Catalyzing international investment in Western defense industrial supply chains

A conversation with Dr. Vasabjit Banerjee and Dr. Benjamin Tkach

Dr. Vasabjit Banerjee and Dr. Benjamin Tkach recently wrote an excellent War On The Rocks article, Munitions Return to a Place of Prominence in National Security. Their piece has enormous implications for China and Russia, so I reached out to both of them. They’ve graciously agreed to an interview request to discuss the piece and some of its wider implications.

Joe Webster of C-R Report: Before we get started, I’ll kick us off by saying that any opinions expressed or implied by any of us are strictly our own personal opinions. With that, let’s move into the discussion.

At a very basic level, why is munitions production important for great power competition?

Benjamin Tkach: Thank you. First, we want to say thanks for the opportunity to talk with you about these topics. We really appreciate this opportunity. This is a very foundational question because it's a reorientation of foreign policy from the last 20 years. We don't want to take too much from the Russia Ukraine conflict and say this will now define the future. But one thing that we can take is that sustained attrition, land-oriented contests use a lot of ammunition.

And they're different when they are competitors that are belligerents that are at similar levels. I mean, there's some issues with that insinuation between Russia and Ukraine there, but the conflict itself has borne out that they are competing at very similar levels, maybe not using the same equipment, but we're not seeing the breakouts that many analysts initially thought with the initial invasion a year ago. And so with respect to great power competition, one of those dimensions of competition is going to be the defense industrial base.

That is what we've seen throughout history, right? The industrial base looks different in different phases of human history, but the uniqueness of an industrial base to produce and maintain munitions for a great power competition that will be sustained, where attrition is a factor. That's quite different organizationally than what we've seen over the last 20 years with counter terrorism and insurgency operations where the asymmetric capabilities were so divergent between combatants, especially in the United States context of counterterrorism operations, that you don't have that misalignment of strength and weaknesses that you see in asymmetric conflict where both belligerents can take advantage of a weakness of the other.

In great power competition, munitions become a capability where belligerents can exploit the weakness of the other because you have to have munitions at the moment you need them.

And it becomes problematic for munition production, especially in the United States context, because munition production is something that can be targeted year in or year out for budget cuts. And that is horrifyingly bad for the industrial base because munitions only have one buyer for the types of munitions that we're discussing today.

There’s the United States and its allies, but there's no other market niche for these companies to enter into. Some of the facilities which we'll get into again later are government owned, contractor operated facilities. And so we've already had to construct market structures or dynamics to facilitate just keeping these things open that's different than having keeping something with the lights on is different than having enough capability to then conduct great power, competition or worst case scenario, a great power competition conflict.

Vasabjit Banerjee: I agree with everything Ben said. I would just add 2 broad things. Ammunition provides the capacity for a country to continue conflict. So to carry out offensives for example, or to carry out defense if these border conflicts happen in the sort of disputes which my South Asia work focused on.

 These problems constantly bedevil states in South Asia: China, India, and Pakistan are constantly concerned by the fact that they have to make munitions, enough munitions to block an offensive as well as carry out sharp, quick offensives. And they need massive amounts of munitions, which we are now seeing in the Russo-Ukrainian War.

With industrial warfare, any time you have territorial disputes, land armies, these things will come in. And it's not just about offensives, but it's also about the capacity to defend and stay in battle. For example, if you look at the Arab-Israeli War in 1973, the 1965 Indo Pakistani war, ammunition and the availability of ammunition quite literally affects the belligerents’ capacity, the ability of belligerents to endure as well as their willingness to reach a truce. So ammunition production capability is absolutely key, especially if great power competition increasingly leads to wars in outlying areas.

So if you have events such as an invasion of Taiwan, an invasion of Ukraine, you will need massive amounts of ammunition. And as Ben said, you need ammunition to be immediately available, not in a fortnight.

