Global demand for weapons is booming, but China’s big defense companies are losing revenue as purges, budget strains, and weak exports hit key programs.
News Analysis
As wars in Ukraine and Gaza drive demand for weapons, most of the world’s largest arms companies are selling more than ever, while China’s arms giants are seeing their sales shrink.
Revenues for the top 100 arms producers rose by 5.9 percent to a record $679 billion in 2024, according to new data from the Stockholm International Peace Research Institute (SIPRI) released earlier this month. China stands out as the big exception: the combined arms revenues of the eight Chinese companies on the list fell by 10 percent to $88.3 billion, the largest drop among major arms-producing countries.
Analysts say the decline reflects three overlapping problems for the Chinese regime’s defense industry: Chinese leader Xi Jinping’s corruption purge, which is freezing and delaying contracts; a slowing economy that is forcing hard choices inside the People’s Liberation Army (PLA); and Chinese weapons that are struggling to compete overseas.
They told The Epoch Times that these problems may slow China’s military buildup or push some programs beyond Beijing’s original goal of building the capability to take Taiwan by force around 2027.
SIPRI’s new ranking shows that North American and European companies raised their arms revenues in 2024, with sharp increases in countries such as Japan and Germany. Asia–Oceania was the only region where total arms-industry revenue fell, and SIPRI says that was “almost entirely” because of China’s 10 percent decline.
Among China’s eight listed companies, some were hit especially hard. China North Industries Corporation (NORINCO), the country’s biggest producer of land weapons such as tanks, artillery, and armored vehicles, saw its arms revenue fall by 31 percent last year.
Aviation Industry Corporation of China (AVIC), the main military aircraft maker, and China Aerospace Science and Technology Corporation (CASC), which builds missiles and space systems, also reported lower sales.
Only two companies grew: China State Shipbuilding Corporation (CSSC), which builds warships and submarines, and Aero Engine Corporation of China (AECC), which makes jet engines, each with high single-digit growth.
By Sean Tseng
