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Why China Can Sell High-Tech Weapons at Low Cost
November 21, 2019
Chengdu-J-10B
Chengdu Aircraft Corporation J-10B. Photo Credit: News QQ

Why China Can Sell High-Tech Weapons at Low Cost

In contrast to most countries – with the lone, but tentative exception, of the U.S. – China has successfully been able to distribute its research and development (R&D) overhead across many production units.

This ability to persistently achieve scale enables China to iterate upon existing weapons while also flexibly work for new technologies, such as rail-guns.

The inability to achieve scale means that the sunk cost of R&D has to be distributed across fewer units, resulting in a higher actual unit-cost of the procurement.

To China’s credit, it is well-positioned to repeatedly execute high-tech development.

By virtue of its sheer size in terms of territory, population, urban development and infrastructure construction (within and beyond China), the incentive and ability to do so is in place.

China can leverage R&D and experience used for civil development for military gain.

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