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President Gul said on Monday that China is at the top of the list of those shortlisted for the contract but quoted “multi-dimensional issues” as the reason for the rethink.
“We should look at the conditions, but there is no doubt that Turkey is primarily in NATO. These are multi-dimensional issues, there are technical and economic dimensions and on the other hand there is an alliance dimensions,” Gul was quoted by Turkey’s Hurriyet Daily News.
Turkey had chosen the China Precision Machinery Import and Export Corporation to co-produce a $4 billion long-range air and missile defense system.
Late last month Washington said it was concerned by reports of the deal between Turkey and China.
“We have conveyed our serious concerns about the Turkish government’s contract discussions with the U.S.-sanctioned company for a missile defense system that will not be inter-operable with NATO systems or collective defense capabilities,” US State Department Spokeswoman Jen Psaki said.
Many defence analysts were confident the deal would be clinched by Raytheon Co, a US company that builds the Patriot missile.
Since 2012, NATO has deployed the Patriot air and missile defence system in Ankara, a traditional US ally in the region.
If the deal goes through it would be the first time China has sold air defence weapons to a NATO member.
Turkish Deputy Prime Minister Bulent Arinc has expressed serious reservations about Turkey needing approval from the US for its defence deals.
“We do not consider anything other than Turkey’s interests,” Arinc said.
“It is not possible for another country to say, ‘I have a problem with them, I had put them on a black list, a red list, how could you give them a tender?'” said Arinc.
Chinese firm, CPMIEC is under US sanctions for alleged missile sales to Iran, North Korea and Syria.
The winning Chinese FD-2000 system beat the US Patriot, the Russian S-400 and the French-Italian Eurosam Samp-T.
Turkish analysts say their choice of a Chinese firm is due to technological reasons as well as cost effectiveness.
The contract enables Turkey to have its own long-range missile defence system for the first time.
China and Turkey signed deals worth $4.3 billion in a wide range of sectors during Chinese leader Xi Jinping’s visit in 2012.
China is now Turkey’s third biggest trading partner after Russia, and Germany.
With inputs from Agencies