China Discusses Arms Sales to Saudi Arabia and Egypt... Transactions in Yuan?

Saudi Arabia, the World's Largest Arms Importer, Reduces Dependence on the US
Egypt Also Needs Alternative Suppliers to Russia

China is discussing arms sales with Saudi Arabia and Egypt, who are seeking to reduce their dependence on the United States and Russia. Negotiations could be finalized as early as the end of this year, with plans to pay in yuan also under consideration.

On the 24th, Hong Kong's South China Morning Post (SCMP) cited a report from the global defense industry intelligence outlet Tactical Report, stating that Saudi Arabia Military Industries (SAMI), a Saudi government agency, is negotiating with China North Industries Group Corporation (Norinco), a Chinese state-owned defense company, to purchase weapons ranging from reconnaissance drones to air defense systems.

[Image source=AP Yonhap News]

According to Tactical Report, the potential list of weapons under discussion includes the Sky Seeker FX80 unmanned aerial vehicle (UAV), CR500 vertical take-off and landing UAV, the suicide drones known as Cruise Dragon 5 and 10, and the HQ-17AE short-range air defense system. The report particularly forecasts that negotiations will continue until the end of this year or early next year, with rumors circulating that the transaction could be conducted in yuan.

Another report indicates that Egypt is also negotiating with China to purchase the Chengdu J-10C multirole fighter jet. Negotiations began at the end of last year, and the Egyptian Air Force delegation is expected to meet representatives from Chengdu Aircraft Industry Group at the Langkawi International Maritime and Aerospace Exhibition in Malaysia, held from the 23rd to the 27th.

SCMP explained, "Egypt has primarily sourced weapons from Russia, France, and Germany, but due to the Ukraine war limiting Russia's weapons manufacturing capabilities, it is turning to China." It also noted, "While the United States remains the world's top arms exporter, analysts see China rapidly emerging as an alternative supplier offering affordable advanced weapons without political conditions."

Saudi Arabia, the world's largest defense spender, has traditionally imported American-made weapons extensively. However, since heightened tensions with the U.S. following the 2018 death of Saudi dissident journalist Jamal Khashoggi, it has been seeking new arms suppliers. According to Chinese local media, after the China International Aviation & Aerospace Exhibition (Zhuhai Airshow) held in Zhuhai, Guangdong Province, last November, Saudi Arabia purchased $4 billion (approximately 5.2764 trillion KRW) worth of weapons from China. Former PLA instructor Song Zhongping said, "If funding is provided in yuan, it can reduce the influence of the dollar and prevent the U.S. from suppressing and restricting the yuan."

According to data from the Stockholm International Peace Research Institute, the top five arms exporters from 2018 to 2022 were the United States, Russia, France, China, and Germany. Their combined market share accounted for 76% of the total export market. In particular, the U.S. accounted for 40% of total arms exports, mainly selling to Saudi Arabia, Japan, and Australia. China accounted for about 5.2%, exporting to Pakistan, Bangladesh, Serbia, and others.

This content was produced with the assistance of AI translation services.