In a joint effort to combat Iran, recent reports from Reuters have revealed that China intends to transfer CM-302 anti-ship missiles to Iran. Despite China’s denial, it cannot deny its open and blatant provision of one of the most critical weapons in war to Iran through various channels — the Shahed series of single-use attack drones.
Anushka Saxena, an analyst at India’s Takshashila Institution’s Indo-Pacific Research, highlighted in a recent analysis for Nikkei News that while Shahed drone technology may not be top-notch, its advantage lies in its affordability, with an estimated unit price ranging from $20,000 to $50,000. This affordability allows Iran to engage in a sustained attrition war against powerful adversaries like the United States.
Analysis reveals that during the initial stages of the conflict, Iran is estimated to have a stockpile of 80,000 Shahed drones, with a daily production rate of about 400 drones. Disassembly and analysis of the Shahed drones by technical personnel from Ukraine and the United States have yielded startling results.
The Ukraine Defense Intelligence Directorate (GRU) reported that as many as 40 out of 52 components of the Shahed drones come from 13 different American companies, including Texas Instruments, NXP Semiconductors, Analog Devices, and Onsemi.
Furthermore, a study by the Ukraine Defense Intelligence Directorate on the 136-MS001 drone revealed that out of 75 components, 55 are from the United States. Other critical components such as global navigation satellite system modules, accelerometers, and microprocessors come from Switzerland, Taiwan, Japan, or China, with an additional semiconductor from Infineon available on eBay for around $20.
Of significant concern, the most recent disassembly analysis found that the Shahed-136 drone is equipped with a NVIDIA Jetson “Orin” artificial intelligence computing kit marketed towards students and priced at $249. This kit supports “machine vision,” reducing the need for visible light imaging.
The article points out that Iran, one of the most heavily sanctioned countries in the world, acquires Shahed drone components primarily through three channels.
The first method involves the use of shell companies. An open case from the U.S. Department of Justice revealed that two Iranians ran a company named Rah Roshd, posing as companies from the UAE and Belgium, using fake email addresses (some with spelling errors) to procure American servo motors. They then paid a Chinese company to facilitate the transfer.
Following this, numerous similar shell companies emerged in Hong Kong and Turkey. To disrupt Iran’s missile and drone procurement network, the U.S. Department of the Treasury eventually sanctioned 32 individuals and entities from Iran, the UAE, Turkey, China, Hong Kong, India, Germany, and Ukraine.
Additionally, an investigation by the Australian Department of Foreign Affairs and Trade found that the Shahed drone’s satellite navigation antenna had Chinese and English labels as “agricultural equipment parts,” prompting Australia to issue a risk warning, revealing some planting methods supported by China.
The second method involves intermediaries such as Chinese distributors and re-exporters. In February 2025, the U.S. Department of the Treasury imposed sanctions on six Hong Kong and Chinese companies involved in procuring drone components for Iran. These companies, representing Pishtazan Kavosh Gostar Boshra (PKGB), an Iranian entity named by the Office of Foreign Assets Control (OFAC), purchased American parts, which were then transferred by Chinese trading companies to Iranian aviation companies like HESA or Shahed Aviation Industries for assembly.
The third method entails direct technology transfer, with China playing a crucial role. The Shahed-107 appears to use the DLE 111 gasoline engine from China’s Maihaoxiang Technology Co. The Royal United Services Institute (RUSI) revealed that the Shahed-131 is equipped with the MDR-208 “Wankel” rotary engine reverse-engineered by a Chinese company from the British AR-371 engine.
The article emphasizes that China’s blatant support for Iran serves multiple purposes. First, by supporting Iran’s drone production, China continuously evades sanctions through practical upgrades.
Second, China leverages its full capabilities to establish Iran’s drone supply chain, aiming to achieve a dual objective: establishing direct feedback loops between manufacturers/suppliers and operators/deployers and pushing the U.S. into competition with another major supporter of Iran, potentially altering the balance of power. Moreover, China likely aims to leverage Iran’s influence in the Strait of Hormuz to secure its energy interests.
Thirdly, China’s military can accumulate knowledge of attrition warfare and asymmetric warfare in extended conflicts. By observing and learning from Iran’s distributed launch capabilities, China might gain insights for countering conventional interceptor and drone group combinations in aerial combat scenarios in its vicinity.
Furthermore, Ukraine’s Militarnyi analysis revealed that the Shahed-136 drone’s MD-500 piston engine is either produced or resold by China’s Micropilot UAV, likely inheriting this technology from the Xiamen factory of Limbach, a German company.
Moreover, Ukraine’s Defense Army “Information” platform revealed that the Russian version of the Shahed-136 drone, the Geran-2, especially the “E” series, transitions from past “fire and forget” systems to operator-controlled systems due to the use of the TS130C-01 optical camera produced by Chengdu Hongpu Technology Co. Ltd.
The article concludes that China’s overt support for Iran stems from various motivations. Firstly, by backing Iran’s drone production, China continuously circumvents sanctions through practical upgrades.
Secondly, China’s orchestrated effort to build Iran’s drone supply chain aims to achieve two objectives: establish direct feedback loops between manufacturers/suppliers and operators/deployers and pressure the U.S. to compete with another major supporter of Iran, potentially tipping the balance of power. Additionally, China may seek to utilize Iran’s influence in the Strait of Hormuz to ensure its energy security.
Thirdly, China’s military involvement allows for the accumulation of knowledge in attrition warfare and asymmetric operations. Facing similar systems like Patriot missiles and THAAD radars in its neighboring regions, China can glean lessons from the combination of conventional interceptors and drone groups in aerial combat scenarios.
Overall, China’s overt support for Iran has far-reaching implications, both in disrupting global security dynamics and shaping the future of warfare.