Much has been reported lately about the U.S. government’s Countering America’s Adversaries Through Sanctions Act (CAATSA), and how this new policy would affect allies and partners seeking to buy weapons from Russia. India recently found itself in the spotlight for its plan to acquire S-400 surface-to-air missiles from Russia, and New Delhi has been seeking a special waiver for its purchase. Indonesia, another regular customer of Russian weapons, has been in the process of acquiring Sukhoi Su-35S fighter jets from Moscow, and reportedly obtained assurances from Defense Secretary James Mattis that it would not suffer punitive measures for so doing.

In any case, the Indo-Pacific has been a “free for all” arms market—especially since the end of the Cold War. India could understandably be anxious about CAATSA because it remains dependent on much of Russian-origin “big ticket” items as a traditional client dating back to the Cold War despite an increase in the share of non-Russian weapons in its acquisitions in recent years. However, Southeast Asia is an even more peculiar case. This region has been, and remains till this day, a veritable playground for international arms vendors, the shady middlemen who strike deals.

Suffice to note, putting geopolitical alignments or nonalignments aside, regional governments have always been on the lookout for good deals—affordable military capabilities that best come with little or no political strings attached. Though of course, much neglected was the fact that part of the calculus behind the arms-acquisition program is pragmatically driven at least—many Southeast Asian militaries have faced block obsolescence in their equipment and need cost-effective solutions to replace them with a modern kit.

It is always an ongoing tussle between quality and quantity. Though of course, in recent decades, the emergence of new players in the arms market provides more choices. The case of China being one such example. As the Trump administration appears obsessed with CAATSA and how it can deal with Russia, it ought to be pointed out that the role of China filling the possible void cannot be overstated. In fact, Beijing would be the keenest of all to fill the shoes of Russia should the latter one day find itself sidelined in the global-arms market. This scenario appears unlikely for now, though in view of the strategic ramifications of growth in China’s diplomatic, economic and military clout, the possibility of this Asian giant coming into the crosshairs of a CAATSA-equivalent in the future cannot be discounted.

When this contingency ever happens, the question is undoubtedly how to deal with countries which not only procure Russian, but also Chinese, weapons. This has often been viewed as China’s growing influence over its smaller neighbors to the south and a further evidence of the diminishing United States’ role as the primary security provider in the region. Indeed, several Southeast Asian countries do purchase Chinese equipment in varying quantities. But by far the key regional country that does so for the longest time has been Thailand.

While political factors cannot be completely discounted from the final procurement decisions, they tend to be often overstated. More attention should be given to the complexities in accessing preferred arms suppliers, geopolitical disturbances elsewhere affecting equipment availability, and, due to the restricted defense budgets limiting acquisition choices, the hardware prices, or cost-effectiveness of the equipment, and availability matter immensely. While not necessarily representing the “best-in-the-market” options, the final procurement decisions have, still, represented the pragmatic “fit-for-purpose” alternatives. Thailand’s media-frenzy decision to buy Chinese equipment to fulfill part of the Royal Thai Army and Navy’s modernization plans is a case in point.

The Peculiar Story of Army’s Tank Procurement

In the Royal Thai Army’s (RTA) plan to acquire modern main battle tanks (MBTs) to replace some of the already decades-old American-made equipment, it has voiced its outstanding requirement for two hundred tanks. Replacing the aging American equipment with new American main battle tanks was deemed prohibitively expensive. Moreover, as the military-led coup took place in May 2014, ousting a democratically elected government, the subsequent sanctions closed Bangkok’s access to much of the Western weapons manufacturers.

As Thailand’s access to the original equipment manufacturers (OEMs) in the West became severely restricted, Bangkok sought alternative, trusted options, namely Russia and Ukraine. In 2011, the Royal Thai Army placed an order for forty-nine Ukrainian-made T-84 Oplot-T MBTs, worth $240 million dollars, to replace aging American-made light tanks. By 2015, however, the RTA had received only ten Oplot-Ts and, due to the Ukrainian manufacturer’s continuing difficulties in concluding the contract, Thailand declined further deliveries in April 2017. The Russian takeover of Crimea and hostilities in the eastern Ukraine caused economic challenges to Kiev, putting the fulfilment of the Thai contract in jeopardy.

