In Geopolitics Today: Monday, March 27th
Nordic Countries Working to Establish Joint Air Defence, Honduras Establishes Relations with China, and other stories.
Saudi Aramco to Build Refinery and Petrochemical Complex in China
Saudi Aramco has announced plans to build a $10bn refining and petrochemical complex in China over the next three years, in response to the country’s growing demand for energy. The complex will have the capacity to refine 300,000 barrels of crude per day, with Aramco supplying 201,000 barrels per day. The project is a key part of the oil giant's strategy to secure long-term demand for its oil.
Construction of the complex will be carried out in partnership with two Chinese companies, and is expected to begin in the second half of this year with completion scheduled for 2026. The move follows an agreement between Aramco and China’s Sinopec in December 2020 to build a 320,000-barrel-per-day refinery and petrochemical cracker in the country, emphasising China’s major role in global oil consumption. Aramco has been prioritising refining and petrochemical investments as part of its efforts to secure long-term demand for its main product, amid expectations of a decline in oil demand for transport fuels.
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Canada Seeking Military Surveillance Aircraft from the US
Canada is considering purchasing up to 16 advanced military surveillance aircraft from the United States, and has officially requested information and an offer from the US government. The Department of National Defence (DND) and the Royal Canadian Air Force have determined that the Boeing-built P-8A Poseidon is the only aircraft that meets Canada's military needs for patrol, intelligence, surveillance, and anti-submarine capabilities. However, the final decision will depend on various factors, including the capability offered, pricing, availability, and benefits to Canadian industry.
The original plan for purchasing new surveillance aircraft did not anticipate the program starting until 2024, with bids being accepted in 2027. However, Boeing's warning last year that its P-8 Poseidon production line in the US could be shut down by 2025 if additional orders were not placed has accelerated the process. While previous DND estimates have put the cost of the project at up to $5 billion, industry sources have suggested that the deal could be worth up to $9 billion. Bombardier had been pitching a militarized version of its Global 6500 jet as a replacement for the air force's current CP-140 Aurora, but Boeing's P-8A Poseidon is currently the frontrunner.
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Nordic Countries Working to Establish Joint Air Defence
Sweden, Finland, Norway, and Denmark have come together to form a joint air defence force with approximately 250 combat aircraft, aimed at deterring Russia. The new Nordic air defence force is expected to be of the same size as that of the UK or France, making it a significant military power. The air forces of the respective countries have been working to deepen their cooperation over the past year, and the declaration of intent signed by the Air Force commanders of the four nations is a significant step towards seamless cooperation between their air forces.
The new Nordic air defence force is focused on expanding and strengthening cooperation in operational planning, particularly in the remote, northern parts of Finland, Sweden, and Norway. The goal is to have the cooperation underway as soon as possible and close to completion by the winter of 2024 in connection with the Nordic Response exercise. This joint force signifies the Nordic countries' commitment to working together for the mutual defence and security of their people, as well as acting as a significant deterrent to any potential attacker. The joint air defence force is a clear message to Russia that the Nordic countries are united in their efforts to maintain regional security and stability.
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Honduras Establishes Relations with China
Honduras has announced the termination of its diplomatic ties with Taiwan in favour of establishing formal ties with China. The Honduran Foreign Ministry stated that it recognised only one China in the world, and the People’s Republic of China was the only legitimate government representing all of China. The decision was not a surprise, as the Honduran foreign minister had visited China recently, and the Honduran President Xiomara Castro had expressed the intention to establish ties with Beijing.
Taiwan accused Beijing of using coercion and intimidation to lure its few remaining allies, and the move leaves Taiwan recognised by only 13 sovereign states. Despite China’s campaign of isolation, Taiwan retains robust informal ties with over 100 other countries, most notably the United States. Taiwanese Foreign Minister Joseph Wu claimed that Honduras demanded $2.45bn in aid from Taipei, while Honduras denied it had demanded any such aid. China’s Ministry of Foreign Affairs spokesperson Mao Ning emphasised that there were no conditions attached to the decision, and Taiwan independence was a dead end. China views Taiwan as one of its provinces, while the democratically elected government in Taipei strongly disputes this. Beijing has spent billions to win recognition for its “One China” policy, leading to several Latin American countries switching their diplomatic relations from Taiwan to Beijing.
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China Develops Production of Self-Reliant Military Aircraft Engines
China’s announcement of the successful development of its next-generation military aircraft engines signals its continued push towards becoming a major power in the aerospace industry. With the completion of the WS-15 afterburning turbofan, China is now able to equip later variants of its Chengdu J-20 stealth fighters with supercruise capability, increasing the fighter’s combat potential. Additionally, the WS-19 and WS-20 turbofans are set to power the next-generation fighter jet and airlifters of China’s armed forces, respectively.
However, material supply chain issues for the engines’ production remain a challenge for China, with the official not providing further details. As China’s domestic production capabilities continue to advance, it seeks to reduce its dependence on foreign suppliers, particularly for critical military technology. The localization of the WS-10C engine, which powers China’s Chengdu J-10, Shenyang J-11B, and J-16 fighter fleets, demonstrates China’s successful efforts towards achieving greater self-reliance in this sector. These advancements also have implications for China’s future ability to project military power, especially in the contested South China Sea region.