C-R Report: That’s a very helpful history of how we see shortages of Western munitions because, like you said, there was an asymmetric competition between the US and some of these insurgent groups in the first two decades, which didn’t require the West to produce munitions in a timely manner. So staying on that thread, you mentioned that the availability of ammunition is increasingly important. What's the outlook on ammunition availability on the western side? The Russian side? Let’s talk about both the near term as well as look a little bit further out over the medium term.

Benjamin Tkach: It's a great question. With land conflicts, you see intensity ebb and flow. We've seen that in the Ukraine situation. Part - not all, but part of that - I would argue of that is due to the availability of ammunition. There's a lot of other things that influence that intensity, including political responses to President’s Biden visit and the anniversary of the war.

But again, if you have the munition, and you have the personnel, and you have the equipment, why can't you not take advantage operationally, right?

The slow tempo suggests that one or more of those pieces are missing, and there's obviously a tremendous amount of work on Russian tactics and some of the failures of command and control that we've seen that we didn't expect to be within the military that are very present. So it's not just munitions. I want to make sure that's very clear. But I do think munitions are part of it.

So when we think about the short term from the Ukrainian perspective, they have the industrial basis of, essentially, the United States, NATO and Western powers that are willing to deliver publicly, make announcements, sign contracts domestically for production. Defense Secretary Austin has publicly said in multiple countries and multiple contexts that we're delivering munitions because of what the objectives are. That situates Ukraine fairly well in the in the short and medium term.

But we have seen certain shortages for calibers of munitions for artillery like the 155mm, the 122mm. There are shortages of and that our stockpiles both globally and domestically, have shrunk to unknown levels, but levels where you know you know it's bad, when we're asking Israel for munitions that we've depoted there for them. Where we’ve asked the South Koreans to do the same thing. That's an industrial production limitation.

You know, I don't want to quote numbers on rates of fire by the Ukrainians, because the spread is so large, but we can be confident in saying that our industrial base is not keeping up with their demand because of how we're publicly repositioning ammunition for delivery.

Vasabjit Banerjee: On the Russian side, I think it’s divided into 2 parts. This goes back to our broader research on high tech and low tech weapon systems. In terms of PGM precision guided munitions, the Russians are obviously falling back due to sanctions.

They are using, for example, SAMs, Surface-to-air missiles, for surface-to-surface attacks.

So they're using, you know, S300s, probably S400s, for surface attacks, which is not what they’re meant for, really. So we know that. We also know about them ripping off refrigerators and microwaves. They are sanctions busting as well, which I believe is happening. Who is sanctions busting with them? We have some of the usual suspects.

You know in the Middle East, we have Iran and in East Asia you probably have China, North Korea. I have my suspicions that weapons from other countries are being laundered via North Korea, but this is my personal opinion. So take that as you wish.

C-R Report: No idea what the other countries would be?

Vasabjit Banerjee: Perhaps a neighbor of North Korea is using North Korea as a washing machine, since there's so much in demand in Russia. So there's that going on and Russia's desperate for PGMs. But in terms of low tech, what we call dumb bombs or whatever unguided stuff, such as 122 millimeters 152 millimeters, and 23 millimeters that are useful against suicide drones and drone swarms, Russia is not facing a problem. We think Russian production of dumb bombs is continuing pretty much unabated. It has the old stuff. I mean, it's got the machinery running from the Soviet era, that functions.

So this presents essentially a dualistic sort of explanation. On the one hand, Russia is running short of PGM's. This morning, the Economic Times of India reported that Russia’s deliveries of the S-400 to India will be delayed. Which is a big deal because you know it's a cornerstone of Indian air defense. And I think that Turkey is watching it because Turkey also has S400 units and may realize that Russia is not a reliable defense partner. Obviously, it makes sense because if Russia doesn't have enough for itself, how can it export?.

I was told by an Indian defense analyst, Mihir Shah, who publishes on these topics quite frequently, that India does need help in replacing components for Russian air systems, so whether you're talking about air platforms or antiballistic missile defense systems, how do you get components for these things?

