Blades of glory: China and Russia team up to build world’s heaviest-lifting chopper amid raft of billion-dollar deals on defence, energy

Russian conglomerate Rostec says two countries are building a ‘strategic partnership’ as deals in private and public sectors proliferate

PUBLISHED : Tuesday, 27 October, 2015, 12:50am
UPDATED : Tuesday, 27 October, 2015, 2:48pm

Russian state-owned conglomerate Rostec said this week it is building a “strategic partnership” with China and that numerous deals have already been signed with Chinese state-owned and private companies.

These include a US$10-billion deal to develop Russia’s coal-storage facilities, a new partnership with Chinese telecoms giant Huawei, and plans to build a heavy-lifting helicopter with unprecedented carrying capability.

“In Africa and Arabic countries, we only sell product. In Europe and the US we sell product and technology. In China, we create collaboration,” said Rostec spokesperson Vasily Brovko.

Rostec, an abberviation of Russian Technology, controls hundreds of companies from helicopter and engine maker United Industrial Defence Cooperation to engineering company Technopromexport, which builds energy facilities in Russia and overseas.

The conglomerate was established in 2007, bringing together 663 entities to promote development in high-tech industries. China already ranks as one of its major customers.

Last year, China was the second-largest buyer of Rostec’s military equipment, snapping up 22 per cent of its defence-related products including choppers, military vehicles and combat gear.

In May, Rostec signed a cooperative agreement with Chinese telecoms giant Huawei to develop and implement IT solutions together in Russia.

“Huawei wants to enter Russia’s market. We both have telecommunication technology and we are finalising our negotiations now,” said Brovko.

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Rostec has also signed deals with Chinese smartphone maker ZTE, one of Huawei’s top competitors, to create new entities focussed on developing intelligent transportation systems and other smart products.

Rostec said the scope of the agreement with ZTE, which was signed this March, was expected to reach 1.2 billion yuan (US$189 million).

China has much demand for Russia’s energy. Rostec and China’s Shenhua, the world’s largest coal producer, signed a US$10 billion deal last month to develop a Russia’s coal deposits, which are expected to soon reach annual output of 30 million tonnes.

The deal extends to power plant construction.

“It is not just about selling and buying,” said Brovko.

“We will use both countries’ technology to build infrastructure.”

Rostec is Russia’s major producer of military and civil helicopters, and its second-largest defence contracter.

One of the companies owned by Rostec, Russian Helicopters, is working with a Chinese partner to develop a heavy-lifting helicopter that may one-up the Mi-26, a world-leading model produced by the same company.

“The helicopter [in development] is only for the Chinese market. I don’t know why China would need an even bigger helicopter [than the Mi-26], but if you need it, we can build it”, Brovko said.

He added that there are risks involved in doing business with China these days, one of which is having technology copied.

“If we sell a product to China, it would probably deconstruct it, research everything and design its own version,” he said.