Asian defence firms reach out for foreign investment

Society Military and Strategic Issues
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POETIC LICENCE: Kaleem Omar
http://www.dailytimes.com.pk/default.asp?page=story_21-5-2003_pg3_7
China with its booming economy and soaring exports, is awash with foreign exchange and is thus a ready customer for the latest Russian weapons systems

With their dreams of building world-class defence industries shattered by the 1997 East Asian economic crisis, many countries in that region are restructuring their defence firms and opening them to foreign investment to build equity and market links with Western nations, says a report in the American weekly military journal Defence News.

“Only Japan and China continue to resist change,” says the report, implying that it would be in Japan’s and China’s own interest to also build links in the defence sector with Western firms. But Beijing and Tokyo may see things differently, preferring to plough their own furrow, as it were, and not become dependent on the West for defence technology.

However, China has concluded several major defence deals with Russia in recent years. One such deal is a $ 1.4 billion contract signed in July 2000 for a Chinese aircraft manufacturer — the Shenyang Aircraft Making Factory, in Shenyang, Liaoning province — to assemble Russian Su-27SK jet fighters for the Chinese air force. But the contract bans the Chinese from exporting any of the jets.

Under a deal signed in 2001 Russia is supplying high-tech torpedoes to the Chinese navy. Using a revolutionary new “super-cavitation” technology, the torpedoes can travel underwater at 300 miles an hour and can be equipped with nuclear warheads. American military experts say the US navy has nothing in its arsenal to defend its ships against these torpedoes.

According to some American military analysts, the super-cavitation torpedoes could “alter the global balance of power” since only half-a-dozen such torpedoes armed with nuclear warheads could take out a whole US aircraft carrier battle group. Russia has reportedly supplied more than 50 of the new torpedoes to China, with an undisclosed additional number to be supplied over the next two years.

Given Russia’s economic woes, its own navy is strapped for cash and not in a position to acquire the new torpedoes. China, on the other hand, with its booming economy and soaring exports, is awash with foreign exchange and is thus a ready customer for the latest Russian weapons systems, including “Sunburst” missiles, which Russia is only too happy to sell to China to earn much needed hard currency.

Japan’s defence firms have a big in-country market for their products. Twenty Japanese firms accounted for 75 per cent of the Japan Defence Agency (JDA) procurement in 1999, totalling some $ 11.9 billion, according to a JDA report. The 1999 figure was up slightly from the $ 11.7 billion in JDA contracts awarded for the same period in the previous budget year. The reporting period covers contracts awarded from April of a given year through to March of the following year.

Mitsubishi Heavy Industries Ltd., Tokyo, remained Japan’s biggest defence supplier in 1999, being awarded 279.7 billion yen in 208 new contracts, accounting for 22.1 per cent of the total JDA procurement. Items procured from Mitsubishi Heavy Industries in 1999 included 17 Type-90 main battle tanks worth 13.4 billion yen, and eight F-2 support fighters worth 77.9 billion yen.

Kawasaki Heavy Industries, which is also based in Tokyo, took the No. 2 spot on JDA’s list of top 20 contractors, winning 97 new contracts worth 132.2 billion yen. Among the company’s major items were one 2,700-ton diesel submarine priced at 29.9 billion yen, 10 T-4 intermediate jet trainers worth 20.7 billion yen, and three new OH-1 reconnaissance helicopters for the army with a price tag of 5.2 billion yen.

Unlike Japanese firms, defence firms in other East Asian countries cannot do enough business domestically. “So they have to cooperate with foreign companies,” Juang Gwo-chang, secretary-general of the Taiwan Aerospace Industry Association, was quoted as saying. “The focus now is on survival,” he said.

Many Asian defence firms are seeking foreign investment and technology that would allow them to engage in more commercial aerospace work and limit reliance on defence, says the Defence News report. It says reduced defence budgets in many cases, and increased interest in buying foreign defence products in others, are leading to sweeping changes in many Asian nations.

That contrasts sharply with the environment in the 1980s and early 1990s, when South Korean officials sought to make their defence industry the eighth largest in the world, and Indonesia envisaged its aerospace industry becoming world-class, producing not just military aircraft but also passenger aircraft and regional jets, says the Defence News report.

Today, defence firms in South Korea, Malaysia, Indonesia and Taiwan are looking for equity partners that can give them access to foreign capital, technology and markets.

The process of finding a foreign partner is furthest along in South Korea, where the lure of achieving an inside track on the country’s planned purchase of attack helicopters and fighter aircraft acts as a strong impetus for interest in the newly formed Korean Aerospace Industries, Seoul, according to the Defence News report.

The report says the South Korean company selected Seattle-based Boeing Co. and BAE Systems, Farnborough, England, as the team of preferred bidders for the company. They are discussing a 35 per cent stake in return for an investment of about $ 170 million, South Korean and US defence industry sources were quoted as saying.

Meanwhile, Taiwan’s Aerospace Industrial Development Corp. (AIDC), Taichung, has been seeking investment from foreign countries but is severely handicapped by its own falling sales. Unlike South Korea, there are no major upcoming national programmes in Taiwan to entice foreign investment.

