Tuesday, November 24, 2015

China's first oversea base

I will keep this short. We have report that China has signed a ten year deal with Djibouti for its first oversea naval base. Andrew Erickson provided a good analysis of today's development in this article. The location makes a lot of sense since China has been making port calls there as part of its missions in Gulf of Aden. This 2010 Jamestown article did a good job of exploring what had been an expanding support network for PLAN up until that point. Certainly, as Chinese naval influence grows in this region with more port calls, patrols and joint exercises, I think there will be more arrangements where China establishes what looks like oversea base (even if they are not called that).

Saturday, November 7, 2015

My thoughts on COMAC C919

Most recently, COMAC (Commercial Aircraft Corp. of China) rolled out the first C919 off the assembly line to eagerly awaiting media. The question as we go forward is how successful will C919 be or how successful can it be? It has already pushed back it maiden flight from 2014 to 2016 (which is not too uncommon in aerospace industry) and first delivery to 2018.

AVIC1 has had a long history of supplying parts to both Boeing and Airbus airliners. China's large domestic market has even resulted in final assembly lines inside the country for A320 (and also A330 and B737 going forward). Even so, building a successful modern airliner require building up and maintaining a complicated supplier network, production systems, assembly lines, marketing network and after sales service centers. On top of this, the process of getting FAA certification for airliner is a tremendous undertaking. China had very little experience before it started ARJ-21, which resulted in significant delays while trying to get CAAC certification. Now 8 years after the initial planned service entry, the first ARJ-21 is finally about to enter service later this year without FAA certification. China certainly learnt a lot from ARJ-21 project from all I have read and is unlikely to have the sam delays getting CAAC certification in the C919 project. However, the thorny issue of have FAA recognizing CAAC certification still needs to be resolved before both aircraft can be sold to the wider markets. If they cannot be resolved, then C919 simply would not be able to land in large part of the world which requires on FAA or EASA certification. So until then, C919 is restricted to the domestic and surrounding markets. Based on COMAC's ARJ-21 delays, it's reasonable to assume that most airlines would prefer to wait until closer to certification before making decision on purchasing C919.

From all of this, I think it's quite clear the tremendous undertaking to go straight into C919 without even achieving a successful production cycle in the less competitive regional airliner segment which is currently dominated by Bombardier and Embraer. Up to now, C919 has been able to get large amount of orders (about 500) based purely on the size of its domestic market. As seen in the Russian project of MS-21 and Superjet-100, it is far easier to get export deals in the regional jet segment than the A320/B737 segment. Even an experienced aircraft maker like Bombardier has struggled with breaking into this segment and is loosing a lot of money and facing long delays in the CSeries project. Bombardier made the entry into this segment trying to take advantage of the generation gap between A320/B737 and next generation of regional jet by utilizing the next generation engine to achieve about 15% improvement in operation cost over A320. However, Airbus quickly countered CSeries and C919/MS-21 threat by coming out with the A320NEO upgrade by offering the same new engine options, new sharklets and some other smaller upgrades. That has more of less crushed CSeries sales prospects and given it a lead over the improve B737MAX upgrades. At this point, both C919 and MS-21 are going up against the two entrenched players with significant resource advantage. Unlike the CSeries, C919 (and MS-21) can at least secure large quantities of domestic orders and also have significant government support. COMAC does not have the marketing, production, certification and sales experience that Airbus and Boeing do. It is always hard to knock off established players without advantage in product quality. Both airbus and Boeing have significant backlogs, so C919 maybe able to get more orders in both domestic and export market if it is able to have fewer future delays and obtaining FAA certification. I think if it can get FAA certification and several hundreds export orders, this would be considered a successful project. After all, Airbus's first project A300 only achieved 500+ sales.

More importantly, I think China sees this a significant initiative in lifting its civilian aviation industry. I've talking many times in the past about how China's shipbuilding industry allows it to quickly and cheaply build up China's naval force. China's aerospace industry simply doesn't have close to the same production capacity as Lockheed Martin and Boeing. I read that COMAC aims to lift C919 annual production rate eventually to 150 aircraft a year. Even though that's rather small compared to A320 production of 60 a month, it would still be a huge undertaking for COMAC and AVIC1. That kind of huge leap in production quality and capability would be transferable to military aviation projects. In the end, I think China is willing to loose money on both ARJ-21 and C919 project for these reasons.

