Last October, satellite images captured the distinctive outlines of some powerful new weaponry at a Saudi runway used for military strikes in Yemen. Three Wing Loong drones had appeared, Chinese-made replicas of the US Predator with a similar ability to stay aloft for hours carrying missiles and bombs.

The same month, another Chinese military drone, the CH-4 Rainbow, appeared in a photo of an airstrip in Jordan near the Syrian border.

These images and others now being scrutinized in international defense circles add to growing evidence that military drones exported by China have recently been deployed in conflicts in the Mideast and Africa by several countries, including US allies that the US blocked from buying American models.

Remote Access

Sightings and official reports of Chinese-made Wing Loong and Rainbow drones in the Mideast and Africa, 2016-17

Sources: IHS Jane’s Defence Weekly; Bard College Center for the Study of the Drone; Iraq’s defense ministry; Nigerian government

For the US, that is a strategic and commercial blow.

The US has long refused to sell the most powerful US-made drones to most countries, fearing they might fall into hostile hands, be used to suppress civil unrest or, in the Mideast, erode Israel’s military dominance. The UK is the only foreign country that has operated armed Predators and Reapers, the most potent US systems for offensive drone strikes, according to people familiar with US sales.

The Obama administration, while seeking to facilitate exports under close regulation, led efforts to forge a global “drone code” that would curb proliferation and keep the weapons from misuse.

But China is filling the void. State companies are selling aircraft resembling General Atomics’s Predator and Reaper drones at a fraction of the cost to US allies and partners, and to other buyers.

China’s sales have enabled multiple countries—including some with weak legal systems and scant public oversight of the military—to use unmanned aerial vehicles to spy and kill remotely as the US has done on a large scale since 9/11.

Among the Pentagon’s concerns is that advanced drones could be used against American forces. In Syria, US pilots have shot down two Iranian-made armed drones threatening members of the US-led coalition.

US export policy that is driving partners to buy Chinese “hurts US strategic interests in so many ways,” said Paul Scharre, a former Pentagon official at the nonpartisan Center for a New American Security. “It damages the US relationship with a close partner. It increases that partner’s relationship with a competitor nation, China. It hurts US companies trying to compete.”

China’s drone exports are now starting to influence US policy, as American manufacturers and politicians lobby the Trump administration to relax export controls to stop China from expanding market share and undermining US alliances.

The White House National Security Council is reviewing the drone-export process with the goal to “wherever possible” remove obstacles to American companies’ ability to compete, a senior Trump administration official said.

“We are attuned to what China is doing,” the official said.

Thomas Bossert, assistant to the president for homeland security and counterterrorism, emphasized the effort to balance economics and security. The administration seeks to help US industry while advancing strategic objectives, he said, including “a deliberate approach to our technology sales policy and the protections we put in place to avoid imperiling innocent lives.”

China, meanwhile, has its sights on another milestone: building military drones in the Mideast. In March, Chinese and Saudi officials agreed to jointly produce as many as 100 Rainbow drones in Saudi Arabia, including a larger, longer-range version called the CH-5, according to people involved.

Shi Wen, the chief designer of China Aerospace Science and Technology Corp.’s Rainbow, said earlier versions of the aircraft had been exported to the Mideast, Africa and Asia and were proved “on the battlefield,” hitting 300 targets in the previous year or so with Chinese laser-guided missiles.

“Our main competitors? The Americans, of course,” Li Yidong, chief designer of the Wing Loong, which is built by Chengdu Aircraft Industry Group, said in November at China’s biggest air and defense show, in the southern city of Zhuhai.

Behind him, a video screen played animated clips depicting a drone strike on a terrorist base, set to a thumping soundtrack. Nearby, miniskirted models posed with laser-guided missiles.

China’s government and drone manufacturers declined to reveal who bought the aircraft. The foreign ministry said Beijing requires strict user agreements—offering no details—and ensures that its arms sales do no harm to regional peace and stability.

“China is paying high attention to the question of the use and export of armed drones,” it said. Authorities from Saudi Arabia, Egypt, the UAE and Jordan declined to comment.

China began exporting strike-enabled drones around 2014-2015, heralding a new phase in its arms industry as a global competitor that can influence conflicts and alliances world-wide.

Beijing used to sell mainly low-tech arms to poorer countries; now it is marketing sophisticated items including stealth fighters, and targeting markets once dominated by Russia and the US Sales help Beijing gain leverage in areas where its economic interests are expanding, adding muscle to President Xi Jinping’s drive to establish his country as a global power.

China is now the world’s third-biggest arms seller by value, behind the US at No. 1 and Russia, according to the Stockholm International Peace Research Institute, or SIPRI.

Maintaining such a ranking depends in large part on demand for China’s armed drones, which China has sold to countries including Iraq, Saudi Arabia, Egypt and the UAE, the Pentagon said in a report in June.

“China faces little competition for sale of such systems, as most countries that produce them are restricted in selling the technology” by international agreements, it said.