And the West may be able to help with those things. Sounds like a strange insight, but it's actually quite useful to understand because if the Indians are having a components and subsystems shortage, the West may ironically be able to help on Russian and Indian-made systems.

So we know going back, Russia's having a PGM problem.

But it's not facing an ammunition problem. In the international market, it is Ukraine that many people are representing, and trying to get ammunition for.

And I just might add that there are huge stockpiles of Soviet and Russian ammunition that are there in countries such as Cuba, Venezuela, Peru, Ecuador, and Angola. South Africa also makes 122 millimeters. Pakistan makes 122 millimeters. And that ammunition can be acquired if there is a concerted Western effort, including side payments such as development aid.

Pakistan may be sensitive because of India's sensitivities, but I do not think any such sensitivities exist in southern Africa or in Latin America about acquiring these ammunition stockpiles from, for example, Peru, Ecuador or South Africa.

Joe Webster: I've read that Russian diplomats and Russian military intelligence has been trying to claw back some of the weapons that they provided to developing countries. What role, if any, has China played in either encouraging those flows to Russia or discouraging other countries from providing aid to Ukraine?

Vasabjit Banerjee: China is providing aid to Russia. I'm not going to go on record saying that China is providing lethal aid. But let me be honest. A soldier needs helmets. A soldier needs flak jackets. A soldier needs uniforms and boots. And even blankets.

China has always done this dual use thing even with its own weapon systems where, you know is it military, is it not.

I say yes, eight is 8. If you're helping one side with equipment, whether it's lethal or nonlethal, whether it's a tractor with which you dig ditches. It has still helped the Russian war effort.

I have not heard of any Chinese pressure on developing countries. On Africa and or Latin American countries to go either way. It so happens that Latin American countries, for example Venezuela, Bolivia, and African countries such as Mali, that wherever there's China, there's also Russia.

So it may not be that China is pressuring anybody to do anything, but there is a correlation - and correlation is not causation here – that wherever there's China, there is Russia as well.

Tkach:

Just a kind of a minor point.

We should have started this question this way. Ukraine's industrial base is not in Ukraine because it's allied support, right? They don't make most of what they're using. They may have made components, but when you look at the old Soviet setup and you know even what Ukraine as recently as 2014 was sending to Russia in terms of like frigate components, what where they fit within the old orbit of industrial production, Russia's much better situated to be self-sustaining.

They do need outside parts. They do need microchips, they do need components, but it makes sense that why we see this divergence in support and capability. One area that's worth thinking through with Russia, that Dr. Banerjee mentioned with S-400s, Russia's lost close to 10,000 vehicles, at least according to public records. 1600 tanks, right. At what point do those losses become so severe that domestic production no longer keeps up with those losses?

We are already seeing the export market shrink considerably for Russia, so the excess of what would have been exported can be used in the conflict. What happens when your domestic production can't keep up anymore, right? If this takes another year or two or three?

Those questions are probably things that Russia are dealing with right now, trying to think through their industrial base.

It might be one thing to have the ammunition. It's going to be another thing to actually have the vehicle, the artillery pieces for the tank. You've already seen very limited use of air superiority capabilities. So there are other factors that are going to become rate of fire determinants.

Banerjee:

I’ll just add this. There is a problem with the grab bag of stuff that the West is delivering to Ukraine. Because what's happening for example with the French AMX 10? The French ammunition for the French main gun is not compatible with other NATO ammunition. It is uniquely made for the French gun and by a French company.

So Ukraine’s sustainment costs and access to ammunition is being hobbled by this potpourri of equipment that we are delivering to them. It will affect them because if you're going to tell them, yes, I'll give you 15 tanks, but they only have so many rounds of ammunition, would you be carrying out an offensive, especially if your sustainment system is not up to the mark? Which it is not: you can't just set up these things in six months.

So is it better to say that instead of donating a bunch of different types of weapons we just say well, the US has M1A1s [Abrams tanks] and what we're gonna do is everybody's just gonna pay for M1A1s to go there – or Leopards [German tanks]. It doesn't matter. M1A1s or Leopard 1s or Leopard 2s. Rather than saying I have five of this and six of that. And let's just send them over.

