China exhibits at French defense trade show

The Associated Press June 14, 2010, 1:33PM ET text size: TT

By EMMA VANDORE
http://www.businessweek.com/ap/financialnews/D9GB6FRG2.htm

VILLEPINTE, France

Chinese tanks and other military equipment were on show Monday for the first time at the Eurosatory defense trade fair outside Paris, as state-owned Chinese companies seek to tap new markets.

Six Chinese companies -- including China North Industries Corp., or Norinco, and Poly Technologies Inc. -- were among the 1,331 exhibitors at the air and land defense and homeland security show north of the French capital.

"China is trying to make inroads into the international defense market," said Peter Felstead, editor of Jane's Defence Weekly. "As a country, their technology is developing beyond simply copying Russian systems, which is what they used to do."

On the Norinco stand, models of armored vehicles, multiple-launch rocket systems and howitzer artillery were on display. The state-owned company claims on its website to have "demonstrated the solid strength of Chinese national defense industry and technology" in precision strike systems, amphibious assault weapons and equipment, and other products.

Despite an environment of shrinking defense budgets, the 2010 edition of Eurosatory, which started Monday and runs through June 18, has 10 percent more exhibitors than at the last show in 2008, displaying the latest technology in night vision, unmanned drones and armored vehicles.

It also is a showcase for the capabilities of the French army and French arms industry, which Defense Minister Herve Morin said in a speech is the fourth largest defense exporter in the world.

The show comes at a time when governments globally are seeking to tame rampant deficits, swollen by the global financial crisis.

Morin said his department will have to share in the budget cutting, but the extent is subject to ongoing discussions at the top levels of government.

In this time of austerity, France's priority will be to give priority to equipment needed by countries reducing military personnel and cooperating with allies to spread costs, Morin said.

He also said France is considering buying an off-the-shelf U.S.-made drone to save money.

On the Chinese stands, vendors were hopeful.

"We need orders," said Cai Xiaomei, a deputy manager at China Xinxing Import & Export Corp., a state-owned maker of military supplies such as bullet-proof jackets and helmets. "We hope through this fair to know many big businessmen."

She said roughly 70 percent of the company's $130 million annual turnover comes from exports, many of which are worn by forces in Africa.

The military and police supplies catalogs of Poly Technologies Inc., a state-owned maker of defense systems, products, technologies and services, show mainly African models for its uniforms.

China is seeking to penetrate the market "in Africa, both in terms of selling defense equipment and getting hold of mineral resources," said Felstead.

"They can undercut competitors" on uniforms, helmets and boots.