AIDC officials say they anticipate that the company’s sales have fallen from $ 1 billion annually in the late 1990s to $ 600 million in 2003. The downturn in sales reflects the premature cancellation of the Indigenous Fighter programme. Rather than the planned purchase of 250 fighters from AIDC, the Taiwanese military acquired only 130, the last of which was delivered in December 1999. That means the company has far more capacity than it now needs, according to company officials.

While there has been some interest from European firms, AIDC officials say they are particularly keen on getting at least a small investment from an American company. That lack of interest, especially from US companies, meant that AIDC could not meet its earlier goal of acquiring private investment by 2000. AIDC officials now hope the process can be completed by December 2003.

In China, meanwhile, pressure on the defence industry is growing. Chinese officials say it is critical that the Chinese defence industry does more to produce the high-technology equipment the People’s Liberation Army needs.

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** Under a deal signed in 2001 Russia is supplying high-tech torpedoes to the Chinese navy. Using a revolutionary new “super-cavitation” technology, the torpedoes can travel underwater at 300 miles an hour and can be equipped with nuclear warheads. American military experts say the US navy has nothing in its arsenal to defend its ships against these torpedoes.

According to some American military analysts, the super-cavitation torpedoes could “alter the global balance of power” since only half-a-dozen such torpedoes armed with nuclear warheads could take out a whole US aircraft carrier battle group. Russia has reportedly supplied more than 50 of the new torpedoes to China, with an undisclosed additional number to be supplied over the next two years. **

I remember reading about super-cavitation torpedoes few years ago. In those days an American with a GPS and few other electronics gadgets was arrested in Russia and was accused of spying. The rumor was he was trying to get more details about super-cavitation torpedoes for US. There were reports that US is trying to get its hands on this toy by hook or by crook.

I saw a video clip of this torpedeo the way it works is quite interesting. It creats an air bubble in front of it and travels through that air bubble. Since it is travelling through air and not water there is less drag and it propels at very high speed.

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What are the chances that a ‘few’ of these are in Pakistani hands? Could this be the reason for the Pakistani nonchalance towards the Indians as they waste their money on upgrading their naval force beyond the normal deterrence factor?

http://www.newsmax.com/archives/articles/2001/4/23/220813.shtml

Russian ‘Rocket’ Torpedo Arms Chinese Subs

Russia has developed new submarine-launched torpedos that travel at incredible speeds – perhaps as fast as the speed of sound underwater.
Scientific American reports in its May edition that these supersophisticated weapons have been linked to the sinking of the Russian submarine Kursk last August, and even to the arrest and imprisonment of Edmond Pope.

Pope, an American businessman, was charged by Russian authorities with spying, specifically that he had sought to buy plans for the “ultrahigh-speed torpedo.”

The magazine reports that “evidence does suggest that both incidents revolved around an amazing and little-reported technology that allows naval weapons and vessels to travel submerged at hundreds of miles per hour – in some cases, faster than the speed of sound in water. The swiftest traditional undersea technologies, in contrast, are limited to a maximum of about 80 mph.”

The new technology that allows for these incredible speeds is “is based on the physical phenomenon of supercavitation.”

According to Scientific American, the new generation of torpedos, some believed capabale of carrying nuclear warheads, are surrounded by a “renewable envelope of gas so that the liquid wets very little of the body’s surface, thereby drastically reducing the viscous drag” on the torpedo.

The new technology “could mean a quantum leap in naval warfare that is analogous in some ways to the move from prop planes to jets or even to rockets and missiles.”

In 1997 Russia announced that it had developed a high-speed unguided underwater torpedo, which has no equivalent in the West.

Code-named the Shkval or “Squall,” the Russian torpedo reportedly travels so fast that no U.S. defense can stop it.

In late 2000, after the sinking of the Russian submarine Kursk, new reports began circulating that the Chinese navy had bought the Shkval torpedo.

The modern Russian weapon in Chinese navy hands has sent alarm bells ringing through the halls of the Pentagon.

“China purchased the Shkval rocket torpedo,” stated Richard Fisher, a defense analyst and senior fellow at the Jamestown Foundation.

“The Shkval was designed to give Soviet subs with less capable sonar the ability to kill U.S. submarines before U.S. wire-guided anti-sub torpedoes could reach their target. The Chinese navy would certainly want to have this kind of advantage over U.S. subs in the future. At the speed that it travels, the Shkval could literally punch a hole in most U.S. ships, with little need for an explosive warhead.”

“This torpedo travels at a speed of 200 knots, or five to six times the speed of a normal torpedo, and is especially suited for attacking large ships such as aircraft carriers,” stated Fisher.

The report that China purchased some 40 Shkval torpedoes from Russia in 1998 has been confirmed by U.S. intelligence sources. Pentagon officials also confirmed that a Chinese naval officer was on board the ill-fated Russian submarine Kursk to observe firings of the Shkval.

The Shkval rocket first came to light in the Western press in April 2000 when Russian FSB security services charged American businessman Edward Pope with spying for the U.S. According to Russian intelligence sources, Pope obtained detailed information on the rocket-powered torpedo.