Because that [variability of weapons systems and resulting impact on sustainment costs] is affecting Ukraine's capability to carry out offensives. So that affects the western side of this ammunition issue.

C-R Report: In terms of bolstering munitions production or just more generally in terms of providing military assistance to Ukraine, what recommendations of both of you make?

Tkach: There's a lot that the United States and its allies are doing that are really important. The first is just massive increase in funding. So the fact that, people who are generally interested in defense but are not artillery through enthusiasts, know that 155 millimeter are needed in Ukraine. That tells us about the prioritization that is ongoing, right?

I do think an important change is multi year contracts.

Giving a multi year contract alleviates a lot of the short term concerns for ammunition manufacturing. And that's really important because there's really no other market for ammunition? You don't get to spin this in a fun way. This is not the one where you're the business manager and you want to be assigned ammunition sales like, that's not what you want. So those multi-year contracts are really helpful from a structural standpoint, PPBE, the planning, programming, budgeting, and execution standpoint.

There's really smart people working on this. But one thing that I've seen missed in the analysis on munitions is that most of what PPBE is going to be accomplishing is trying to field the next generation of capability or the current generation of commercial capability in conjunction with U.S. forces and capabilities. Which is super important, but that's not really at the heart of what Ukrainians need.

The commander of the Joint Munitions Command said it really well. He said you have to think about it in the speed of steel, which is how do you actually fabricate metal in production munitions? Because you need the machine tools. You need the skill sets and you need to be able to execute that. And those machine tools, you know, some of them that we're using are from World War Two. And so, you know, making sure that we can use drones effectively or creatively to do sums (small, unmanned, many and smart). That's fantastic, but that's tomorrow's question, right, that's a Taiwan question. That's not necessarily a today question with Ukraine. So I think we need to think that through, but it is important to work and if they can streamline the acquisition process in any capacity, it's a win.

Hands down, the other is modernization. So the US has announced modernization, as in the McAllister Army plant. We're going to be putting in robots so that humans aren't mixing explosives, right? The private sector would have reached that 30 years ago, probably in their factories. So when you think about manufacturing cars, all the most dangerous jobs, we figure out ways to remove humans out of that. Those things, again, can't be understated because, the way we produce munitions in the United States, many of the facilities are government owned contractor operated. So those investments, while they do benefit the contractor operating them, they also benefit the industrial base and the United States broadly. And so those need to be looked at as US defense investment versus how it favors the current contractor.

We need to have better data on the entire business ecosystem that contractors are operating under.

You know they need to hire data scientists. They need to hire political scientists. We need economists in these facilities. We need program management. And it's not because they're doing a poor job. We want to echo that they've been effective for many years. They're doing a very tough job where you don't know what your budget is going to be the next year sometimes. And that is horrible. That's just tough. They're doing a good job. But if we're going to get serious about how to make this flexible, so that we can ramp up production, we need to know what facilities, what parts of facilities we could shut down, what parts of facilities we could idle, what parts of facilities have to be maintained, what is the workforce capability look like, what is the, what is the aging effect have on it, right? So we see this in all industries across the United States as baby boomers are leaving. What kind of skill sets are we losing?

We talked to an engineer at Boeing about this exact thing. They retired an engineer who was the only one who actually understood the part from the 1970s and the equipment. And now they have to go back to that person to be like, can you write a manual? And he's like, I'm retired. Right. But we need to make, we need to fabricate this well, so we need to think through what that looks like because ramping that production up is important.

We also talked about GOCO facilities.

Contractors can sell ammunition, excess ammunition above what contract is there and they should be able to, right. We gotta make sure that people can make money. That's an important feature of it. But we don't know what that amount should be.