Key among those agreements limiting American sales is the 1987 Missile Technology Control Regime, signed by 35 nations including the US, but not China. The MTCR limits exports based on an unmanned system’s range and how much it can carry—putting tight restrictions on the most powerful American drones.

In 2015, the Obama administration issued new export rules that tried to enable drone exports if buyers agreed to use them in line with international human-rights law.

The rules grew in part from the administration’s expansion of drone operations in places such as Afghanistan. The growth spurred concerns about the lawfulness of killings outside combat areas and the ethics of remote-control warfare—including the targeting of Americans, such as al Qaeda’s Anwar al-Awlaki in Yemen in 2011.

In an effort to address legal uncertainty and the global precedent it was setting, the Obama administration sought to develop a framework for how governments use such weapons.

In October, after months of US lobbying, 45 countries signed the world’s first joint declaration on the export and use of armed or strike-enabled aerial drones. The declaration said misuse of such drones could “fuel conflict and instability” and urged exporters to be transparent about sales and ensure buyers observed laws of war.

In the Mideast, only Jordan and Iraq endorsed the statement.

China didn’t sign. Its foreign ministry said the issue was “complicated” and related to “cross-border strikes” as well as exports. It noted that other drone producers didn’t sign last year’s declaration and deeper talks were needed.

Some of the declaration’s proponents worry that several states could relax export rules to compete with China. “This would be a drone-against-drone world driven by profits, not protection of civilians,” said Wim Zwijnenburg, a disarmament campaigner for the Dutch group PAX who participated in negotiations on enhancing the declaration. He said China’s sales could fuel regional tensions as states act across borders—which can be done with drones at lower cost and less risk to personnel.

The Pentagon estimates China could produce almost 42,000 aerial drones—sale value more than $10 billion—in the decade up to 2023.

Beijing’s drone program began with old Soviet designs; more recently, US officials say, China used espionage and open-source material to reverse-engineer US drones. Beijing denies that.

US armed drones are still overwhelmingly considered the most capable, in part because the US satellite infrastructure that controls them is superior. Israel has been the top military-drone exporter for years, according to SIPRI. But Israel has largely avoided selling them in its own Mideast neighborhood.

A Wing Loong, meanwhile, costs about $1 million compared with about $5 million for its US-made counterpart, the Predator, and about $15 million for a Reaper, whose Chinese competition is the CH-5.

Buyers welcome the chance to buy relatively cheap weapons that they say come with fewer restrictions than Western equivalents. Promotional materials from China suggest it has sold Rainbows or Wing Loongs to at least 10 countries.

Satellite imagery viewed by The Wall Street Journal shows Chinese strike and surveillance drones have been used by Saudi Arabia and the UAE in the Saudi-led military intervention in Yemen.

After the Obama administration rebuffed a request from the UAE for shoot-to-kill drones, the Emiratis bought Chinese surveillance drones and equipped them with South African laser targeting systems, according to Danny Sebright, a former Pentagon official and president of the US-UAE Business Council. The UAE has used them to guide missiles from planes for strikes in Yemen, he said.

In Libya, the UAE is using Chinese drones to help support a general who opposes the United Nations-backed government in Tripoli, satellite images indicate. They also show that Egypt’s military is deploying Chinese drones in the Sinai Peninsula in its campaign against Islamist militants.

A North Korean drone that crashed in South Korea in 2014 was Chinese-made, according to a UN report. Iraq last year published video of its missile attacks on Islamic State from a Chinese drone, and Nigeria issued footage of a strike by a Chinese drone on the Boko Haram insurgency. An official with Iraq’s Joint Operations Command said Iraq has used the Chinese-made CH-4 Rainbow. A Nigerian Air Force spokesman said Nigeria was using CH-3 Rainbows procured from China.

US manufacturers, and their political backers, argue that Washington can no longer prevent drone proliferation.

Weapons makers have been buoyed by President Donald Trump’s statements of support for US manufacturing and for a $110 billion arms sale to Saudi Arabia that includes some items that were blocked by the Obama administration. The administration in June approved the sale to India of 22 Guardian drones, an unarmed maritime version of the Reaper.

Bart Roper, executive vice president of General Atomics Aeronautical Systems Inc., said the US is ceding the drone market to Chinese and others “due to obsolete and arbitrary restrictions.”

He expressed hope the Trump administration would revise policy to better promote US industry.

In April, 22 members of Congress—led by Rep. Duncan Hunter, who represents the San Diego district not far from where General Atomics is based—asked the administration to approve Reaper exports to Jordan and the UAE They argued that the Arab allies in the fight against Islamic State are buying Chinese drones instead, and that export approval would save US jobs.

In recent months, China has unveiled larger, longer-range drones and tested radar-evading stealth models, according to state media. It has also expanded its marketing, displaying its drones for the first time in Mexico in April and in France in June.

At the Chinese air show in November, two uniformed Saudi officers inspected a CH-5 Rainbow—the model most similar to the Reaper—displayed publicly for the first time. “It’s amazing,” said one. “This thing can stay up for more than 24 hours.”

The CH-5 can in fact operate for up to 40 hours, its manufacturer says—about 50% longer than its American competition.