including Germany, Greece, Poland and Spain. But they are increasingly unwilling to part with them. Another solution is to build them faster. The manufacturers agreed this year to increase PAC-3 production from 600 a year to around 2,000 by the early 2030s. The Pentagon has since solicited ideas to go faster still. But Tom Karako of CSIS notes that it has not yet signed actual contracts for stepped- up output. Allies’ industrial capacity can help. Japan produces some 30 PAC-3 interceptors a year under licence, mostly for its own use. MBDA, a European firm, is about to start production in Germany of older PAC-2 models. At a NATO summit in July Mr Trump said that Ukraine, too, would be allowed to make Patriot interceptors under licence, but has since cast doubt on the idea. Reports suggest its manufacturers, Lockheed Martin and RTX, fear losing their know-how, or being upstaged by cheaper Ukrainian versions. Lacking the same combat experience, Europeans firms are hurrying to make their own weapons. The Franco-Italian SAMP-T is supposedly able to hit short- and medium-range ballistic missiles, but Ukrainian military sources say it works less well than Patriot PAC-2s, let alone PAC-3s. Ukraine will
receive improved SAMP-T batteries, with updated interceptors, in phases from next year. Yet they are being produced in lower numbers than Patriots. Ukraine’s nimble defence industry and upstart Western firms have revolutionised drone warfare. They are now working on missile defence. One effort is the Freyja project involving Fire Point, a Ukrainian firm, and lots more European armsmakers. They aim to develop an interceptor at a quarter of the cost of a PAC-3 without American technology, with testing to start next year. Sceptics abound. Douglas Barrie of the International Institute for Strategic Studies, another British think-tank, describes Freyja as “a moon shot”. Taiwan is trying to expand production of its Sky Bow III interceptors, which are supposedly equivalent to PAC-2s and older PAC-3s. This year it is expected to start mass producing the Sky Bow IV, which it claims is more capable than the PAC-3. Few countries, however, would risk China’s wrath by buying Taiwanese weapons. Lockheed Martin has announced the development of the PAC-3 ACE, aka “Baby Patriot”, which is smaller and less capable than the PAC-3 MSE but will cost half as much. It could enter production in 2028. Some hope that laser weapons, long in development, might improve the grim arithmetic of air defence. But experimental American and Israeli weapons have so far reported success only against drones. “Air defence cannot be separated from offensive operations,” notes David Deptula, a former American air-force general. “The cheapest interceptor is the one you never have to fire because the weapon was never launched.” There is a lot to be said for shooting the archer—in the form of enemy production sites, command-and-control centres, storage depots and missile launchers—rather than the arrow. But America has depleted its stocks of long-range offensive weapons, too. CSIS reckons it has used a third of its 3,000-odd Tomahawk cruise missiles. It has refused to supply them to Ukraine and deliveries to other clients, including Australia, Germany, Japan and the Netherlands, may be delayed.
Ukraine has built drones able to reach targets ever deeper in Russia, notably energy infrastructure, arms factories and consumer-goods-distribution warehouses. But they are slow and carry little explosive. Fire Point’s heavier Flamingo cruise missile has had some success. Ukraine hopes to deploy soon its FP-7 and the bigger FP-9 ballistic missiles, supposedly with a range of more than 800km. Destroying mobile missile-launchers is difficult. This year America and Israel claimed to suppress Iranian missile fire by up to 90% by bombing launchers and the entrances to underground “missile cities”. But even with full control of the skies and exquisite surveillance, they never stopped it entirely. America lost radars, command centres, early-warning aircraft, refuelling tankers, drones, fighters and more. Even after the ceasefire in April, it has been unable to stop Iran shooting at ships in the Strait of Hormuz. Any future air war against China over, say, Taiwan, would be a formidable enterprise. Chinese missiles can reach bases as far away as Alaska and Hawaii, as well as warships in the middle of the Pacific Ocean. To defend against the People’s Liberation Army (PLA), Heritage reckons America would need more than 19,000 Patriot interceptors—more than 20 times CSIS’s estimate of current stocks. Shooting at the PLA archer would be a tempting alternative, but poses two big problems beyond penetrating China’s air defences. First, America would have to strike the Chinese mainland, which would invite retaliation against the continental United States. Second, the PLA Rocket Force is responsible not just for conventional missiles, but also land-based nuclear ones: attacks on it might be seen as an attempt to destroy China’s nuclear forces, risking nuclear escalation. Instead, American forces are practising how to survive within China’s “weapons-engagement zone” through various forms of dispersal. In a world of proliferating, cheap drones and missiles, hardening, dispersing and concealing military targets—and rebuilding them quickly if they get destroyed—are essential skills.
