China in the Middle East
Vol. 2. No. 8. Feb. 25, 2023
From S.R.
For years, U.S. contractors have dominated the UAE's premier defense exhibition. This year in Abu Dhabi, Chinese companies took the spotlight. Read on.
He said. She said.
"It is the only trainer jet in the world that is equipped with a passive phased array radar, which is better than any other radars used on trainer planes.”
Chinese analyst Fu Qianshao promotes the L-15, ordered by the UAE.
Focus
UAE President Mohammed is greeted by Norinco’s Liu Dashan at IDEX. [Norinco]
The Big Splash
In the good old days of American hegemony in the Gulf, U.S. contractors such as Boeing, Lockheed Martin and Raytheon would clean up at the biannual defense extravaganza in the United Arab Emirates.
Today, China has become a major player in the UAE and Gulf defense market. Beijing proved that once again at IDEX-2023, the Abu Dhabi exhibition that pointed to a strategic shift in the UAE and other members of the Gulf Cooperation Council.
At IDEX, which marks its 30th anniversary and partnered with the state-owned Tawazun Council, Chinese state-owned companies signed major contracts to supply the UAE army and air force. The contracts this week promise to significantly expand China's defense presence in the emirates over the next decade.
Probably the most important contract was the sale of the L-15 multi-role aircraft by Aviation Industry Corp of China. AVIC said it signed an agreement to sell an undisclosed number of the new-generation jet. Neither the value of the contract nor the delivery schedule was released. In February 2022, the UAE said the Defense Ministry was negotiating for the delivery of 12 L-15s with an option for another 36 aircraft.
The L-15 marks a strategic shift for the UAE, which for decades had been dependent on British and U.S. platforms. But Abu Dhabi has been moving steadily to diversify suppliers both for political and defense reasons.
The defense reason is not hard to figure out. The UAE has long been upset by the U.S. refusal to transfer technology of its top fighter-jets, radar and missile systems. Washington has cited concerns of proliferation, particularly to neighboring Iran, but the Emiratis see this as more of preventing UAE coproduction of advanced weapons. At IDEX, U.S. executives spent much of their time promising that they would obtain Washington's permission for training and coproduction.
"We are working in concert with the U.S. government and our customers in the Middle East to build the tight partnerships that will ensure our mutual success," said Jeff Shockey, a senior vice president at Raytheon Technologies.
In contrast, the Chinese have promised all the technology transfer and coproduction. Therefore, the L-15 could mark one of the biggest steps by the UAE to turn into a manufacturer of combat aircraft as well as move away from Western platforms.
The twin-engine L-15 has been branded as a do-all aircraft. Designed to contain advanced fire control radar, munitions and air-refueling, it can serve as a light combat plane. It can be used for training toward fourth- and fifth-generation fighter-jets. The UAE has been looking for a fifth-generation fighter, including the F-35 by L-M, but Washington has been dragging its feet.
On Feb. 22, Fu Qianshao, a Chinese aviation analyst, said the L-15 can engage such U.S. fighter-jets as the F-16 or F/A-18 in low-altitude scenarios. He said the L-15 has joined South Korea's T-50 as the only two supersonic trainer planes in the market.
"It is the only trainer jet in the world that is equipped with a passive phased array radar, which is better than any other radars used on trainer planes," Fu said.
There would be no reason to buy an L-15 to train for the F-35. What is a more likely scenario is that the L-15 will introduce the UAE to Chinese military aircraft, its capabilities and options for coproduction. The next step could be a joint UAE-Chinese fighter meant to rival America's best -- the F-22 Raptor. At IDEX, the Chinese were briefing UAE and other visitors on the FC-31 stealth fighter-jet, expected to soon enter service in the Chinese Air Force.
Another draw for Gulf air forces has been the Y-20 large transport plane by AVIC. The Y-20 was expected to garner major sales in wake of the halt in production of the U.S. C-17 and problems with Russia's Il-76.
But the L-15 was not the biggest deal announced at IDEX. China North Industries Corp., or Norinco, won a $245 million contract for the AR3 multiple launcher rocket system and in-country services. The contract was won through its UAE partner, International Golden Group, and marks the first known export order of the platform.
Norinco was the largest exhibitor at the Chinese pavilion and set a record for IDEX. On Feb. 21, UAE President Mohammed Bin Zayed Al Nahyan visited Norinco's booth, shared with International Golden Group.
“The [Tawazun] Council seeks to maximize value for money through innovative budgeting and acquisition systems, sustain technology and innovation to support national industry needs, secure defense and security industry through robust regulations and accelerate ecosystem growth by nationalizing key acquisitions and capabilities, driving local content and creating in-country value," Tawazun spokesman Majed Ahmed Al Jaberi said.
Ticker Tape
...China is expected to sign major energy and other deals with Gulf Arab states. BloombergNEF said the contracts will be inked by China's Sinopec with Oman and Qatar. In 2022, Doha signed the largest liquefied natural gas deal with Sinopec. In a report in January, BNEF said Beijing was seeking additional resources amid the current energy shortage. Analysts said Chinese buyers are selling surplus LNG to the highest bidders in Asia and Europe.
...Iran has been urging China to help in manufacturing and technology. Iranian Industry and Trade Minister Reza Fatemi Amin said Teheran needs China's expertise in a range of fields. In an interview on Feb. 20 with Iranian television, Amin said he hoped that cooperation and trade with Beijing would significantly increase over the next year. In mid-February, the two countries signed 20 cooperation agreements during Iranian President Ebrahim Raisi's visit to Beijing.
...Speaking of trade, China has been Iran's largest trading partner for 10 consecutive years. The Chinese Commerce Ministry said bilateral trade in 2022 reached $15.8 billion, up seven percent from the previous year. Ministry spokesman Shu Jueting said Iran and China have agreed to deepen economic cooperation and trade, and that Beijing would import additional "high-quality products." Shu also said Iran would become more engaged in China's Belt and Road Initiative as well as the Shanghai Cooperation Organization.
...A young organization has been promoting Chinese trade and technology to the Arab world. The Africa-China Cooperation Association for Development in Morocco has brought such Chinese technology as seawater desalination, mining and a range of equipment since 2018. Association president Nasser Bouchiba said his group sought to take advantage of China's opening of its economy as well as the strategic partnership between Beijing and Morocco. Bouchiba, who spent 20 years in China, has established an investment company with Chinese partners to export new technology to Africa and the Middle East. He said the next step is to establish an industrial zone for delivery of Chinese equipment to Morocco.
...China has stepped in to prevent a foreign exchange crisis in Pakistan. The China Development Bank has approved $700 million in financing for the State Bank of Pakistan to help the nation's foreign exchange reserves, money expected to arrive imminently. Islamabad, one of Beijing's closest allies, has also been pressing for Chinese banks to refinance their loans -- which amount to some $2 billion. Beijing was approached for help after the International Monetary Fund conditioned aid to the securing of additional external financing by Pakistan.