I doubt the Australian and/or US governments would allow MST to sell their IP and secrets to China. From memory, MoD was approached some years back by some back channel in an effort to take the technology.
Why would China want the system?
Well, firstly lets look back to the OICW. This originally was to provide front line infantry with "smart" ammo in the 40mm calibre. Such air-burst ammo, delivered with the aim of a laser distance finder and target solution could pop a grenade right on top of someone hiding in a trench or foxhole.
The system was too heavy, as it did not use metalstorm technology. It was downsized to 20mm and then lifted to 25mm to increase lethality and probablility of kill. The result? Well the US is planning to buy 12500 XM25's at a cost of $25000 a pop. Ammo to cost $25 a round. This has already been field tested in Afghanistan and the order should come in 2011.
The XM29 failed, http://en.wikipedia.org/wiki/XM29
The metalstorm solution could be deadly given the calibre, and light weight design. Unfortunately MST never got the order... who knows why.
We all know MST could also be used for perimeter defence, landmine replacement, robotic armament, less than lethal etc etc. The US have found alternatives under the FCW program... however China and other countries don't have access to the US arms. So they are forced to develop it themselves.
It's a pity the Aussie Government didn't push ahead and arm our troops with MST weapons. It could have been a massive export earner. The XM25 order is over $300m with an annuity of ammo and replacements.
MST is drained of funds, and I suspect unless they can pull off a miracle the technology would end up with some large US arms manufacturer.
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