As he focuses on Russian arms sales to China, he finds that these sales and China policy, in general, reveal much that is disturbing about the nature of the Russian policy process and Russia's profile in Asia. Indeed, it appears that Russia needs China more than China needs Russia and that Russia has lost control of the policy process. Arms manufacturers are making their own deals with China, bypassing the government. Their actions reflect the broader picture by which private sectors or lobbies are able to capture control of Russian state policy and manipulate it to their own interest, not to a discernible Russian national interest.

Russian policy increasingly appears to be moving toward a confrontation with the United States from which only China will gain as a state, while private Russian interests also profit at the expense of Russia's strategic position. The anti- American aspects of this process also apparently accord with the widely reported Chinese suspicions about U.S. policy. For this reason, the evolving nature of the Russo-Chinese relationship is or should be of utmost interest to policymakers and analysts alike.

The Strategic Studies Institute is pleased to offer this report as a contribution to the informed debate regarding Russian and Chinese policies, and U.S. relations with both states.

                         RICHARD H. WITHERSPOON
                         Colonel, U.S. Army
                         Director, Strategic Studies Institute

For the past few years China has acquired substantial amounts of Russian military and dual-use technologies. These acquisitions are a key element of the rapidly developing Russo- Chinese entente and play a prominent role in their mutual relationship. But the arms sales also reveal much about the nature of Russia's policy process.

Arms sales are now critical to Russian defense industry because the state cannot afford to procure weapons for its own forces. Exports remain essentially this industry's sole source of income. Although many defense firms have received subsidies of one sort or another, and even recently obtained their own ministry to defend their interests, only if they export can they be sure of surviving. China's hunger for weapons imports matches Russia's need and creates a perfect fit between both sides. But close examination of this industry's activities indicates that it is selling China state-of-the-art systems and weapons or licenses, like the license for the SU-27 Fighter, without government authorization. In other words, Russia's government has lost control over its arms sales program but dares not react negatively, despite the military implications of such transfers for its own security.

The reasons for this are essentially two-fold. One is that under President Boris Yeltsin a privatization of state policy has taken place. Private lobbies, sectors, and factions are able to seize control of state policy and state assets and exploit them exclusively for their own narrow interests. No concept of national interest operates here even though these groups invariably choose to present their activities in the light of advancing Russian national interest. For example, arms sellers argue that now that they can sell freely abroad, their program of unrestricted sales will allow Russia to compete with the United States in Asia and save its defense industry in the bargain.

These arguments neglect deeper strategic analyses of China's objectives in Asia and the general Asian security balance. They focus singlemindedly on getting state subsidies and cash, much of which goes unreported or into private bank accounts. In effect, China is able to exploit these industries' and officials' greed, and the absence of central coordination to get the best deals for itself. So the first reason why the government does not stop the uncontrollable and uncontrolled sales is its inability to do so at a time when officials also obtain private gains.

The second reason pertains to Russia's policy perspectives, which view China increasingly as a strategic partner and, even in some official or quasi-official documents, as an ally. This partnership is explicitly directed against the United States as a power that allegedly seeks to restrict Russia's and China's pursuit of their national interests. Russian spokesmen say China supports the reunification of the Commonwealth of Independent States (CIS) under Russian auspices, opposes NATO expansion, offers markets for Russian producers besides arms firms, and supports Russia's participation in Asian international fora. Of course Beijing knows that Russia needs it to enter organizations like the Asia-Pacific Economic Cooperation (APEC), and exploits that understanding in every way possible, since Russia is the demandeur in the relationship. Still, Russian policy, despite complaints by several public figures and military men concerning its strategic implications, is firmly pro-Chinese and evidently seeks to align itself on every issue of Asian and international security with Beijing.

Increasingly, Russia is associating itself with China's policies for Asia and its outlook on world politics, seeing in this a way to obtain greater leverage as one of the poles of the emerging multipolar world. But while Russia obtains some cash (not as much as one would expect given the costs of these systems) and psychological or intangible benefits, China registers material gains. Russia plays gendarme for China in the volatile Central Asia, sparing China the need to intervene there to seal off the area from its rebellious Xinjiang province. China gets badly needed weapons, technology, and the services of Russian scientists at a low relative cost. It gains permanent leverage among regional and central lobbies who are influential players in the Russian policy process as well as a hold on many corrupt Russian officials. Beijing obtains support for its policies in Taiwan and, vis-a-vis ASEAN and the Spratly Islands issue, China also has won Moscow's support for its domestic programs that repress human rights. Russia pointedly ignores China's domestic repression of human rights which remains a source of tension in the Sino-U.S. relationship.

All these factors suggest that Russo-Chinese ties signal a relationship that is being driven by China's strategic interests and the private interests of Russia's arms dealers and other anti-Western elites as much, if not more, than by a reasoned calculation of Russian strategic or national interest. The bilateral relationship, despite U.S. complacency about it until now, has gone beyond normalization and friendship. But in view of the fact that much of Russian security policy is clearly out of control and being driven by China and a visceral anti- Americanism in Moscow, we need to show greater interest and concern over the evolving character of Russo-Chinese relationships.