China said to be negotiating arms deals with Saudi Arabia and Egypt

The Middle Eastern countries seek to diversify weapons supply amid Ukraine war and tensions with Washington, according to intelligence service
Riyadh eyes air defence systems and drones as part of possible yuan-based deal while Cairo plans to buy J-10C fighter jets, report says

China’s military

Jane Caiin Beijing

Published: 10:30pm, 24 May 2023

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China is reportedly in talks with Saudi Arabia and Egypt for major arms deals as the countries seek to diversify their weapons supplies to become less reliant on the United States and Russia.

Saudi Arabian Military Industries (SAMI) is currently in talks with China North Industries Group Corporation (Norinco), a state-owned defence company, to buy weapons ranging from reconnaissance drones to air defence systems, according to Tactical Report, a Beirut-based intelligence service focused on the Middle East.

Weapons involved in the potential deal include the Sky Saker FX80 unmanned aerial vehicle (UAV), the CR500 vertical take-off and landing (VTOL) UAV, the Cruise Dragon 5 and 10 – two types of loitering munitions, better known as suicide drones – and the HQ-17AE short-range air defence (SHORAD) system, the service reported last week.

The HQ-17AE SHORAD is the latest addition to the deal, which has been in negotiations for about a year, and talks have “reached an advanced stage”, Tactical Report said, quoting unnamed sources close to the situation.

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Negotiations are expected to continue until the end of this year or the beginning of next year, the report said, adding there were rumours that the entire deal would be financed in the Chinese yuan.

In another report published on Monday, Tactical Report said Egypt was in talks with China to acquire the Chengdu J-10C multirole fighter.

To further talks started late last year, a delegation from the Egyptian Air Force is expected to meet representatives from the Chengdu Aircraft Industry Group on the sidelines of the Langkawi International Maritime and Aerospace Exhibition in Malaysia this week.

During the meeting, the Chinese company will reveal the latest improvements on the J-10C, including its advanced electronic warfare system and active electronically scanned array (AESA) radar, as Egypt is said to be eyeing 12 of the fighter jets, the report said, quoting anonymous sources.

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While the United States remains the world’s top weapons exporter, analysts said China had emerged as an alternative supplier because it offered affordable advanced weapons without political strings attached.

“China is willing to sell hi-tech weapons equipment to friendly nations without political terms, which I think is the main appeal to the Middle East,” said Song Zhongping, a former People’s Liberation Army (PLA) instructor.

As the world’s biggest defence spender, Saudi Arabia has sourced weapons from a variety of countries, though mostly from the US.

But Riyadh is looking to diversify its weapons sources amid increased tensions with Washington following the death of journalist Jamal Khashoggi in 2018 and in light of last year’s Opec+ oil dispute.

Chinese media reported last year that Saudi Arabia bought US$4 billion worth of weapons from China – much more than their previous arms deals – after the Zhuhai air show in November.

“Financing the deal with the Chinese yuan could help eliminate the influence of the US dollar, preventing the US from using the currency as a tool for suppression and restriction,” Song said.

Why is Saudi Arabia looking to China to buy weapons?

According to data from the Stockholm International Peace Research Institute, the five largest arms exporters in 2018-22 were the United States, Russia, France, China and Germany. Together they supplied 76 per cent of the world’s arms exports.

During the five-year period, the US supplied 40 per cent of global arms exports, with the main recipients being Saudi Arabia, Japan and Australia. China accounted for 5.2 per cent of global weapons exports, with Pakistan, Bangladesh and Serbia as the top recipients.

Egypt, which is in the midst of a maritime dispute in the eastern Mediterranean with neighbouring Libya, was ranked sixth by share of global arms imports for 2018-22 after India, Saudi Arabia, Qatar, Australia and China.

Egypt has mainly sourced arms from Russia, France and Germany, but it is looking to China as the war in Ukraine has restricted Moscow’s ability to manufacture military hardware for clients, according to analysts.

Additional reporting by Laura Zhou