US, Israel keeping wary eye on cheaper Chinese military drones

SINGAPORE: Cheaper Chinese military drones are chipping away at United States and Israeli domination of the industry, fuelling a new race as companies predict a rise in demand especially in regions such as Asia.

Chinese cut-rate versions of American armed drones like the MQ-9 Reaper have begun showing up in African, Middle Eastern and Central Asian countries, signalling the country’s ambitions to take market share from incumbents such as General Atomics Aeronautical Systems and Israel Aerospace Industries.

At the Singapore Airshow, state contractor China National Aero-Technology Import and Export Corporation (Catic) showed off two versions of its Wing Loong reconnaissance and strike unmanned aerial system (UAS). It was the drone’s first public appearance in Southeast Asia, according to trade media, and the booth drew military personnel from countries such as Myanmar and Malaysia.

These Chinese drones cost about US$5 million (RM19.8 million) versus up to US$100 million for a US-made system, making them especially attractive to less affluent militaries, said Ben Moores, a senior analyst for defence and aviation at Jane’s by IHS Markit.

“The factors are moving in China’s favour on a daily basis,” he said, adding that the Chinese option was also attractive to countries with less than cordial relations with the US and Israel.

For instance, he said: “Global customers are very put off by (US President Donald) Trump. Even though he is removing restrictions, any customer is going to think twice about buying American equipment because if you buy it and he decides he doesn’t like you for any reason, he cuts off your spares and you can’t run your platform.”

To be sure, analysts said China had not yet taken away any business from US and Israeli drone manufacturers, and had so far just sold to customers who were unable to afford American and Israeli products.

Western manufacturers at the airshow acknowledged the growing presence of their Chinese rival. But they said that customers would not overlook their many years of experience for a cheaper and less reliable alternative.

Jane’s by IHS Markit predicts that countries such as Sri Lanka, Kazakhstan and the Philippines could be in the market for Chinese drones, with Malaysia potentially seeking 24 units and Indonesia looking at 20.

Israel’s Aeronautics said it had a 40-year track record with 70 clients across 55 countries, which meant its drones had, unlike the Chinese, been tested through many development cycles and been proven in combat.

“You cannot shortcut 40 years to five years. I believe that the customer appreciates a good product and is willing to pay a little more,” said Dany Eshchar, Aeronautic’s deputy chief executive for marketing and sales.