Russia, China not to conclude new military contracts yet.

MOSCOW, September 24 (Itar-Tass) -- Russia and China will not conclude new military contracts during Russian President Dmitry Medvedev's forthcoming visit in China yet, though several projects are under development, Russian presidential aide Sergei Prikhodko told Itar-Tass on Friday.

"We did not instruct Anatoly Isaikin (Rosoboronexport chief) to
prepare something new for a visit, but there are several projects under
development in naval and aviation spheres," the Kremlin official said.
He acknowledged that the Russian recent sales of military hardware to
China do not grow. "The prices cannot keep growing forever. The absolute
prices on military products do not really grow," Prikhodko noted.
"This is caused by the fact that China's highest demand, which Russia
could satisfy without any damage to national interests, is met," he
pointed out. "Alongside, we are passing to a higher stage to launch a
licensed production of aircraft and other products in China," the
presidential aide added.
Prikhodko also reaffirmed the current problem of competition between
Russia and China on the markets of third countries. "This problem exists
and we do not deny it, the Defence Ministry and the Federal Service for
Military-Technical Cooperation are tackling it," he said. "It is not the
work for the president to criticize his Chinese counterpart that Chinese
enterprises are frequently rivals for Russian products on the markets of
third countries, including with the use of the know-how technologies
purchased in Russia," the Kremlin official said. The Kremlin high-ranking
official did not rule out that this problem would be raised by chief of
the Federal Service for Military-Technical Cooperation Mikhail Dmitriyev,
who is accompanying the Russian president during his visit to China and at
the talks with Chinese partners.
Prikhodko emphasized that this issue, which is related to the
intellectual property protection, exists in the relations not only with
China, but also with other countries, primarily Asian countries. "The
intellectual property protection on military hardware, licenses on the
production of which were issued to these countries during the period when
the Soviet Union existed - this problem remains quite pressing," the
presidential aide stated. "This issue concerns not only military products
as the most competitive, but also other goods. We raised this issue at the
negotiations with Hungary, where it was settled, with Slovakia, Poland and
Bulgaria," he added.
The Russian main arms exporting company Rosoboronexport also
recognized logical a lower scale of military-technical cooperation with
China. "A lower scale of military-technical cooperation with China is
logical, because the military-industrial complex of this country is
developing very successfully. Therefore, China does not make major weapons
purchases," Rosoboronexport chief Anatoly Isaikin elaborated. China
accounts for less than 18% in the Rosoboronexport total sales that "will
be even lower as it is the objective process," he said.
Despite a falling trade China remains one of the most important
Russian partners in military-technical cooperation. For the last 15 years
China was one of the major buyers of Russian weapons, purchasing up to 2.7
billion dollars of weapons annually. Since 2001 the Russian-Chinese
military trade has reached 16 billion dollars.
Specifically, China has purchased at least 200 fighters Su-27 and
Su-30, several divisions of air defense systems S-300, surface warships,
diesel-powered submarines, gunnery and armored vehicles. In 2009 Beijing
concluded with Moscow a contract envisaging the supplies of more than 100
aviation engines for Chinese jets G-10.
-0-baz/mil