After C919, COMAC and Russia UAC is said to be joining forces in the C929 project. It seems like the technology used in this project may be behind that of B787 and A350. Both of which represent the cutting edge of modern civil aviation. So, it's hard for me to see how they could compete for much outside of domestic project. In choosing to partner up with UAC, COMAC is signaling it does not think it's capable of developing a commercially viable C929 project on its own. All of which leads to me think it would be best for China followers to temper expectations on the C919 project.

Sunday, September 20, 2015

J-20 and more thoughts on 5th generation projects

Most recently, a 7th prototype of J-20 project (No. 2016) appeared and made its maiden flight on September 18th. It’s been 9 months since the last prototype had come out, so this new prototype is a sign that the program has not hit any major stumbling block and was just going through the next iteration in its development. As a refresher, 2 prototypes (No. 2001 and No. 2002) came out and flew in 2011. They were probably the demonstrators of this program. Over 2 and half years later, the 3rd J-20 prototype (No. 2011) came out and was followed by 3 more prototypes (No. 2012, 2013 and 2015). They had some major redesign and changes compared to the demonstrators. So they should be considered the first pre-production prototypes and were probably produced in the same batch. CAC and CFTE have been testing them since that time. I expect that more J-20 prototypes will be coming out in the next few months, since they seem to be building them in batches on this and past CAC project. Compared to the last batch of J-20s, the most noticeable changes have been on the DSI bump and the engine nacelle. The DSI bump looks to be a little larger and people have speculated that some EW equipment may be installed inside. From the relatively few changes between the batches, one can surmise that the J-20 design is more or less frozen.

Indeed, there have already been speculations that the first production J-20s will come out next year to be tested and evaluated by FTTC. While I think that is certainly possible, I think it is also best to tamper one’s expectations and expect some problems along the way. Every 5th generation projects so far have experienced some bumps along the way. The PAK-FA project had fire on one of its prototypes and still has not flown a new prototype since. IAF have continually complained recent years about the technology and progress of PAK-FA. The F-22 and F-35 projects are far more open, so there were many reports of issues along the way. One would expect J-20 to encounter similar issues along the way even if those reports only come out in the rumour mills of Chinese military forums.

With everything that we can see, I think that CAC has been doing a great job with the J-20 project. At this point, I already consider J-20 project to be ahead of PAK-FA in both the design and timelines. In terms of design and technology, J-20 looks to be better configured for stealth from most profiles vs PAK-FA. The next generation AESA radar and the rest of electronic suite are already been deployed J-10B/C and J-16 compared to lack of such Russians platforms. Even the next generation missiles (like PL-10 and PL-15) seem to be further along in development and deployment than similar Russian systems. PAK-FA only seems to be using a more advanced engine at this phase of testing. Considering that the Russians started to research on 5th gen fighter jet in the 80s and first flew PAK-FA a year earlier than J-20, this does not speak very well of Russia’s aerospace industry.

For the past year or two, I’ve read numerous articles coming out of India that complained about the technology, cost and lack of their work share in the PAK-FA project. Since then, there was a fire on one of the PAK-FA prototypes when they were giving a flight demonstration to Indian delegation and have not shown a new prototype since. There have also been numerous online posts about the build problems and quality issues with those prototypes. Now most recently, I’ve also seen a report where India is thinking of pulling out participation in the development of PAK-FA and just buying them straight out of Russia. They probably realized Russia was unwilling to share its most sensitive secrets so they needed to devote more of their R&D resources on their domestic project MCA. At the same time, it also appears that some in IAF is favouring for purchase of more Rafael and less PAK-FA. There are numerous components of PAK-FA project like stealth and propulsion, which are not up to par with the standard established by F-22. If the leap in technology over Rafael is not big, then it makes all the sense to buy the more of the mature platform. Of course, that could also create a disastrous scenario for IAF if J-20 and FC-31 turn out to be much better than Rafael.

