(Fixes the paragraph about MTU promotional brochures, to
clarify the phrase "310,000 hours in operation," by removing the
* Much of China's naval fleet powered by European diesel
* EU arms embargo doesn't cover dual-use technology
* Lucrative trade in dual-use components from Europe
* Germany's MTU supplies state-of-art engines for China's
* China's whisper-quiet submarines pose biggest threat to
By David Lague
HONG KONG, Dec 19 If the People's Liberation
Army went to war tomorrow, it would field an arsenal bristling
with hardware from some of America's closest allies: Germany,
France and Britain.
Most of China's advanced surface warships are powered by
German and French-designed diesel engines. Chinese destroyers
have French sonar, anti-submarine-warfare helicopters and
Above the battlefield, British jet engines drive PLA fighter
bombers and anti-ship strike aircraft. The latest Chinese
surveillance aircraft are fitted with British airborne early
warning radars. Some of China's best attack and transport
helicopters rely on designs from Eurocopter, a subsidiary of
pan-European aerospace and defense giant EADS.
But perhaps the most strategic item obtained by China on its
European shopping spree is below the waterline: the
German-engineered diesels inside its submarines.
Emulating the rising powers of last century - Germany, Japan
and the Soviet Union - China is building a powerful submarine
fleet, including domestically built Song and Yuan-class boats.
The beating hearts of these subs are state-of-the-art diesel
engines designed by MTU Friedrichshafen GmbH of Friedrichshafen,
Germany. Alongside 12 advanced Kilo-class submarines imported
from Russia, these 21 German-powered boats are the workhorses of
China's modern conventional submarine force.
With Beijing flexing its muscles around disputed territory
in the East China Sea and South China Sea, China's
diesel-electric submarines are potentially the PLA's most
serious threat to its American and Japanese rivals. This deadly
capability has been built around robust and reliable engine
technology from Germany, a core member of the U.S.-led North
Atlantic Treaty Organization.
Arms trade data from the Stockholm International Peace
Research Institute (SIPRI) to the end of 2012 shows that 56
MTU-designed diesels for submarines have been supplied to the
"They are the world's leading submarine diesel engines,"
says veteran engineer Hans Ohff, former managing director of the
Australian Submarine Corporation, the company that built
Australia's Collins-class conventional submarines.
MTU declined to answer questions about transfers to the
Chinese navy, future deliveries or whether it supplies technical
support or servicing. "All MTU exports strictly follow German
export laws," a company spokesman said.
CHINA'S MILITARY MARKET
The Chinese defense ministry says the PLA's dependence on
foreign arms technology is overstated. "According to
international practice, China is also engaged in communication
and cooperation with some countries in the area of weaponry
development," the ministry said in a statement responding to
this series. "Some people have politicized China's normal
commercial cooperation with foreign countries, smearing our
Transfers of European technology to the Chinese military are
documented in SIPRI data, official EU arms trade figures and
technical specifications reported in Chinese military
These transfers are crucial for the PLA as it builds the
firepower to enforce Beijing's claims over disputed maritime
territory and challenge the naval dominance of the U.S. and its
allies in Asia.
China now has the world's second-largest defense budget
after the United States and the fastest growing military market.
Many of Europe's biggest defense contractors have been unable to
resist its allure. High-performance diesels from MTU and French
engine maker Pielstick also drive many of China's most advanced
surface warships and support vessels, SIPRI data shows.
Pielstick was jointly owned by MTU and German multinational Man
Diesel & Turbo until 2006, when Man took full control.
Some military analysts remain skeptical about the quality of
China's military hardware. They say the engines and technology
the PLA is incorporating from Europe and Russia fall short of
the latest equipment in service with the United States and its
allies in Asia, including Japan, South Korea and Australia. This
leaves the PLA a generation behind and struggling to integrate
gear from a range of different suppliers, they say.
Others counter that China doesn't need to match all of the
most complex weapons fielded by the United States and its
allies. Even if it deploys less than the best gear, Beijing can
achieve its strategic goal of blunting U.S. power.
"At what point do they become good enough?" says Kevin
Pollpeter, a specialist on Chinese military innovation at the
University of California Institute on Global Conflict and
Cooperation at San Diego. "If they have sufficient quantities of
good-enough weapons systems, maybe that will carry the day."
LIMITS OF EMBARGO
Russia remains China's most important outside source of arms
and technical assistance. The Chinese navy's best-known vessel -
its sole aircraft carrier, the Liaoning - was purchased from
Ukraine. A U.S. Navy vessel nearly collided with a Chinese
warship last week while maneuvering near the Liaoning, during a
time of heightened tensions over Beijing's recent declaration of
a new air-defense zone in the East China Sea.
European hardware and know-how fills critical gaps, however.
It wasn't supposed to play out this way.
