From the Russians' point of view, the destroyers are part of an increasingly close high-technology connection with China, which has the hard cash Russia needs so badly. Other examples include purchases of Su-27 attack aircraft, at least one fighter upgrade package, and Kilo-class diesel submarines (with their wake-following and wire-guided torpedoes). The Chinese also want to buy Russian cruise-missile technology, not least to provide a credible threat to Taiwan. The December arms deal includes unspecified "advanced" missiles and a license-production agreement.
The Russians presumably hope that the Chinese will come to standardize on their equipment, and thus become the saviors of their large and economically vital arms industry, whose domestic market is dying. According to recent reports, last year the Russian Air Force managed to buy only six aircraft. This year may be even worse. Not long ago, the annual purchase was several hundred.
Much may hinge on the technicalities of modern command and control. Until the Russian sale, the most sophisticated Chinese warships were apparently equipped with locally-made unlicensed derivatives of the French Tavitac system, which is related to other Western systems, and ultimately to the U.S. Naval Tactical Data System (NTDS). Its digital data link, Link W, is an unlicensed version of Link 11. The two new Russian destroyers also have computer combat direction systems, versions of the Russian "second captain," but those systems apparently have little in common with their Western equivalents. Nor does it appear that the data links integrated with the Russian systems have anything in common with Link II or with Link W; Western and Russian concepts of ship and fleet operation are quite different.
It appears that the Russian links were designed so that data could be fed up the line to a flagship or shore authority, instructions being fed back (it seems likely that the higher authority could actually control a subordinate unit via the link). In the West, the point of data links is to distribute a common tactical picture, so that local commanders can make effective decisions. The link does carry instructions, but that is a secondary consideration.
The Russians may quite justifiably suspect that combining Western and Russian systems is difficult at best. The obvious solution for a wealthy country (and they must hope that the streets of Beijing are paved with gold) would be to junk its nascent Western systems in favor of buying Russian equipment more or less exclusively—otherwise existing ships cannot coordinate effectively with the new ones. Much the same is presumably true of existing shore command centers. At the very least, the Russians probably hope that the Chinese will find it necessary to junk their existing combat direction systems in favor of Russian ones.
Most Chinese ships and submarines lack any sort of computer-driven combat direction system. For surface ships, that means impotence, no matter how recently they may have been built. The problem is universal: the British cannot send their new Type 23 frigates into any sort of dangerous situation until their new Surface Ship Combat Systems and the requisite software have been installed (the software is only now being certified). Since installation of a combat direction system requires enclosed space many existing ships lack, the Chinese might well be justified in scrapping most of their frigates and destroyers in favor of more modern units. That would be to admit current deficiencies despite the appearance of considerable investment, a choice that cannot appeal to Beijing.
As always, wishes may not quite be fulfilled. For many years the Chinese government has been happy to buy only limited numbers of Western weapons before trying to copy them. For example, examination of photographs of Chinese frigates and destroyers reveals a bewildering variety of electronic countermeasures systems, many of them clearly either Western types or copies. The only types appearing in substantial numbers seem to be derivatives of old Russian equipment supplied (at least in prototype form) before the Chinese formally split from the Russians about 1958-59. The Chinese already have access to Western computer technology probably superior to standard Russian types; the great question for them may well be whether they can capture enough of the tested Russian computer code to try to implement it on their Western-style machines.
There must also be a question as to how badly the Chinese government wants real, integrated, capability as compared to apparent capability measured in numbers of ships or aircraft. If real capability requires the sacrifice of the current numerically impressive force, then Beijing must accept that as the price of recapitalization. They themselves may not be sophisticated enough to appreciate the choice, particularly if they hope to gain what they want mainly by bluffing other unsophisticated governments. After all, words like "data link" cause most eyes the world over to glaze.
The larger question—and one that affects most Western calculations—is just how much cash the Chinese government really has. It is not nearly enough to say that the Chinese economy is enormous and that it is growing very rapidly. If the central government cannot profit from all that growth, then all the fears of a massive Chinese military machine begin to recede. So do the hopes of the Russian military production sector.