If all goes well, J-20 looks to join service in a couple of years. This version of J-20 will be quite underpowered and have to wait a few years before getting WS-15 engine. That would be the next major change for J-20. It looks like the second demonstrator or first pre-production prototype of FC-31 may be coming out soon. I think most people expect some significant changes vs the first demonstrator. In the recent years, CAC has devoted most of its resources on J-20, whereas other projects like J-10B/C have been a little slow in development. SAC is tasked with the development of numerous flanker variants and UAVs. It may not be able to devote the same amount of resource on FC-31 project, so I would expect the progress on FC-31 to be slower than J-20. Even if FC-31 becomes ready several years after J-20, it may still become available to export market at the same time as PAK-FA (after Russian and Indian orders). So I think FC-31 could capture a good chunk of the non F-35 market.

Sunday, September 6, 2015

More on Yuan submarine.

Recently, I saw a good article that Chris Carlson posted on USNI regarding Yuan Submarine. Although I have not attempted to do any GE measurement of Yuan that I had done with 093 class, I find his assessment on the size of the Yuan submarine to be well done. I previously would have estimated the ratio of Yuan's beam to that of Song at higher than 8.4 to 7.5 based on photos, but he uses a very thorough approach, so I will accept his numbers until anything else comes up.

On the topic of China using Yuan as an anti-ship cruise missile platform, I think he is also on the money here vs the other USNI author. At this point, China has put a lot of investment into different types of torpedoes whereas much less noise have been made about submarine launched anti-ship missiles, so I think their preferred method of attack on surface ships is going to be through blowing a whole underneath rather than hitting something on the midsection. There have not been any sighting of submarine launched anti-ship subsonic missile that's newer than YJ-82. On top of that, it's highly unlikely YJ-18 is designed to be launched from torpedo tube. With the specs of Chinese navy's new CCL VLS system, I think the diameter of YJ-18 is likely to be larger than 53 cm which is the requirement to fit inside the torpedo tube.

And I'm waiting for his article with Andrew Erickson regarding Chinese supersonic ASCMs to come out.

Victory Parade and Chinese politics

Most recently, China had a Victory parade to celebrate the 70th anniversary of war against Japan. As part of this parade, China rolled out its latest ballistic missiles, cruise missiles, armored vehicles, UAVs, helicopters, fighter jets and special missions aircraft. All of the displayed weapon systems are believed to be in service. For the first time, China publicly displayed DF-21D and DF-26, which are the ballistic missiles designed for attacking moving targets like a carrier. Certainly, I have posted numerous blog entries in the past regarding China’s ASBM program and the challenges around it, so this has always been an area of interest for PLA followers. We have now seen these ASBM missiles on display and know that it is in active service. What we don’t know is how good China is at finding a fast moving carrier group in the middle of the Pacific Ocean, tracking it and then engaging it. Certainly for a missile DF-26 which will have longer range and higher re-entry speed than DF-21D, the engineering challenge of finding carrier upon re-entry and maneuvering to hit something that can move at greater than 30 knots is very daunting task. They also displayed DF-5B, which is China’s first public display of an ICBM with multiple nuclear warheads. The parade also displayed the DF-10A LACM (land based version of KD-20 LACM) and various other short and medium ranged ballistic missiles. The second artillery certainly had a field day at this military parade. Comparing this to the pictures from China’s military parade in 1984, it was quite interesting how backward they were back then. It still had the same nationalistic tone and show of strength from all the Chinese leaders.