For example, when you do other defense contracting there might be a set profit margin that can be on a particular contract or set contract structure that says this is all that you have. We need to take a step back and think through that from a munitions standpoint and actually work that into what we're thinking about. Another recommendation that we have that just builds on what the GAO has said is essentially the relationship between the contractors and the government owned facilities need to be better specified. So the GAO report from October or November of last year identified that most of the major GOCO facilities that they interviewed, multiple of them didn't have enough policies and procedures to know the answers to some of the questions that we’re raising here.

The next thing that needs to be done when we're analyzing this sector is thinking about high tech and low tech munitions. Again, the War on the Rocks article and a couple of others like the Foreign Affairs article and some of the others really concentrate on this differences. Because in our cases the industrial base is different and in some ways on high tech weapons, such as HIMARS, precision guided munitions, we want to protect the IP and we need the private sector to do what the private sector does from a national security standpoint.

A lot of changes won't happen there. It's really more about facilitating the existing contractor to be able to manufacture and sustain whatever it is that they're already producing. And the competition that comes in needs to be the same to spur innovation on what we call low tech or and some other spaces we'll call value market capabilities. This is gonna be the “speed of steel.”

This is the industrial base question where one thing that we talk about again in another piece is to think where are the bottlenecks?

In the production of, let's say, 155s, the hot item that everyone wants to talk about, there's a lot of others, right? What are the bottlenecks within those production lines? Because a lot of second and third tier defense suppliers, they’re sole source, or, you know, it's a small company that really doesn't have any other kind of competition.

DoD a couple years ago identified strategic suppliers as a potential long term weakness, in the midst of COVID. The realization that if your widget isn't produced, you can't make whatever it is and there's only one company that makes your widget right, you don't notice that until that company goes bankrupt or stops producing it. We need to be able to do that analysis for defense munitions from Stingers to HIMARS to artillery rounds.

If we don't make policy changes, we're gonna stop making ammunition, and then we're gonna have an event like Ukraine or Russia, and we won't be able to ramp up production because we don't have the industrial based capacity to do so. One way to go round that is for allies to contribute to that process directly in the industrial base.

C-R Report: Let’s stay on allied contributions to this process. Dr. Banerjee, I'll turn to you for this question. What role could international investment play, if any in catalyzing Western, especially US defense, industrial supply chains, manufacturing? In particular, something I'm wondering about is whether or not major, non NATO allies like Australia and New Zealand, but also potentially other countries such as Finland, Ireland, and Sweden could play in bolstering manufacturing production, both for artillery rounds but also maritime and A2AD capabilities?

Vasabjit Banerjee: Well, I think that again it's multi-tiered. So with high tech, where we are the pace setter, we don't want to just sort of give out intellectual property rights willy-nilly because that would harm our position, our defense industry’s position, but for low tech legacy systems for example I think joint production facilities where people make  some parts of it or they take US components and put it together or some combination could definitely be given to allies.

We also need to differentiate between allies and non-allies here because the legality in terms of international politics as well as intellectual property rights does matter. I have no issues with either non-NATO allies or treaty allies such as Japan, Australia, for example, who could be a sort of a core element where we have essentially a joint industrial base. Australia, New Zealand, United Kingdom, US and Canada could even encompass some of the latest technology.

So, there's that. But the lower tech stuff can be more spread out between the other allies, be it NATO or non NATO allies. And countries such as Turkey are very well positioned to take advantage of this situation because they have cheaper labor, they are already making F-16s, they have the capacity to make these legacy systems.

You need to sort of be able to say these are for allies and these are these other things are for quasi-allies. We also need to be careful about where they're coming from, which means that, for example, you cannot have an Australian company – I'm using Australia just as a hypothetical situation – with 30% Chinese stakes that are then investing in US defense production entity. We have to be very careful about that.

C-R Report:  As you both are very well aware, there's this pretty entrenched consensus that Taiwan needs to adopt a “Porcupine strategy.” Instead of procuring or even domestically producing high-end  ships and airplanes which are not very survival in a conflict with the PRC, Taiwan should instead procure a large number of small things such as anti-ship missiles, Stinger air defense systems, anti-ship mines, Javelins, and HIMARS. What role do you think foreign investment could play in accelerating the US industrial defense industrial base capabilities to produce Taiwan-specific munitions and capabilities?

