Announced by President Xi Jinping in 2013, the belt and road meaning (BRI) has gradually come to assume the status as China’s flagship global development strategy. While Beijing stresses the peaceful developmentalist dimension of the initiative, analysts have alluded to the potential geopolitical agenda behind this multi-sectoral effort that has been expanded to China’s grand periphery, including vast parts of Latin America, the Middle East and Africa. As Chinese capital increasingly penetrates markets in the Global South, policy makers in Beijing have realised the need to ensure security of Chinese citizens and entities abroad. In the meantime, China has become a leading international arms exporter. Data from the Stockholm International Peace Research Institute (SIPRI) suggests that Chinese defence companies are among the largest globally, making China the second-largest arms producer behind the United States and ahead of Russia. These structural changes are driven by two simultaneous processes: (a) an increase in demand from countries along the BRI, particularly in the Middle East and Africa, which endeavour to modernise their defence capabilities; and (b) changes in supply, as Chinese companies are increasingly exporting high technology weapons systems abroad. One noticeable trend relates to the export of Unmanned Aerial Vehicles (UAVs). As will become evident, UAVs have been part of an attempt to develop and consolidate diplomatic relationships with recipient states, resulting in a strategic disadvantage for established Western players, including the United States.
This Strategic Update investigates the diplomatic and security implications of China’s outward expanding defence industry by focusing particularly on the case of Unmanned Combat Aerial Vehicles (UCAVs), which can be used for military and security purposes. This gives insight into the implications of China’s modernising defence industrial base for international arms transfers and security along the BRI, a topic of immense future relevance. The latest SIPRI data was triangulated with expert opinions and available literature. The first section contextualises a more outward facing Chinese defence industry amidst the BRI and growing bilateral security engagement. It reflects on the geopolitical significance of these developments in the context of China-US competition. The second section focuses on operationalisation and explains the security implications and reliability issues of Chinese equipment.
As becomes evident from the above visualisation, export patterns of Chinese UCAVs reflect a turn towards the Middle East and Africa. These developments should be interpreted against the evolution of the Chinese defence industry and policy changes under President Xi Jinping. China’s defence industry has been affected by the general drive towards market reforms in China since 1978, characterised by selective policy decentralisation and sectoral consolidation. Nonetheless, Chinese state-owned enterprises (SOEs) remain central players and exports are reportedly key for the profitability of the sector. Three SOEs are central actors in the production and export of UCAVs:
The pursuit of high-tech defence equipment connects to the modernisation of China’s defence-industrial base and the desire to achieve a competitive advantage in the UAV industry. It helps achieve the goals outlined in the Chinese industrial strategy, Made in China 2025, which aims to shift China’s economic output value and become a world leader in high-tech manufacturing. UAVs are further a focus area in the State Council’s 2017 “Next Generation Artificial Intelligence (AI) Development Plan”. This exemplifies the close connection between national and international commercial and political aims in the evolution of China’s defence industrial base: a clear demand in Africa and the Middle East strengthens China’s domestic UAV industries, whilst securing economic and political dividends from these sales as will become evident below.