Drone deals take off
During a recent visit by the king of Saudi Arabia to China, the two countries signed deals worth $65 billion, including a partnership for manufacturing drones, foreign media reported. In recent months, Saudi Arabia has repeatedly turned to China to buy drones. Experts said that the choice reflects the growing popularity of Chinese drones on the global market, especially in the Middle East, due to their high cost-efficiency. They also noted that Saudi Arabia needs support from China to wean its economy off oil exports.
As a rising dealer of military drones, China has found a good customer in the Gulf country of Saudi Arabia.
During a state visit to China by Saudi Arabia's King Salman bin Abdulaziz Al Saud from March 15 to March 18, the two countries signed deals worth as much as $65 billion, including a partnership agreement to manufacture drones, Reuters reported on March 16.
Domestic media outlets have reported that the agreement was signed between Beijing-based China Aerospace Science and Technology Corp (CASC) and Saudi Arabia. CASC declined to confirm the news.
In recent months, Saudi Arabia has frequently bought drones from China. According to a report in February by the Xinhua News Agency, China's unmanned aerial vehicle (UAV), called the Wing-Loong II, had the "biggest overseas purchase order in the history of Chinese foreign military sales" of unmanned aircraft system.
Although Xinhua didn't disclose the name of the buyer, a report on defence-blog.com in March revealed that the Wing-Loong II was sold to Saudi Arabia.
During the International Defense Exhibition and Conference held in February in Abu Dhabi, Chinese companies signed deals with Saudi buyers to sell them the Rainbow UAV production line, according to a report on on March 20.
China's growing trade of drones with Saudi Arabia reflects the growing popularity of Chinese weapons, especially UAVs, on the global market, thanks to their comparatively low prices and technical advantages, a source from CASC, who did not want to be named, told the Global Times on Wednesday.
Tested in battle
As an active anti-terrorism participant, there are good reasons for Saudi Arabia to prefer made-in-China UAVs. One of the most important is value.
The CASC person brought up the Rainbow UAV as an example of China's advanced drone technology.
"Rainbow UAVs are very good at striking time-sensitive targets, which have been in battle in countries that have bought and used the weapon. This makes the Rainbow suited to small-scale fights against militants," he said.
In the past, the Iraqi air force has deployed Rainbow drones against rebels. In one battle in 2015, a Rainbow-4 destroyed an enemy stronghold, said Li Daguang, a professor at the National Defence University PLA China. He added that Nigeria has also used Rainbow UAVs to fight terrorists.
"Chinese UAVs' wonderful performance on Middle East battlefields such as in Pakistan may have caught Saudi Arabia's attention," said Zhou Rong, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China.
Another advantage of Chinese drones is that they are more cost-effective than many of competing UAVs. According to Sarah Kreps, associate professor of the Department of Government at Cornell University, a drone produced by China is "a fraction of the cost of the comparable drone produced in the US," giving Middle East customers like Saudi Arabia a good economic reason to acquire drones from China.
A Wing-Loong UAV costs about $1 million, while a similar Reaper UAV made in the U.S. costs about $30 million, Li told the Global Times on Wednesday.
Externally, the U.S., the biggest competitor to China's drone exports, has a "complicated, idiosyncratic, and unpredictable" process for exporting military technology, Kreps told the Global Times on Wednesday.
Just recently, the U.S. canceled a weapon sale to Saudi Arabia because of its involvement in Yemen, according to Kreps. These factors have prompted Saudi Arabia to turn to China, which offers a more streamlined process for acquiring drones.
Saudi Arabia's growing dealings with China come at a time when Chinese drones are gaining popularity on the international market.
For example, Rainbow drones have been sold to more than 20 customers in more than 10 countries, the CASC person said.
Countries such as Saudi Arabia, Egypt, Iraq, the United Arab Emirates, Pakistan and Nigeria have all reportedly imported UAVs from China, a CNBC report said on March 5.
The CASC source noted that the prospects for Chinese drone exports are promising because Chinese UAVs are not only for military use. They also have wider applications in civilian markets such as forest fire prevention, marine surveillance and transportation management.
"The biggest market for UAVs is the civilian market, which requires more exploration. Also, the development of UAVs will be closely linked with artificial intelligence and big data in the future," he noted.
Mutual benefits
As Saudi Arabia runs increasingly short on oil reserves, the country is beefing up efforts to shift its economic focus from oil to other sectors such as manufacturing, and China can help them achieve this goal, Zhou told the Global Times on Tuesday.
"The fact that they have not only bought drones, but also drone production lines shows Saudi Arabia's ambition to become a manufacturing center in the Middle East, as they turn from an affluent country to a developed country with assets and technologies," Zhou said.
According to the initiative, Saudi Arabia intends to become a global investment powerhouse by the end of 2030.
Li noted that buying a UAV production line is not a common practice, "but it's a smart decision because it can help Saudi Arabia narrow its gap with Iran's UAV manufacturing industry," Li said.
Apart from UAVs, the $65 billion in deals also included agreements in sectors such as energy, transportation, telecommunications and aviation.
"I guess Saudi Arabia has been attracted by the results of the 'One Belt and One Road' initiative and the China-Pakistan Economic Corridor," Zhou said.
He also noted that orders from Saudi Arabia can also bring benefits to China, not only in terms of money, but also in terms of easier access to the Middle East for greater economic cooperation.
