Turkey's announcement last month that it would begin talks with the China Precision Machinery Export-Import Corp. on the deal worth $3.44 billion surprised many and strained relations between Turkey and its NATO allies.
The Chinese company has been sanctioned by the U.S. under its Iran, North Korea and Syria Nonproliferation Act. The agreement to hold talks puts it at the top of a shortlist, although Turkish officials have said that the deal is not yet final.
Based on Russian technology, China's FD-2000 system is in competition with the U.S. Patriot PAC-3, Russia's S-400 and the Italian-French SAMP/T Aster 30. Turkey plans for a co-production agreement call for as many as four missile firing units and 288 surface-to-air interceptor missiles.
Turkish officials said China offered the best price as well as co-production arrangements, and said a deal could be signed in six months, with delivery within four years.
According to the Center for Strategic and International Studies, U.S. and NATO concerns appear to center on the need to develop new hardware and software to allow the Chinese system's integration with the NATO ballistic missile defense system and other units that protect Turkey.
Data would have to be exchanged to allow inter-operability, raising the possibility of China accessing NATO secrets, the Washington, D.C.-based center said.
In recent years, China has gone from importing large amounts of Russian weaponry to competing for overseas markets, mainly by offering cheaper prices and easy financing.
Sweden's Stockholm International Peace Research Institute reported in March that China had overtaken Britain as the world's fifth-largest arms exporter over the five-year period from 2008 to 2012.