The European Union has had an official embargo on arms
shipments to China since the 1989 Tiananmen crackdown.
Washington imposes even tighter restrictions on transfers of
U.S. military technology to China, inspiring energetic efforts
by Beijing to smuggle American gear and know-how. Europe's
embargo, however, has been far more loosely interpreted and
enforced. Thus weapons and, perhaps more importantly for the
PLA, dual-use technology have steadily flowed from America's
European allies to China.
EU arms makers have been granted licenses to export weapons
worth almost 3 billion euros ($4.1 billion) to China in the 10
years to 2011, according to official figures from Brussels
collated by the London-based Campaign Against Arms Trade. EU
governments approved the sale of aircraft, warships, imaging
equipment, tanks, chemical agents and ammunition, according to
Michael Mann, an EU spokesman in Brussels, said the EU arms
embargo issued in June 1989 "does not refer to dual use goods."
It is up to individual member states to exercise control over
such goods, Mann said.
From China's perspective, France and the UK interpret the
arms embargo most generously, mostly blocking only lethal items
or complete weapons systems. France was by far the biggest EU
supplier, accounting for almost 2 billion euros of these
licenses. The United Kingdom ranked second with almost 600
million euros, followed by Italy with 161 million euros. The
value of weapons actually shipped is difficult to extract from
the data because some countries, including the UK and Germany,
don't report these figures.
The value of German export licenses for weapons was a
relatively modest 32 million euros in the decade to 2011.
However, EU arms trade figures don't include dual-use technology
that in many cases can be sold without licenses. Examples of
such technology include many kinds of diesel engines. The same
applies to transfers of commercial aerospace design software
that can be used for fighters, bombers and unmanned aerial
Arms industry experts say dual-use transfers are almost
certainly more valuable to the PLA than the actual weapons
Europe has delivered. But it's impossible to calculate a hard
number for European-Chinese trade: The EU lacks a consistent
system for tracking these transfers amid the vast flow of goods,
services and intellectual property to China. Europe shipped
goods worth 143.9 billion euros to China in 2012, according to
EU trade statistics.
Critics of the EU's arms trade with China say member states
have failed to devise a system to enforce the embargo. They say
this reflects the loose structure of the EU, where each member
state interprets the restrictions differently according to
domestic law, regulations and trade policies.
Geography plays a role, too: The distance between Europe and
Asia means there is ambivalence about the rapid growth of
Chinese military power. From Europe, China looks like an
opportunity, not a threat.
The embargo is nevertheless an embarrassment for Beijing;
senior Chinese officials routinely call for it to be lifted, and
pressure from Washington keeps it in place. That means the sale
of complete weapons like the pan-European Eurofighter, German
submarines or Spanish aircraft carriers remain impossible for
the foreseeable future.
In the meantime, Europe has discovered a lucrative trade
selling components, particularly if they incorporate dual-use
technologies that fall outside the embargo.
"Nobody sells entire weapons systems," says Otfried
Nassauer, director of the Berlin Information Centre for
Transatlantic Security and an expert on Germany's arms trade.
"But components, especially pricey high tech components, that
Under Beijing's long-term policies to promote innovation,
domestic arms makers are encouraged to import the foreign
technology that China lacks. The challenge is to adapt this
range of components and know-how into locally built weapons.
One example is how German engine makers have contributed
technology to support China's expanding fleet of support vessels
that monitor satellites and missiles.
Man Diesel & Turbo last year announced it would supply
engines built under license in China for two new transport
vessels for the China Satellite Maritime Tracking and
Controlling Department, part of the PLA's General Armament
Department (GAD). The GAD oversees weapons research and
development and manages all of China's military and civilian
space operations, including the tracking of satellites and
missiles. The European engine maker will also supply gear boxes,
propellers and propulsion control systems for the ships from its
Danish manufacturing unit, it said.
A spokesman for Man Diesel & Turbo said about 250 of its
engines had been made under license in China and supplied to the
Chinese navy. The company also provided some selected services
and spare parts including fuel equipment.
"All our business does fully comply with the applicable
export control or embargo regulations set by Germany and the
European Union," the spokesman said. He added that Pielstick
brand engines supplied to the PLA navy by Chinese licensees were
not subject to export approval. "None of these engines is
specifically designed for military purposes," he said. "There is
a broad variety of civil applications for these engines, too."
Reliable submarine engines top Beijing's shopping list, and
China's navy has good reason to want the best.
In the late spring of 2003, a disabled Chinese submarine was
found drifting, partly submerged, in the Bohai Sea off China's
northern coast. When the boat was raised, rescuers found all 70
of its crew dead. Their deaths were blamed on "mechanical
difficulties," according to reports at the time in China's
state-controlled media. The outcome of any inquiry was never
Since then, submariners all over the world have speculated
about what went wrong aboard Ming class submarine number 361, a
Chinese copy of an obsolete Russian design. Most agree it was
probably a fault with its diesels. The engines either didn't
shut down immediately when the submarine submerged, sucking the
oxygen out of the hull in minutes, or the suffocating exhaust
vented internally rather than outside the hull. Either way, the
outcome was catastrophic.