There is some reason to be skeptical. Certainly it appears that local party organizations and the Chinese military are quite efficient cash collectors. Unfortunately, that cash is for the personal benefit of the collectors or their superiors, not for the national treasury. The government's ability to crush this sort of corruption is limited, because it depends very largely on the corrupted individuals to maintain its power, particularly after it lost so much of its legitimacy during past crack downs. There is some anecdotal evidence of governmental poverty, such as the practice of paying for food in the countryside with scrip, and difficulties in keeping some individuals in low-paying government jobs (they tend to escape to the private-sector economy).
On a larger scale, the Chinese government ultimately is faced with a difficult dilemma. If it continues to tolerate free enterprise, then it is permitting the growth of interest groups with little interest in maintaining its own power. It can gain their support only as the guarantor of stability, but it cannot then afford to levy taxes that they will see as extortion. Its earlier claim to legitimacy as the sole source of economic/political wisdom was surrendered when Deng Hsiao-Ping made capitalism and getting rich legitimate.
The alternative is worse, if anything. After Deng dies, the government can announce that free enterprise was a mistake, a perversion of the glories of the old ideology. It may well consider retaining (or regaining) full power far better than being rich. In that case, however, it will sacrifice substantial economic strength. The post-Deng government may well consider that a reasonable trade-off, and it may bet that its security forces can contain any dissatisfaction. To a historian, Deng's period of economic liberalism may resemble Lenin's New Economic Program—which was liquidated quite effectively by Stalin.
The Chinese situation is a bit more complex because the strength of the economy itself (often as a market for the West) is a useful instrument of foreign coercion. Again and again, the Chinese government has managed to prevent Western governments from selling arms to Taiwan—particularly submarines—by threatening to cut them off from future civilian deals. Even when the deals did not materialize (as in the case of the Netherlands), the threat seems to have been effective. In the case of the United States, fear of trade losses seems to have deterred at least the present administration from pressing China on a wide variety of issues. Thus it might be argued that a collapse of the Chinese export economy from suppression of the free enterprise sector might well destroy an important weapon. Whether a Chinese Communist Party facing ruin from free enterprise would see matters this way is, of course, another question.
That brings us back to the Russians. China may not be rich enough to be the savior of the Russian arms industry, at least not the sole savior. The Russians must seek the widest possible variety of customers. Their great advantage, with the end of the Cold War, is that they no longer particularly care about the ideology or the policy of the buyers, only that they have sufficient cash in hand. Indeed, some Russians are beginning to ask whether it is wise to arm a hereditary enemy such as China, particularly when the loss of national power makes the wealth of Siberia (which the Chinese claim was taken from then under unequal treaties in the 17th and 18th centuries) seem almost ripe for plucking.
As a very striking case in point, Russia is selling the Greek Cypriot government the very powerful SA-10 missile, broadly comparable to the U.S. Patriot. It will be used to protect a naval base and an airfield being built on Cyprus by the Greek government. Turkey has said that this program means war. If the airfield is built (and if its protection works), then the Greek Air Force will be able to operate unmolested on the island. Once a war between the Greek and Turkish parts of the island begins, Turkey may no longer be able to intervene. For example, the Turkish Navy currently lacks any sort of area air defense, so Greek aircraft might well be able to prevent resupply by sea. The UN truce team has managed to delay completion of the air base and delivery of the missiles for more than a year.
What happens on Cyprus may have a wider significance. In Yugoslavia, Greece backs Serbia. Turkey, of course, backs Muslims, both in Bosnia and in southern Serbia (Kossovo). Such backing is of limited significance, partly because Turkey has no land border with either area. It seems likely, however, that the Greek government has been restrained partly by fear that Turkey might respond to any action on its part by attacking in Cyprus. Once the missiles arrive, that restraint may be removed. That may happen at about the time the Dayton Accords clearly collapse as U.S. and other NATO troops withdraw, and fighting resumes.
The U.S. view is that arms sales should be carefully controlled to avoid exactly this sort of consequence. The Russians are unlikely to agree. They desperately need hard cash, and their best-selling products are modern weapons. They also are quite aware that the United States sells even more than the Russians do (and must continue to do so as its own domestic market shrinks).