Although deep-strike weapons are no panacea, they do help to deter attack. That explains why America’s allies are scrambling to find the means to shoot at faraway targets. Ukraine, already under relentless attack, hopes that carrying the war to Russia will cause enough pain to make Vladimir Putin reconsider endless conflict. All the possible solutions to the interceptor shortage, even if accelerated and intensified, will take time. In Ukraine, meanwhile, civilians must still shelter underground. As they contemplate another freezing winter of peril, many will ask how their leaders let it come to this. Other governments should take heed. ■ This article was downloaded by zlibrary from https://www.economist.com/international/2026/08/18/what-happens-when-interceptor- missiles-run-out
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Chinese firms are wrapping their supply chains around the globe A rewiring of global manufacturing is under way Aug 20th 2026 The ancient port of Ain Sokhna, on the Gulf of Suez, once received turquoise destined for the regalia of pharaohs. Now it welcomes a new source of wealth: Chinese manufacturers. In just a few years their investment has transformed the area. Scores of factories have appeared, producing everything from fibreglass to switchgears. In January a new port terminal—built with financing from two Chinese logistics giants, COSCO and CK Hutchinson—began operations. Ain Sokhna forms part of the wider Suez Canal Economic Zone, a network of industrial parks and ports that stretches north to the Mediterranean. Roughly half the investment it has attracted in recent years has come from
China. The factory-building extends far beyond North Africa. From Saudi Arabia and Hungary to Brazil and Indonesia, Chinese industrial parks are springing up, along with supporting infrastructure. The pace of this investment has accelerated sharply. In the past three years alone Chinese companies have spent more than $200bn building factories abroad (see chart). The character of their supply chains is also changing, in three ways. First, they are spread more widely, with large production nodes in nearly every region of the globe. Second, they have grown deeper, with many Chinese suppliers following manufacturers into new sites, replicating the tight-knit ecosystems back home. Third, they are increasingly dominated by strategic industries, from electric vehicles and clean energy to data-centre gear. The consequence is that a rewiring of global manufacturing is under way. A number of reasons explain why Chinese firms are making their wares in an expanding array of places. Weak consumer spending and fierce competition at home have encouraged them to venture into new markets. The tariffs introduced by the second Trump administration have also incentivised production in places that have been hit with less punitive levies than historic Chinese outposts such as Vietnam.
Various countries in the global south have dangled added incentives. Egypt, for instance, offers a “golden licence” that slashes red tape for big projects. Mohamed Eldib, a lawyer who helps Chinese firms set up operations in the country, says they are eager to “come in and make money” selling to Egypt’s 120m people while also using it as an export base. The result is increasingly dispersed production footprints. Take JA Solar, JinkoSolar and TrinaSolar, three Chinese manufacturers that began making solar panels in various South-East Asian countries a decade ago and are now setting up factories in the Gulf. New Chinese production hubs are gradually being woven into customers’ supply chains. Nordex, a German manufacturer of wind turbines, now purchases blades from a factory in Morocco that its Chinese supplier opened last year. Europe has also emerged as a popular destination. Chinese firms’ foreign direct investment in all-new “greenfield” projects on the continent rose by half in 2025, to a record €8.9bn ($10.1bn), according to Rhodium Group, a research firm, and MERICS, a think-tank. Hungary has attracted much attention. Serbia has also seen a growing Chinese presence. Linglong Tire, a car-parts supplier, is among the Chinese manufacturers to have begun producing in the country. It recently announced it was expanding the capacity of its largely automated factory in the city of Zrenjanin, which supplies Western carmakers including Volkswagen and Ford. At the same time China’s global supply chains have deepened, with more upstream manufacturing taking place abroad. Gotion, a Chinese battery- maker, is constructing a gigafactory in an industrial zone 70km north-east of Morocco’s capital, Rabat; a number of Chinese suppliers, including BTR, which makes anodes and cathodes, and Hailiang Group, which produces copper foil, are building factories a few hours’ drive away to provide inputs. At an industrial zone on the outskirts of Cairo, where a Chinese manufacturer of home appliances has built a factory, an executive notes that the firm has likewise encouraged some of its suppliers to set up local plants. Plenty of inputs are still shipped in. Machine tools are often imported from Chinese suppliers such as Yangli Group. So are components or materials that are unavailable (or much pricier) locally. Chinese exports of capital goods increased by 14% in the first half of 2026, year on year. Exports of