So, we dealt a little bit with the naval problems in the relationship. Now, we also got some more ammunition on the aerial part of the relationship. But to start of, we will go for a little lighter piece of news.

MOSCOW. June 6 (Interfax-AVN) – A plan is being developed for the
Chinese aircraft manufacturing industry to invest in a project to
develop a training aircraft on the basis of the Yakovlev Yak-152, a
Russian defense industry source said.
An agreement with China to that effect “is expected within the next
few months,” the source told Interfax-AVN.
The plane would be fitted with a piston engine.

So, as you guys might have figured out from my past post, I’m not the biggest fan of Hongdu. This is another reason why I just cannot respect this company in spite of its success with K-8 exports. We know that L-15 has turned into a total failure up to this point. In some degree, it’s excusable to struggle in developing an advanced trainer. However, they can’t even get a basic trainer developed. They have to basically pay the Russians to develop an aircraft for them. That is just so sad. Even after all of China’s recent success in aircraft development, they can’t develop this simple aircraft.

Now, let’s turn our attention back to J-11B and IL-76. It appears that Sukhoi’s General Director has announced J-11B is not an illegal copy of su-27. You can find the video report of the news report in Chinese here. There is probably also some Russian reports on this. I’m sure it will soon propogate to more prominent news sources. From the beginning, I thought the Russians were just trying to get some money out of this. From sources I read so far, it seems like the Russians probably got some concessions (other contracts) from China in exchange for dropping this complaint. I think at the end of the day, it’s better for both side to achieve some level of satisfaction and put this behind them. The bilateral relationship is way too important to be marred by this argument.

IL-76 issue is also getting close to being resolved according to this PKF Article. Now, this is a Kanwa article, so you will have to take it at its face value. It’s easy to see the bias in this article. When Indians are considered to do the normal and reasonable thing to bend to the Russian blackmail over the entire Gorshkov fiasco, the author looses all credibility. There is no question that China got a good deal when the original IL-76 contract was signed, but that doesn’t excuse the Russians. As a basic business practice, you must fulfill a contract regardless of how bad it may look to you. The Southwest airline got a deal where it’s buying oil at $55 a barrel for 3 years. I suppose if it signed that deal with the Russians, the contract would be torn up by now. Normally, when a side cannot complete the contract in time, it will be penalized under the terms of the agreement. Not only do the Russians not offer compensation for violating the agreement, they expect extra compensation?

I wonder what the chances are for China to buy IL-76 if they anticipate the domestic copy will be ready in 5 years and this new factory is clearly not ready for production yet. If it takes 3 years to get the contract signed and equipments purchased. And then the first IL-76 come off the production line will already be around 2011-2012, would this deal be worth it? Pinkov certainly assumed right from the beginning that PLAAF can only get the plane from the Russians. I’m sure the Russians did the same way, so they expected China to eventually bend on this issue. It has probably caught them by surprise that China has held out this long over this issue. I think this deal has a chance of being revived if the Russians can offer a transport with better price/performance ratio than what SAC is capable of. PLAAF may still order 20 of the so called IL-476 if the price does not get out of hand. Either way, this is one deal that will forever harm the Chinese/Russian military relationship.