Tkach: We each have slightly different opinions on it, but generally agree that Taiwan has to decide on a strategy. As you mentioned, there is a general consensus that it should be a porcupine approach.

But there are two different approaches to that. You have platforms: F16s, frigates, submarines and you know, mobile defense, right? The Harpoon missiles, stingers, mine layers, javelins, HIMARS. Those are very different industrial bases.

Let’s talk about the strategy of resistance and keep it in the Baltic context. If you're Latvia, Lithuania, or Estonia, Russia wants to conquer your country. They're going to do that fairly quickly. So you should develop your military as a resistance force, right? So instead of training your infantry with infantry tactics, you’re training your infantry for insurgency tactics, and you should buy munitions and capabilities that fit that strategy. Now it's very controversial, and I'm not sure I have a definitive opinion on it.

But that's one approach, right? That's that mobile defense survivability - you know, China lands and we have to be able to defend against the first barrage wiping out all the big platforms and we have to survive and be able to deliver a second strike. That's a very different industrial base than what is necessary to produce F16s, frigates, submarines, mine-laying ships.

We think of strapping harpoons onto the smallest, fastest ship possible. That's a very different strategy than saying, well, you know, we needed 10,000 ton frigate, and it will have the harpoons.

 So one thing that I do actually think needs to happen first is, what does Porcupine actually look like? Because there is general consensus, like you said, the capability has to be on the island first. It has to be survivable to a degree, and it has to be able to deliver a punch back response because 100 miles, you know, the currents are rough, the wind is rough. As we mentioned before, it's not an easy-sail of 100 miles, but it's also not an insurmountable distance.

And one thing that we'll have to think through on the industrial base is what weapons do they actually want and what weapons do they actually want to use because those are very different production structures. And if the US is to provide most of those munitions, then it becomes also a political question of what will get through Congress versus what is the best strategy for Taiwan to implement.

Because one of the things that we have seen, especially with Taiwanese spending, is Congress will authorize a tremendous amount of spending. It will go through foreign military sales approval. And then we don't have the weapons to actually send to them.

That might be telling us something about the difference in the industrial base and the current strategy.

Banerjee: Yeah, I think that's spot on. I'm not wholly sold on the Porcupine strategy. I'll be very honest with you because I do not think that China will not think about a couple of years of warfare before they launch an invasion.

If China's there for an invasion, they will throw everything at Taiwan. Anything that flies or moves or sails is going to go there. OK? They're not planning for a multi-front war for years.

One thing that is absolutely clear, which I think is not being stressed upon, is that if had Russia invaded Ukraine and captured Kyiv within a couple of weeks, the entire situation would have been different. There would be an acceptance of ground realities. Russia would have installed a friendly regime. There would be a government in exile or some such, and they'd make sort of rude noises at the United Nations once in a while, they’d fight for the UN seat. But it would be done. And that's a dark but open secret about it. So China would like to get this done as fast as possible. And 100 miles is not some insurmountable distance.

So the idea is what can be on the island before an invasion begins, especially if you're talking about naval and air blockades? And in quantity. The other thing that a lot of analysts are somehow not focusing on is that China won't wait until 2027 or 2030, - or given the delays 2030 or 2035 – when everything's delivered. It's not a tennis match where you wait for people to, you know, mop off their foreheads. It's war. You want to launch it when the window of opportunity exists.

So we need to rapidly scale up. The race is against time. To rapidly scale for Taiwan. So, who would be a good investment partner? One is Taiwan. They pay for their stuff, and we should deliver them.

But there are others who have the defense industrial base, South Korea, for example, has sold self-propelled howitzers, the K9 Krab, and the K2 tanks to Poland. It has also sold the K9 howitzers to India and they're good solid things. Japan can be involved in naval and aircraft manufacturing.