Behind all of this, it’s a time of uncertainty and worry for the current Chinese leadership. China’s major leaders of past and present were all there (even ones I didn’t realize was still alive) to present a united front. By this point, most people have seen the crash of Chinese stock market. The Chinese economy has also slowed down a lot by this point. Nobody can predicate what will happen there or anywhere else, but these parades are used to show the power and accomplishments of the communist party and distract people from the worries of economic and other problems. I’ve read numerous articles on the politics of recent events. While I’m not sure about their accuracy, it does paint a picture where the younger generation of leaders is still battling the older generation in their efforts to carry out reforms. China’s previous paramount leader Hu Jintao was quite limited in his power due to the continued influence of his predecessor Jiang Zemin. It seemed like the leadership of Xi Jinping and Li Keqiang would get more freedom in their efforts to bring a more market based economy to China since taking control 2 years ago. Reading about their pilot free trade zone in Shanghai, the attempted deleveraging of the credit bubble and wider trading band of RMB, I have gotten the feeling that Li Keqiang has some pretty good ideas about resolving some of the problems in the Chinese economy. In the past couple of month with the worsening stock market and rapidly slowing economy, you can really see a lot of his moves getting reversed. (If you listened to any of Donald Trump’s speech recently, you would hear about the greatest one-day devaluation of RMB of 2%.) To clear up certain misconceptions before we continue: China does have its own foreign exchange market similar to EBS, which allows RMB to be freely traded within the 2% daily band for entities inside China. It just has capital control preventing money from easily flowing outside the country (like Brazil, Korea, India and numerous other nations), so does not appear free-floating to outsiders.

Throughout PRC’s history, elderly members of the politburo have been more reluctant toward reform efforts. Even when the all-powerful Deng Xiaoping was pushing his reforms in the 80s, other party elders like Chen Yun and Li Xiannian limited Deng’s efforts as soon as troubles started. The most reform minded Chinese leaders of their day Hu Yaobang and Zhao Ziyang were pushed out and humiliated after the student protests of 1987 and then the infamous 1989 TianAnMen Square protests. In a functional economy, we have the boom and bust cycle where credit expand during the boom and contract during bust causing problems in the economy. The bust part of cycle allows the inefficiencies and ailments of the economy to be removed. It is natural for any reform and deleveraging economic efforts to cause a period of economic and social problems. The last time China really allowed the bust to happen is during the Asian economic crisis of 1997 and 1998 when the inefficient state owned enterprises were allowed to fail. At the time, unemployment rate, early retirement and crime rate skyrocketed in the country. The FaLanGong movement arose during this period. Since then, China enjoyed 10 years of good economic growth, a slowdown in 2008 and another 6 years of economic growth. While this was happening, it has been accumulating unsustainable amount of debt and credit creation.

In May of 1989, Zhao Ziyang, who was nominally China’s president at the time, told the visiting Soviet leader Gorbachev that he was not really in charge of China in real decision-making. After taking over in 1987 from Hu, Zhao needed to survive 10 years against the pressures of the conservatives inside the politburo, but lasted less than 2 years after refusing to participate in crushing the student movement. Since then, most of the reform efforts have been economically related and is badly needed in China right now. If reform minded leaders inside the day-to-day leadership get pushed every time there is a setback and become blamed by the elders for economic problems, it’s hard for me to see how this new generation of leaders can get anything done while Jiang Zemin and Li Peng are alive and functioning. Looking beyond China’s display of military power in this parade, China’s biggest threat to the world is an economic crash that slows down its major trade partners and vacation destinations.

Monday, July 20, 2015

Update on Chinese Navy: MLP and Zubr

Most recently, a new amphibious type of ship entered service with Chinese navy that looks to be similar to US’s Mobile Landing Platform. You can see it from the picture below.

As shown int he pictures, the most obvious usage of this ship (Given the number 868) has already been shown in photos where a Zubr class hovercraft boarded it. Based on the current photos, only one Zubr class hovercraft can fit in the platform area although it could also possibly also hold a Type 726 hovercraft (Chinese version of LCAC). PLAN had previously signed contract to purchase 4 Zubrs from Ukraine with 2 produced in Ukraine and the other 2 in China. The 2 from Ukraine were both delivered prior to Russia’s takeover of Crimea, but future dealings for Zubrs will most likely be with the Russians. At the time of purchase, it looked like they could be used in any Taiwan conflict scenarios or any amphibious operations in South China Sea. More blue water amphibious marine expeditions required the Type 071 class. The induction of No. 868 certainly allows more expanded operational scenario for Zubr, but the scale of its usage is really limited by the number of such MLPs that PLAN will likely induct in the future.

