China mulls buying Russian submarines

State arms exporter Rosoboronexport has signed a framework agreement
with China on the joint development and construction of four non-nuclear
Amur-1650 conventional submarines for the Chinese Navy, a news report
said Thursday.

The final contract is tentatively worth $2 billion and is expected to be signed
by the parties no earlier than 2015, Kommersant reported.

The agreement stipulates for two of the submarines to be built in Russia and
two in China, with special provisions in place in the contract to ensure that no
intellectual property is copied from the Russian side, a source close to
Rosoboronexport told the business daily.

An additional agreement for the first stage of work could be signed by the end
of the year, he said, adding that a Russian contractor had not yet been selected
for construction of the submarines.

China may become the first buyer of the Amur-1650 submarines, beating out
India and Venezuela, both of which previously expressed interest, Kommersant

Another source close to the arms exporter said the submarine contract "is very
important for Russia and tops the presidential list of projects with China."