There is an article that I wrote for a small outlet out of National University, Singapore, with two other scholars about fostering a Taiwanese Indian defense relationship to enhance manufacturing of cruise missiles and ballistic missiles..

So India could also be asked to help in that effort with Taiwan.

So we could increase our industrial base, including two non NATO allies, Japan and Korea, in order to get things to Taiwan as soon as possible. Rather than just saying it. And that goes back to what Ben said right at the beginning, we need to know what Taiwan's strategy is. So we need to know what needs to be delivered, what they actually want. And I am of the opinion that once the Chinese land on the island, the game is up. Because we don't know how long a democratic society is going to tolerate massive amounts violence upon it.

It's an island. So once a naval blockade is imposed and an air blockade is imposed, we already know that Chinese missiles are capable of reaching Japanese forward bases, And  the US is dithering about putting fighter planes there, so you know how long will a completely isolated Taiwanese nation hold on thinking we'll fight it out until the last mountain. Sorry to ramble on about this, but you really hit a very sensitive spot.

C-R Report: You raise some interesting points. I hear what you’re saying, that we don’t know what Taiwan’s strategy will be. That being said, what can the US be doing now today to encourage, let's say, major non-NATO allies or even NATO allies, say, Poland, Estonia, Lithuania, Latvia to actually invest in the US Defense industrial complex? For a country that wants to essentially help the US industrial base invest in A2AD capabilities, what sort of constraints do they face?

Banerjee: I mean ITAR is is a constraint. We can write a book on it. Ben, please, take it away.

Tkach: So that's a political question. It's not an economics question. How would we want to design policies and market opportunities for foreign investment?

So when you we do foreign military sales there are often offsets where we are investing - not me I'm not doing anything, but the companies are investing in the country to set aside some of the purchase costs of the weapons for reinvestment. That can take different forms. This can be universities. This can be courses on avionics. This could be manufacturing facilities. It could be that a percentage of the product has to be made in that country. The offsets can take a lot of different forms.

These are outgoing flows from the United States out because we are the world's arms export largest exporter. We have final say, often on what technology, not just US technology, but allied or partner technology might be shared because if it has a US component. The US makes it very clear when the US doesn't approve of something.

Getting other partners who are not able to bring significant financial capacity to a deal, you're blending that market demand.

With the political demand, which is why we don't see it very often right, it's different.

What we might be able to do is push for this idea of a second production line. What can they do that contributes?

Making direct industrial collaboration a requirement in a contract or in a request for information? The US could do that if they wanted to prioritize that. And Five Eyes countries could then, as part of the condition, to compete for the bid, have to integrate one of those countries. Companies would have the industrial collaborations already in place to do that. If you just threw it out to any NATO country, say, Czechia, these smaller countries aren’t going to be competitive in doing that.

But they might be able to say to fit into the production line in a different way.

Banerjee: I would raise again the bifurcation dichotomy of the market, especially high end stuff.

We have to be very careful about foreign investments. Also very few countries are capable of making such foreign investments. The costs [of investments in high-end capabilities] alone are prohibitive, restricting it to Five Eyes and say non NATO allies such as Japan, perhaps South Korea.

But there are investments that can be made in terms of second supply lines.

Look, I'm just gonna level with you on this.

Russia is not going anyway.

Russia is there, Russia is worse off. Economically, Russia is isolated. It is in fact very similar to China in the 1950s, 60s and 70s.

And it’s junior partner now to China.

China is now the senior partner. It's a reversal of roles. Now, what would that mean? Analogies are imperfect. But if we have to learn from history, we see that Eastern Europe is going to be at the front lines of a standoff with Russia, which may in fact be more violent than a standoff with China, because China’s capacity is so much larger that a lot of things with China may be fait accompli. What happens in Thailand or Malaysia could be decided simply by the capacity of the Chinese economy and the military at its borders rather than the more contested sort of things that might happen in Latvia, Lithuania, Estonia, and Moldova where there are major ethnic Russian populations.