A FSB statement said it confiscated “technical drawings of various equipment, recordings of his conversations with Russian citizens relating to their work in the Russian defense industry, and receipts for American dollars received by them.”

The 6,000-pound Shkval rocket torpedo has a range of about 7,500 yards and can fly through the water at more than 230 miles an hour. The solid-rocket-propelled “torpedo” achieves this high speed by producing a high-pressure stream of bubbles from its nose and skin, which coats the weapon in a thin layer of gas. The Shkval flies underwater inside a giant “envelope” of gas bubbles in a process called “supercavitation.”

The Russian Pacific Fleet held the first tests of the Shkval torpedo in the spring of 1998. In early 1999, Russia began marketing a conventionally armed version of the Shkval high-speed underwater rocket at the IDEX 99 exhibition in Abu Dhabi.

The Shkval is so fast that it is guided by an autopilot rather than by a homing head as on most torpedoes. The original Shkval was designed to carry a tactical nuclear warhead detonated by a simple timer clock. However, the Russians recently began advertising a homing version, which runs out at very high speed, then slows to search for its target.

There are no evident countermeasures to the Shkval and, according to weapons experts, its deployment by Russian and Chinese naval forces has placed the U.S. Navy at a considerable disadvantage.

“We have no equivalent, its velocity would make evasive action exceedingly difficult, and it is likely that we have no defense against it,” stated Jack Spencer, a defense analyst at the Heritage Foundation.

According to the Jamestown Foundation’s Richard Fisher, China is acquiring a fleet of blue-water submarines armed with the deadly Shkval. In a recent defense report, Fisher noted the Chinese navy is arming itself with a deadly combination of silent submarines, supersonic nuclear tipped Stealth missiles and Shkval rocket torpedoes. Fisher warned that the new Chinese navy is capable of operating far from Asian shores.

“There are reports that the Chinese navy’s current subs do not have tubes large enough to fire the Shkval. The Chinese navy has completed the acquisition of four Russian Kilo-class conventional submarines. The Kilo 636 is said to be nearly as quiet as the early version of the U.S. Los Angeles class nuclear submarine,” noted Fisher.

“This very high speed torpedo would provide the PLA with the technology to build their own version, and this is a looming threat,” stated Fisher.

“The next few years may also see China produce a new class of nuclear-powered submarine, the Type 093. Again benefiting from Russian technology.”

The Chinese Type 093-class nuclear attack submarines are similar to Russian Victor III class first produced at the Leningrad yards in the 1970s. Each Chinese Type 093 weighs more than 5,000 tons and is over a football field in length. The Chinese type 093 submarines are armed with eight 21-inch torpedo tubes that are large enough to fire the super-fast Shkval.

“The Type 093 is projected by the U.S. Office of Naval Intelligence to have a performance similar to the Russian Victor-III nuclear attack submarine. By one estimate, four to six Type 093s should enter service by 2012,” concluded Fisher.

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I wish Pakistan had these torpedos... India wouldnt stand a chance.
Cant afford them unfortunately.:(

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2bornot2b, considering the past armament deals between China and Pakistan the prospects for such a sale are very low . All the previous equipment sold by China to Pakistan has not been China's top-of-the-line armament . For example, the HQ-2 system handling Pakistan's airdefense needs is a really old Airdefense system which has been passed over from China to Pakistan . China has produced many other Airdefense systems, including improved versions of the HQ-2 system itself, but the version under Pakistan's control are the older versions . The Shkval torpedo system is very much a top-of-the-line equipment . And that too not just for China, but for pretty much the rest of the world . So, I base my doubts on this factor .

Another problem which China faces in-order to export such a fantastically destructive weapon platform is that it will come under strict US scrutiny . This is because, unlike other weapons which Pakistan has bought from China and CAN be used against India or at best against other neighnoring countries, the Shkval will enable to Pakistan to target even the naval assets of the USN deployed/going-through the Arabian Sea . US will definitely be touchy about such sales .

Also, China ( according to the reports mentioned in this thread ) will primarily use this weapon as a deterrent to stop the US Navy from entering the Taiwan strait if the situation gets out of control and escalation occurs . In such a case, considering the vast number of American destroyers and other naval ships, China is going to need each and every single Shkval which it has acquired from Russia . According to the reports, 40 such torpedoes have been purchased and each and every single one of them will be precious for China in the case of any conflict, leaving little room for sparing them for any other country .

If you do manage do get a few of these Shkvals, what are you going to use to fire them ? Check out the article which you posted . China has Type 93 Nuclear Submarines, which have the special 21mm diameter tubes required to fire the torpedo . From where do you think the nuclear submarine will come from ?

And Finally, if you do manage to get a few Shkvals and a few nuclear submarines :) ] , then out of the 40 which Chinese have , how many do you think get . In other words, what is your estimate of a few . If it means 5 or 6 , the Indian navy has many many naval assets to throw at the PN and to exhaust this threat before continuing with further operations .

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Pakpatriot, this issue has less to do with affordability but more with the politics of such a sale .