The RTA was then forced to look again elsewhere to fulfill its modernization requirements. In December 2015 and following February, Thai delegations visited Russia to conduct first-hand assessment of the T-90MS MBT offered by Uralvagonzavod. As the Thai army opened the tender once more, China’s NORINCO made its offer in the form of the VT4 as a credible alternative. Ultimately, the price and availability of the equipment led to Bangkok’s final decision. Despite the attractiveness of the Russian offer in terms of capability, the price tag proved too high. After many failed or incomplete acquisition attempts, the Chinese offer—the VT4—emerged as the most cost-effective alternative.

After the contract was approved in early 2016, the first batch of twenty-eight VT4 MBTs, worth $150 million, was delivered to Thailand in October 2017, and destined for the 3rd Cavalry Division at the Prem Tinsulanonda Military Camp in Khon Kaen. Following the delivery, the RTA got a green light from the cabinet to procure a second batch of ten VT4s, for $58 million. The third batch, intended for a full, forty-nine MBT-strong battalion, still awaits cabinet approval. NORINCO’s VT4 provides the RTA with the required capability at an attractive price tag. Besides cost-effectiveness considerations, the equipment was available for Thailand with few strings attached.

Thailand has a long history operating and using Chinese military equipment dating back to the 1980s when Beijing sold military hardware to Thailand at “friendship prices,” or prices significantly under the market value, to balance against Vietnam’s occupation of neighboring Cambodia. However, quality problems, lack of after-sales support, and provision of spare parts, hampered the usability and availability of much of the Chinese-made equipment. Tellingly, in 2010 the RTA discarded prematurely its Chinese Type-69II MBTs by sinking them in the Gulf of Thailand to serve as artificial reefs.

To address quality concerns regarding Chinese hardware, Beijing offered to build a major maintenance, repair and overhaul (MRO) facility in Khon Kaen, Thailand. The new facility will allow Thailand’s local industry to assemble, produce and maintain Chinese land equipment for the RTA, and involves technology transfers to the country’s emerging defense industry. Furthermore, to address past Thai experience with quality and after-sales support problems, this new MRO facility and production line is expected to greatly enhance the RTA’s independent MRO capacity ensuring the operational availability of the equipment and supply of spare parts, independent of the Chinese OEMs.

The RTA’s challenging tank-modernization program shows that the decision process leading up to the procurement of the Chinese-made VT4 MBT was nothing but obvious, or even less indicative of Thailand’s often-touted warming up to Beijing. Only after encountering restricted access to Western OEMs and failed attempts to source from others that the Chinese offer came out as the most cost-effective alternative. The Russian T-90MS was deemed too expensive, whereas similar Western options were roughly three times more expensive than their Chinese counterparts.

Critically, the RTA’s shopping of weapon systems from the East should not come as a surprise to analysts due to the country’s restricted access to Western arms markets following the military coup in May 2014, and the army’s subsequent turn to other available weapons sources. The original choice, Ukrainian-made Oplot-T, with the contract finally concluded in March 2018, suffered from multiple delays and delivery challenges. Offering excellent cost-effectiveness and acceptable quality, the Chinese VT4 will likely fulfil the equipping needs of several more RTA divisions in the quest to complete its modernization program.

Navy’s Cost-Effective Solution: Trial and Errors

Unlike its dominant army counterpart, the Royal Thai Navy (RTN) has relatively shorter experience operating Chinese equipment. Until the 1990s, the navy operated predominantly Western equipment; its training and doctrinal developments also heavily influenced by the West.

While much attention in the early 1990s was fixated on the Spanish-built helicopter carrier Chakri Naruebet, worth noting is that the Thais also obtained Chinese-built principal surface combatants. The Chao Phraya-class, a modified early Jianghu-class guided missile frigate, came with modern anti-ship cruise missiles, namely the C-801 that is the export variant of the YJ-81 which in turn is a copy of the French MM-38 Exocet. Otherwise, the remaining equipment on board these frigates were the standard fit found on sister ships built for the Chinese Navy. A fleet replenishment oiler, Similan, was also acquired from China.

Along with the second-hand American Knox-class frigates, these Chinese-built warships would form the nucleus of a reinvigorated, bluewater-capable RTN. But often missed was that this purchase reflected the tough balance Thailand’s navy always had to face. Despite the flush of funding available in the 1990s, the navy’s shopping list could only be anything but fully satisfied. The admirals would have desired Western builds. The Spanish-built carrier (and its Matador jump-jets) consumed the lion’s share of budget allocations, leaving little more for other principal surface combatants. And of course, it goes without saying too for the outstanding submarine-acquisition program.