Find it difficult to comprehend the rationale behind the MLUs for the 051B, 052B, and SOVs (including the first two 054s). While I know that members of this community may come up with various scenarios and logics, but given the scope of these DDGs, the current MLU campaigns are a waste of funds, time and resources.
It may, however, be suitably equipped with more VLS and other armament systems as well as the newest radars, sensors, and equipment (AESA panels etc.), which would undoubtedly supplement the 052Ds and PLAN for the First Island Chain (at least 2nd line of defense with 054As).
Seeing the recent MLU drive the fate of 051Cs/052Cs are not bright too
Apart from what @gelgoog and @plawolf have explained - All the Chinese DDG classes which precede the 052C are being turned into essentially large FFGs are also mainly because the PLAN had no other choices.
Inherent of the original designs of those DDGs, there is negligible potential to upgrade all those 051B, 051C, 052 and 052B DDGs to have equivalent capabilities to the 052Cs (of which their introduction essentially marked a new chapter for the PLAN, i.e. the AESA AEGIS-era), let alone the 052Ds - Or in other words, making them equally if not similarly as capable of fighting high intensity naval warfare on the high seas as those Chinese AEGIS DDGs. Even if there is the potential, the enormous costs and efforts required to realize that would be better spent building more 052Ds, 055s and their successors/follow-ons.
Therefore, it makes more sense to upgrade them into essentially large FFGs, as the modifications involved would be less demanding and easier to achieve, alongside the pros of sharing similar systems with the 054/054A FFGs that are already widespread across the PLAN.
Sure, "losing" 11x DDGs certainly sounds like a big loss in a fleet of 50x DDGs (i.e. one-fifth of the entire force) - But now, the PLAN is actually commissioning way more new warships per year than they are retiring older ships. So there's that.