This looks to be a vote of confidence for Zubr class in China. I think that China will be building more Zubr with Russian help (especially on propulsions) after the first batch of 4 joins service. This huge commitment for Zubr comes after PLAN had already inducted the smaller Type 726 into service. That would indicate Zubr is bringing some unique capabilities that Type 726 launched from Type 071 simply cannot provide. As with No. 868, we will have to wait to see its other usage cases, since PLAN is unlikely to have ordered such a ship just to carry 1 Zubr around.

Saturday, June 27, 2015

Export of Yuan Submarine

Very recently, an article from Bangkok Post broke the news that China has own the competition to supply 3 submarines to Bangkok Navy. While this is China's third export deal of conventional submarine in the past year, this is the most significant one in terms of the competitiveness of the competition. Since China and Thailand has a history of military transactions, this deal is unlikely to encounter the kind of scrutiny like the Turkey long range SAM contract.

At present time, there are at least 12 Yuan submarines of different variants (4 039As and 8+ 039Bs) in service with PLAN across 2 flotillas. They and the Type 039 Song submarines are the work horses of PLAN. After a rapid production run the last couple of years, the production has slowed in the past year. While this is the most capable of China's mass produced conventional submarine, it is not considered to be as classified as when it first came out. In the past year, Admiral Greenert, Chief of US naval operation, was allowed to go inside one of the Type 039B. While this generally reflect PLAN's effort to be show greater transparency with its USN counterpart, it also indicates 039B is not held with the same level of secrecy as Type 093 nuclear submarine. Since late 2013, a model of S-20 was displayed in various arms exhibitions. From one of the exhibitions, the S-20 is shown to have submerged displacement 2300 ton with maximum dive of 300 m. I was always under the impression that 039B was larger than this, so S-20 may turn out to be a smaller version of 039B.

In late 2013, It was reported that China had received order for 2 Ming class submarines (Type 035B) from Bangladesh. This was certainly surprising news since Chinese shipyard have not produced such submarines since early 2000s. Rather than selling 2 from its existing fleet, these were to be new builds. It's not clear which shipyard is building these submarines, since I have yet to see any pictures. While the type of submarine was surprising, the fact that China was selling to one of its traditional clients was not. Then in early this year, Pakistan announced that it will purchase 8 submarines from China along with 4 frigates. None of this was surprising, since reports of export of 6 to 8 Yuan submarines (S-20P for Pakistan?) had been rumoured for several years after Pakistan's U-214 deal failed due to funding issues. Since Pakistani Navy had always been purchasing advanced European submarines up to this point, it was significant that Pakistani Navy found Yuan submarine as suitable purchase. Even so, China's traditionally strong relationship with Pakistan was important in this deal.

While, the order from Thailand is not as large as Pakistan, it involved more competitors based on the various articles on this sale. With offers from Germany, South Korea, Russia, Sweden and France, S-20T won against some quality competition. None of this means Yuan submarine is the most advanced or the quietest conventional submarine out there. The article was very clear in that Yuan was picked because it the best value for money. In other articles, they also mentioned China's willing to transfer technology and provide training. I would think that other nations are willing to provide training and ToT also, so I think the bigger draw is China's cost advantage. The article also mentioned Chinese submarines can stay in the water longer and had superior weaponry and technology. That could mean Yuan submarine's AIP engine showed good performance in trials. The superior weaponry probably points to the torpedoes and submarine launched anti-ship cruise missiles that China has developed in the recent years. Traditionally, the Chinese submarines have been more noisy than western submarines. While this export variant of Yuan submarine is unlikely to the quietest in the competition, its cost advantage along with comparable performance in other areas won over Thailand. It's worth noting that China's 054A had lost out to South Korea in Thailand's frigate competition despite similar cost advantage. So this shows Thailand would not pick S-20 if it did not believe in its performance.

Conventional submarine is one of the most lucrative sector of defense industry. West European and Russian submarine makers had been winning most of the export competitions in the past, so it bodes well that S-20 could win one of such competitions on more than just cost advantage.