So in that case, if you need ammunition to reach the frontlines on time and you need plenty of them, and you need to tie in our NATO allies today, especially at the frontiers like the Baltic States. You know, what they could do is they could be part of what Ben is talking about: making second supply lines, especially of legacy systems and low tech systems.

And may I add something.

A lot of African, Asian, and a few Latin American countries, as well as parts of Eastern Europe also use legacy Soviet and Russian systems. These are now manufactured in Romania, Bulgaria, Czechia, Slovakia and I think Slovenia also makes some of these things.

They will continue to need to continue producing them because one of the ways that we can replace Russia in the international market and thereby reduce its global reach is by having NATO allies who are producing Soviet standard ammunition Russian standard ammunition.

Substitute them. Don't buy Russian, buy Romanian.

Benjamin Tkach: And the U.S. or NATO should certify product quality.

C-R Report: Unfortunately, that’s all we have time for. This has been wonderful. Thank you, Dr. Banerjee, Dr. Tkach.

Banerjee: Thank you so much.

Tkach: Appreciate it.

C-R Report: We’ll have to have you back. Cheers.

Related research from Dr. Banerjee and Dr. Tkach:

Dr. Vasabjit Banerjee is an Associate Professor in the Department of Political Science and Public Administration at Mississippi State University, where he teaches comparative politics and international relations. His primary research interests are insurgencies, civil-military relations, and state-formation.

Dr. Benjamin Tkach is an Assistant Professor in the Department of Political Science and Public Administration at Mississippi State University, where he teaches international relations. He has collaborated with the National Defense University, Joint Special Operations University, and U.S. Department of Energy. His primary research agenda investigates government decentralization, security privatization, and non-state actors' involvement in conflict processes.

The Coming Chinese Weapons Boom – Vasabjit Banerjee and Benjamin Tkach for Foreign Affairs

“Since American firms typically do not compete in the value arms market, Russia’s difficulties have created a vacuum. And the country poised to fill it is China. If left unchecked, Beijing could use defense equipment sales to build stronger relationships with ruling elites and to secure foreign basing, potentially restricting the U.S. military’s capacity to maneuver across the globe. Expanding Chinese arms sales would undermine U.S. influence in the ongoing geostrategic competition. But that outcome is not yet inevitable. There is still time for the United States and its allies to provide substitutes for Russian weapons at affordable prices and thus to thwart China’s ambitions.”

After Ukraine, Where Will India Buy Its Weapons - Vasabjit Banerjee and Benjamin Tkach for War on the Rocks

“Russia’s invasion of Ukraine has created a crisis for the country’s already weakened defense manufacturing sector, which will now struggle to export equipment in the near future. This will present India, the largest importer of Russian weapons, with a strategic dilemma. New Delhi will have to choose whether to continue importing arms from Russia in the long run and, based on that decision, what the best substitutes are in the meantime.”

Helping India Replace Russia in the Value Arms Market - Vasabjit Banerjee and Benjamin Tkach for War on the Rocks

“Russia has always been a major player in this [value arms] market, providing older-vintage or refurbished equipment to states that have often been neglected by Washington. But as a result of its invasion of Ukraine, Russia will increasingly struggle to meet the value market’s needs. This provides an opportunity for Washington to work with New Delhi to make sure that Russia’s role is filled by India, rather than by China.”

Amid Russia-Ukraine War, China Could Dominate the Value Arms Market - Vasabjit Banerjee and Benjamin Tkach for The Diplomat

If Russian arms exports decline in the wake of its invasion of Ukraine, China stands to benefit – unless the U.S. moves to prevent it. 

Joe Webster is a senior fellow at the Atlantic Council and editor of the China-Russia Report. This article represents his own personal opinion.

The China-Russia Report is an independent, nonpartisan newsletter covering political, economic, and security affairs within and between China and Russia. All articles, comments, op-eds, etc represent only the personal opinion of the author(s) and do not necessarily represent the position(s) of The China-Russia Report.