BRUSSELS/BEIJING: China hopes the end of the European Union’s arms embargo will mean it can acquire the modern military equipment it could need in any stand-off with Taiwan, defence analysts in Europe and Asia say.
Despite EU assurances that the embargo will be replaced by tougher rules, they believe the move will embolden European defence firms to chase for the contracts China will wave their way as it embarks on a new phase of defence spending.
“They (the Chinese) have slowed down in terms of buying the platforms, such as destroyers, Russian warships or submarines,” said Taipei-based defence analyst Andrew Yang.
“I think there will be more emphasis on technology transfer ... That means they will launch a more capable force to coerce Taiwan in terms of different kinds of strategies,” he said, citing a naval blockade or domination of Taiwanese air space as possible tactics.
The EU sees the ban, imposed after the bloody crackdown on Tiananmen Square demonstrators in 1989, as an obstacle to better ties with Beijing and expects to lift it by the end of June.
In its place comes a new “code of conduct” covering all EU arms exports, and a requirement on member states to tell each other what they are selling to China. But there are misgivings in Washington and Tokyo that the new controls are too weak.
China passed a law on Monday granting itself the right to attack Taiwan if it moved to independence, days after unveiling a 12.6 per cent rise in its defence budget to nearly $30 billion.
It denied either move meant it had Taiwan in its sights. But the United States, which is bound to defend Taiwan in the event of an attack, swiftly denounced the new law as “unfortunate”.
GOING DIGITAL: Analysts doubt a Chinese move on Taiwan is imminent. But the dispute is seen as one reason why Beijing wants to widen its net of suppliers past vendors such as Russia and Israel.
“The Chinese are generally happy with the hardware they are getting from the Russians,” said Adam Ward, senior fellow for East Asian security at the London-based International Institute for Strategic Studies (IISS).
“When they look at Europe, it is for better surveillance, better software and better battlespace awareness,” he said of the up-to-date technology Beijing still lacks.
Less overtly offensive than bullets or tanks, such items include telecommunications, sensors and intelligence-processing equipment and are vital to the “digital battlefield” which army planners across the world see changing how wars are fought.
Beijing is also seen as anxious to get hold of some examples of European engine technology and fuel transfer systems — if only to see how they work and to incorporate into home-made goods.
“The lifting of the embargo could also impact equipment such as helicopters — which would be good news for the French and Germans,” said London-based independent analyst Paul Beaver of a sector in which France and Germany are seen well-positioned.
The 25-nation EU, which on Monday sent a delegation to Washington to explain the lifting to State Department, Pentagon and Congress officials, is adamant that it will not result in a “qualitative or quantative” increase in arms sales to China.
TESTING PERIOD: But analysts are sceptical about how the new code of conduct will work, noting that it is not legally binding and relies on member states making their own judgement calls on whether export licences should be granted.
“At the moment, defence firms are reluctant to sell to China because of the political fall-out,” said Andrew Kennedy, Asian expert at Britain’s Royal United Services Institute (RUSI).
“The code of conduct is not as headline-making as an arms embargo. It implies a softer approach,” he said, estimating some $523 million of EU military goods currently get through to China despite the embargo.
Kennedy and others say US threats of retaliatory action against any company doing business with China will be enough to put many firms off, particularly in the British industry which is bound to US partners in a number of transatlantic projects.
Britain’s BAE Systems, whose US sales outweigh its UK European business, has said it would seek US backing before selling arms to China. French defence firms such as Thales or Franco-German aerospace company EADS are seen as less exposed to any US backlash.
The IISS’s Ward said that once the embargo is lifted, firms would explore how strictly national governments would interpret the new code of conduct and whether the political will existed to really keep the lid on exports.
“There will be a critical testing period as companies try and figure out the lie of the land,” said Ward. “I am a bit doubtful that the Europeans can live up to their commitments.”—Reuters
