(Bloomberg) -- Chinese and Russian companies are developing an attack drone similar to an Iranian model deployed in Ukraine, European officials familiar with the matter said, a sign that Beijing may be edging closer to providing the sort of lethal aid that western officials have warned against.

The companies held talks in 2023 about collaborating to replicate Iran’s Shahed drone, and started developing and testing a version this year in preparation for shipment to Russia, said the officials, who asked not to be identified to discuss private information. The Chinese drones have yet to be used in Ukraine, they said.

Providing Russia a Shahed-like attack drone would mark a deepening of Beijing’s support for Russia despite repeated warnings from the US and its allies. President Xi Jinping has sought to portray China as neutral in the conflict in Ukraine even as western officials say it’s provided components and other support for President Vladimir Putin’s forces.

At the same time, US officials have said China is holding off directly providing weapons and artillery, something that would signal an unprecedented escalation and almost certainly trigger more forceful action — such as sanctions — against the world’s second-biggest economy.

Some nations believe that providing Russia with drones for attack purposes would cross the line into lethal aid, two of the officials said. One person familiar with the matter said the US assessment is China is weighing whether to send fully built unmanned aerial vehicles, but in the meantime is sending kits that can be converted into attack drones. The US still doesn’t conclude that China is sending lethal aid to Russia, the person said, while acknowledging that other nations may have a different interpretation.

Ukraine’s President Volodymyr Zelenskiy said in an interview Wednesday with Bloomberg Television that he had read this report. “We don’t have 100% evidence that Chinese weapons are shipped to Russia,” he said in response. “The Chinese leader told me that he won’t do that. Some components are there — like for drones. Some dual-use, they are probably there. But those are not only Chinese. They are also shipped from some European countries, unfortunately. And one can fight that. I think that if the Chinese leader wanted this not to happen, it would not happen.”

China doesn’t provide weapons to the parties of the Ukraine conflict and strictly controls exports of dual-use articles, Liu Pengyu, the spokesman for China’s embassy in the US, said in a statement. 

“On the Ukraine crisis, it is quite clear to the international community who is calling for dialogue and striving for peace, and who is fueling the fight and inciting confrontation,” Liu said. “We urge the relevant countries to immediately stop fueling the fight and inciting confrontation.”

Russia’s defense and foreign ministries didn’t immediately reply to requests for comment.

Russia has used thousands of Shahed drones against Ukraine since the beginning of the war, even building a factory to mass-produce the Iranian-developed technology, which is relatively cheap to build but costly to defend against.

But Russia still relies on countries like North Korea and Iran for supplies, and on China for critical parts and components. One worry is that China could produce a drone similar to the Shahed at a far greater rate than Iran or Russia, the officials said. 

How and Why Russia Is Using Iranian Drones in Ukraine: QuickTake

The officials didn’t identify the drone under development, but Chinese defense websites and several media outlets have reported the country is developing a kamikaze attack drone called the Sunflower 200, which is described as similar in appearance to the Iranian Shahed 136 drone. 

Bloomberg News reported in April that China was providing Russia with satellite imagery for military purposes, microelectronics and machine tools for tanks, as well as a swath of technologies used in weapons or needed to produce them.

“China takes every effort, every chance it can get to argue that somehow it’s a neutral player in this war in Ukraine, but in reality the PRC is providing a long list of dual-use components, things like machine tools and microelectronics that are enabling Russia to pursue this war of aggression in Ukraine,” US Ambassador to NATO Julianne Smith told Bloomberg Television on Tuesday, referring to China by its official name, the People’s Republic of China.

“Here inside NATO, we’re making sure that we can expose the fact that the PRC is no longer a neutral player and warn China about the risk of getting behind Russia in this unprovoked war of aggression,” she said.

Back in May, UK Defense Secretary Grant Shapps provoked a tiff with Washington when he suggested that China was working to provide Russia with lethal aid. US National Security Adviser Jake Sullivan said that to date, the US hadn’t seen China providing weapons directly to Russia. 

--With assistance from Andrea Palasciano, Kriti Gupta, Daryna Krasnolutska and Annmarie Hordern.

(Updates with President Zelenskiy’s comment in sixth paragraph)

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