China arms sales make global inroads

POISED TO SOAR: Members of the Aviation Industry Corporation of China with a model of the JF-17 jet, at an exposition in Beijing last month. China is believed to be the fifth-largest arms exporter in the world.


    Oct 22, 2013

    China arms sales make global inroads

    FROM the moment Turkey announced plans two years ago to acquire a long-range missile-defence system, the multi-billion-dollar contract from a key North Atlantic Treaty Organisation (Nato) member appeared to be a United States company's to lose.

    For years, Turkey's military had relied on Nato-supplied Patriot missiles, built by the US companies Raytheon and Lockheed Martin, to defend its skies.

    There were other contenders for the deal, of course. Rival manufacturers in Russia and Europe made bids. Turkey rejected those - but not in favour of the US companies.

    Its selection last month of a little-known Chinese defence company, China Precision Machinery Export-Import Corporation, stunned the military-industrial establishment in Washington and Brussels.

    Industry executives and arms-sales analysts said the Chinese probably beat out their more established rivals by significantly undercutting them on price, offering their system at US$3 billion (S$3.7 billion).

    Nonetheless, Turkey's selection of a Chinese state-owned manufacturer is a breakthrough for China.

    "This is a remarkable win for the Chinese arms industry," said Mr Pieter Wezeman, a senior researcher at the Stockholm International Peace Research Institute, which tracks arms sales and transfers.

    In the past, Chinese companies have been known mainly as suppliers of small arms, but that is changing quickly. Be it drones, frigates or fighter jets, the companies are aggressively pushing foreign sales of high-tech hardware to other nations.

    The Stockholm institute now estimates that China is the fifth-largest arms exporter in the world.

    Mr Marwan Lahoud, the head of strategy and marketing at European Aeronautic Defence & Space, estimated that China was still a decade away from competing head-to-head with Western nations in terms of technology.

    But Chinese equipment is priced lower and could become popular in emerging markets, including in African and Latin American nations.

    "We are in an era of 'good enough' - the 90 per cent solution that will do the job at the best possible price," said Mr Guy Anderson, a senior military-industry analyst in London with IHS Jane's.