systems, and even struck deals to buy military hardware from the U.S. in the 1980s, including radar systems and artillery technology.
But China’s share of global arms imports has fallen significantly and the Asian power has dropped out of the world’s top 10 buyers in recent years, according to Sipri data. Analysts say China can now produce most of the military technologies it needs, even if it continues using some foreign hardware for cost or quality reasons.”
The transformation into a competitive military power is underpinned by its growing clout as a defence exporter now:
“Beijing is now the world’s fourth-largest arms exporter, trailing only the U.S., France and Russia, according to Sipri data. Chinese hypersonic missiles, which can travel at least five times the speed of sound and evade most air defenses, exceed Western capabilities.”
So how did the Chinese do it?
“China has also closed some technological gaps through espionage and illegally reverse-engineering imported gear, Western officials and analysts say. U.S. officials have disclosed what they describe as Chinese cyberattacks aimed at stealing U.S. secrets in aerospace, maritime and other technologies.
…In the 1990s, China bought Russian Sukhoi-27 fighters and reverse-engineered them to make its own version: the J-11s. Rostec, a Russian state-owned defense conglomerate, later accused China of illegally copying Russian military hardware, including Sukhoi planes.
…In 2016, a Chinese aviation executive pleaded guilty in the U.S. to conspiring to hack and steal data from American defense contractors, including information on the C-17 transporter as well as the F-22 and F-35 stealth fighters.”
But more strategically, “It reflects Beijing’s efforts to boost scientific research, restructure its state-run arms industry and tap private businesses for defense needs.
…Beijing also reorganized its defense industry, which was dominated by state giants that had struggled with inefficiency and corruption while resisting government efforts to foster collaboration with civilian partners.
Aero Engine—which is also known as AECC, and was sanctioned by the U.S. in 2020 and 2021—was created by pooling top scientists and resources from dozens of aerospace companies and research institutes. Beijing infused the new conglomerate with billions of dollars to compete against the likes of General Electric and Pratt & Whitney.
….Mastering jet engines was one of the biggest challenges. A top Chinese military test pilot told a Chinese newspaper in 2016 that domestically made engines struggled with insufficient thrust, high fuel consumption rates and poor reliability.
AECC boosted research collaboration with Chinese universities and said it tapped new technologies, including artificial intelligence, to speed up engine design and testing. State media portrayed AECC engineers as inspirational figures helping China break a Western technological monopoly.
…The efforts have started to pay off. Newer variants of Chinese jet fighters originally designed with Russian engines—including so-called “fourth generation” fighters like the J-10 and J-11—have been fitted with engines developed and produced by Chinese entities that were brought under AECC.”
Following the Indo-Pak skirmish earlier this year, where Pakistan’s Chinese made jets claimed to have downed India’s French made Rafale, public opinion that Chinese military technology is catching up with the West’s is growing. And its not just fighter planes but also warships:
“From 2015 to 2024, China’s navy launched 152 ships while the U.S. launched 70… The Chinese fleet is now the world’s largest by number of vessels… Beijing’s third and newest aircraft carrier, the Fujian, is the first to be fully designed and built in China, and features electromagnetic catapults for launching aircraft.”
If you want to read our other published material, please visit https://marcellus.in/blog/
Note: The above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. The information provided is intended for educational purposes only. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India (SEBI) and is also an FME (Non-Retail) with the International Financial Services Centres Authority (IFSCA) as a provider of Portfolio Management Services. Additionally, Marcellus is also registered with US Securities and Exchange Commission (“US SEC”) as an Investment Advisor.
