At the end of July the world famous Farnborough Airshow took place in the United Kingdom. As always, thousands of spectators came to enjoy the many aerial displays that happened throughout the week. Others tried to catch an eye of the varied collection of civil and military aircraft gathered on the tarmac. They were joined by an army of salesman from all-the world's major aerospace companies as well as an array of foreign customers, interested in purchasing their wares. Somewhat controversially, a number of representatives from China's People's Liberation Army (PLA) were also rumored to be present the event.
The presence of a number of PLA generals at the show, while unpalatable to those who disapprove of Beijing's atrocious human rights record, is understandable. China is in the process of modernizing its armed forces, recently purchasing an array of top of the range fighter jets, submarines, destroyers, missiles, and other equipment from Russia. The Chinese military is also known to be interested in gaining access to sophisticated electronics and communications systems from a variety of sources.
The problem is that. whichever way you look at it, selling arms to China is a tricky business. Just ask the Israelis. They recently reneged on a US$250 million deal to supply China with their Phalcon Airborne Early Warning (AEW) radar system after representatives of the US Congress (many of whom are sympathetic to Israel's cause) placed considerable pressure on Clinton Administration officials to get the country to pull out from the sale. Their argument? That the plane had the potential to influence the balance of power across the Taiwan Strait, thus potentially endangering American interests.
Tel Aviv's motives have been analysed carefully in wake of its decision. Generally speaking, the announcement to back away from the deal was seen as an acknowledgment by the country of the fact that the deal had the potential to complicate relations with the US, Israel's main military and politic ally. Others sought to link it to the recently concluded Middle East peace talks at Camp David. Some observers also focused on the fact that that the project's cancellation would simply serve to further convince China that the US was committed to frustrating its ongoing efforts to modernize the PLA. That's fine as far as it goes. But the incident is important for other reasons as well. For starters it is likely to seriously damage any plans that Israel Aircraft Industries (IAI) might have for doing business in China. Indeed, in the wake of the decision Beijing rounded on Tel Aviv stated that "Any agreement and understanding between states should be honored. That is the basic understanding of state-to-state relations." More importantly perhaps, it is possible to argue that, by forcing Israel to reconsider the sale, Washington has effectively stated that where possible it will do all that it can to prevent other nations with which it has close ties from selling certain items of military equipment and sensitive civilian technology to China.
Although this is good news for Taiwan, it may prove problematic in the long run, particular insofar as European defense companies are concerned. To cut a long story short if you get a European aerospace executive on their own the chances are that, if pushed, they would admit that, given the opportunity, they would like to sell defense equipment to China. (In this age of declining defense budgets the prospect of the rapidly modernizing PLA purchasing large amounts of their equipment is obviously an attractive one). The same, of course, is true for their North American counterparts. The thing is that ever since the 4 July 1989 massacre in Tiananmen Square the majority of Western governments have imposed an embargo on the sale of military equipment to the country. But that said, the rules are applied rather more strictly in the US than they are in Europe.
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