It was one of Communist China's worst peacetime military
disasters, and the navy chief and three other senior officers
were sacked. But the People's Liberation Army navy was already
taking delivery of diesels from MTU. Engineers at the Wuchang
Shipyard on the Yangtze River were fitting these power plants in
China's first indigenously designed and built conventional
submarines, the Song class.
MTU is a unit of Germany's Tognum Group, which is jointly
owned by UK-based multinational Rolls Royce Group PLC and
Germany's Daimler AG. Contracts with the PLA and powerful
defense manufacturers give MTU and its parent influence in
competing for contracts in China's massive civilian market.
China's biggest arms maker, China North Industries Group
Corporation, or Norinco, has been making MTU engines under
license since 1986.
In 2010, Tognum opened a joint venture with Norinco to
assemble large, high speed MTU diesel engines and emergency
generators at a plant in the city of Datong in Shanxi Province.
A major goal of the joint venture is to win orders for emergency
backup generators for China's expanding roster of nuclear power
plants, Tognum said in a press statement. MTU engines are also
built under license at the Shaanxi Diesel Engine Heavy Industry
Co Ltd, a subsidiary of one of China's two sprawling military
and commercial shipbuilders.
Submarine diesel technology is hardly new, but these engines
are built to exacting standards to ensure reliability under
extreme conditions. MTU has been building them for more than 50
years. The engine delivered to China for the Song and Yuan
classes, the MTU 396 SE84 series, is one of the world's most
widely used submarine power plants. Each of the Chinese
submarines has three MTU diesels, according to technical
specifications listed in Chinese military affairs journals and
China's military is reluctant to acknowledge the role of
foreign technology in its latest weapons, preferring to
recognize the performance of its domestic designers and arms
makers. But articles in maritime magazines and naval websites
have credited the close relationship between MTU and China's
domestic industry for providing the Song class with "the world's
most advanced submarine power system."
In its promotional brochures, MTU says almost 250 of these
engines in service with submarines around the world have racked
up over 310,000 hours in operation. Some have also been fitted
to nuclear submarines as back-up power plants, the company says.
MTU also sells different versions of the 396 series for use in
locomotives, power generation and mining.
A spokesman for the Federal Office for Economics and Export
Control (BAFA), the German authority that has to approve
dual-use exports, said exports of diesel engines built
especially for military use would be illegal. Engines that can
be used for both civilian and military purposes would have to be
approved by BAFA, he said - and in the case of China, such
dual-use engines "would probably not be approvable." He declined
to comment specifically, however, about the MTU diesel engine
sales to China's navy.
Top quality diesel engines like the MTU designs minimize
vibration and noise, reducing the risk of detection by enemy
sonar. In the hands of a capable crew, modern diesel submarines
can be fiendishly difficult to detect. When using their electric
motors, they are significantly stealthier than nuclear
submarines such as those in service with the United States,
naval warfare experts say. For a relatively modest investment, a
diesel electric sub could sink a hugely expensive aircraft
carrier or surface warship.
With whisper-quiet engines, China's best conventional
submarines armed with modern torpedoes and missiles may pose the
biggest danger to any potential adversary - including the U.S.
Navy. Beijing's naval strategists are banking on their growing
fleet of subs to keep the Americans and their allies far away
from strategic flashpoints in the event of conflict, such as
Taiwan or disputed territories in the East China Sea and South
That means the Pentagon's favored method of modern warfare -
parking carriers near the coast of an enemy and conducting
massive air strikes - would be very risky in any clash with
The PLA navy has already demonstrated this capability. In
2006, a Song class submarine shocked the U.S. Navy when it
surfaced about five miles from the U.S. aircraft carrier Kitty
Hawk, well within torpedo range, in waters off the Japanese
island of Okinawa. The Chinese boat had been undetected while it
was apparently shadowing the U.S. carrier and its escorts, U.S.
officials later confirmed.
PLA submarines are becoming much more active. Recorded
Chinese submarine patrols increased steadily from four in 2001
to 18 in 2011, according to U.S Naval Intelligence data supplied
in response to freedom of information requests from a Federation
of American Scientists researcher, Hans M. Kristensen.
A senior U.S. Navy official declined to comment on German
delivery of diesel engines to China, but said the United States
is well aware of the challenges such submarines pose. "Diesel
engines are notoriously difficult to detect, but we are also
always investing in improving own capabilities to make our
submarines quieter," the official said.
(Additional reporting by John Shiffman in Washington and Sabine
Siebold in Berlin. Edited by Bill Tarrant and Michael Williams)