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Thai-China Submarine Deal Runs Aground on EU Arms Embargo
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China News
THAI-CHINA SUBMARINE DEAL RUNS AGROUND ON EU ARMS EMBARGO
March 31, 2022 1:20 AM
* Zsombor Peter
--------------------------------------------------------------------------------
Bangkok Thailand
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BANGKOK —
China has paused construction of an attack submarine earmarked for Thailand’s
navy following Germany’s refusal to export the top-end engines the plans call
for, a Thai naval official confirmed.
The work stoppage could strain Thailand’s military relations with China, which
has replaced the United States as Thailand’s biggest arms supplier.
The Royal Thai Navy and China’s state-owned China Shipbuilding & Offshore
International Co., or CSOC, signed the $402 million deal for the Yuan-class S26T
submarine in 2017, with delivery originally expected by the end of next year.
Citing an anonymous Thai navy source, though, local media reported in February
that construction of what would be the country’s first submarine had stalled.
In confirming the delay and its cause, Rear Admiral Apichai Sompolgrunk,
director general of the Thai navy’s acquisitions management office, told VOA
that the submarine was unlikely to arrive next year.
“Right now the process of building the submarine is stuck because the engine is
not concluded yet,” he said.
“Finish the [engine] process, and building will start again,” he added.
Apichai said the deal specified three MTU396 diesel engines from Germany’s Motor
and Turbine Union company to run the submarine’s electric generator set.
Germany’s defense attaché to Thailand, Philipp Doert, confirmed his government’s
decision to deny China the engines in an open letter to The Bangkok Post in
February.
“The export was refused because of its use for a Chinese military/defense
industry item,” he wrote. “China did not ask/coordinate with Germany before
signing the Thai-China contract, offering German MTU engines as part of their
product.”
Germany is bound by a European Union arms embargo imposed on China in 1989 after
the Tiananmen Square massacre, when Chinese security forces opened fire on
unarmed protesters in Beijing demanding greater political freedom. China claims
that 200 civilians died in the crackdown; some independent estimates put the
number of dead in the thousands.
Engine trouble
Despite the embargo, Germany and other EU countries have been supplying China’s
military with engines and other equipment for decades, said Jon Grevatt, a
Bangkok-based analyst covering the Asia-Pacific region for Janes defense
industry publications.
Sweden’s Stockholm International Peace Research Institute, which tracks arms
transfers around the globe, says MTU alone has fitted Chinese destroyers and
submarines with over 100 of its engines from 1993 through 2020.
Grevatt said they do it by passing off items with the potential for both
military and civilian applications, so-called dual-use items not explicitly
excluded by the EU embargo, as commercial exports, even when destined for
military hardware. He said China’s sale of the Yuan-class submarine to Thailand,
however, made the ruse harder to pull off.
“If this submarine wasn’t being exported to Thailand, no one would know about it
and therefore it would go ahead. But the fact that it is being exported, it’s in
the news, is cause for the German government to say, oh, no, no, no, we’re not
allowing that,” he said. “You can’t deny that that system is a defense system.”
A spokesperson for MTU, a brand of Rolls-Royce Power Systems, confirmed that the
company has supplied Chinese shipyards with engines but said they were not
considered dual use items.
“The engines supplied to China under the product brand mtu are not controlled as
dual-use goods and are, therefore, not subject to a licensing requirement.
Rolls-Royce complies with all relevant national and European export control
regulations and maintains a regular dialogue with the German government on our
business with China,” Christoph Ringwald told VOA by email.
He refused to comment on why Germany would block the export of MTU engines for
the submarine CSOC is building for Thailand after not intervening in past
exports for Chinese navy vessels.
The German embassies in Thailand did not reply to VOA’s requests for comment.
The Chinese embassy did not reply either.
Reporting on the submarine deal earlier in March, The Wall Street Journal said
China’s Foreign Affairs Ministry told the paper the EU embargo was
“inconsistent” with the current international order and that it hoped the bloc
would make the “correct” decision regarding the engines.
If Germany holds firm, Grevatt said CSOC will have a hard time replacing the
MTU396.
Should CSOC manage to find another willing foreign supplier, there’s the matter
of compatibility.
“If you take out one of those German engines from that submarine and say, 'OK,
let’s fit another one in there,' it’s not like a car, you can’t just do that —
it has to be integrated into the whole system; that is just not possible,”
Grevatt said.
Thailand, he said, “either manages to get the [MTU] engine or sees if China can
produce one on its own.”
That poses its own problem. For all the gains China’s military-industrial
complex has made in recent years, Grevatt said it still cannot match the
propulsion systems of the United States and Europe, and Germany especially, for
power and reliability.
Deal or no deal
Apichai said CSOC has offered to build another engine for the submarine but the
Thai navy was not yet convinced the proposed replacement would do the job.
“This engine is not well proven yet, so the Royal Thai Navy is still waiting for
the answer from the shipyard [CSOC] to ensure that this engine is as good as the
MTU,” he said.
Apichai would not confirm or deny reports that China has also offered to
transfer two decommissioned submarines to Thailand as another possible
alternative, but he insisted the Thai navy would accept nothing short of the
Yuan-class model it ordered. He said there was also far to go before any talk of
scrapping the deal altogether.
But the embarrassment of the deal’s engine troubles seems to be straining
Thailand’s military relations with China already, said Paul Chambers, a lecturer
and international affairs adviser at Thailand’s Naresuan University who studies
the country’s armed forces.
He said the submarine is one of the most expensive purchases the Thai navy has
ever made. It also underscores Thailand’s growing penchant for Chinese arms.
According to SIPRI, China has been the country’s top weapons supplier over the
past few years, replacing the United States.
Chambers said a series of arms embargoes the United States placed on Thailand
after military-led coups in 2006 and 2014 helped drive the shift away from U.S.
suppliers. But China could start to lose some of its new-found sheen should
Thailand ultimately fail to get what it wants out of the submarine deal, he
added.
“Such a strain will likely make Thailand take another look at other countries
for weapons purchases. But China is too important to Thailand, at least
economically, for the sub incident to irreparably harm Thai-Chinese relations,”
Chambers said. “This incident, however, represents a definite glitch in the two
countries' ties.”
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