China second to US in global arms market with three firms in top 10 manufacturers

• United States still the leading country in arms spending and sales, followed by China, driven partly by its military modernisation
• Six American and three Chinese companies dominate the top 10 makers in Swedish think tank's annual ranking

Kristin Huang

Three Chinese arms companies have been ranked among the world's top 10 for weapons sales in 2019 in a Stockholm security think tank's annual list of the largest arms manufacturers.

The United States was the leading nation in terms of both arms spending and sales of weapons, with China in second place in both respects.

In the ranking by Stockholm International Peace Research Institute (SIPRI), six US companies and three Chinese firms made up the top 10 along with one from Britain.

Aviation Industry Corporation of China, China Electronics Technology Group Corporation and China North Industries Group Corporation were ranked sixth, eighth and ninth respectively in the list of companies.

A fourth Chinese arms firm, China South Industries Group Corporation, was ranked 24th among the 25 companies examined in SIPRI's report, released on Monday.

Data from SIPRI's arms transfer database showed that aircraft, ships, missiles, armoured vehicles and air defence systems were the four Chinese firms' top revenue generators in 2018 and 2019, totalling nearly US$2.5 billion, with the top three buyers of Chinese weapons being Pakistan, Bangladesh and Thailand.

The combined revenue of the four Chinese companies grew by 4.8 per cent overall between 2018 and 2019, to US$56.7 billion.

This was the first time SIPRI had included Chinese companies in its annual ranking, having previously cited a lack of reliable data.

The report said overall arms sales by the top 25 companies rose by 8.5 per cent in 2019 to US$361 billion, with the leading five all coming from the United States: Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics, with combined arms sales of US$166 billion. Another American firm, L3Harris Technologies, was in 10th place, while Britain's BAE Systems was seventh.

The US arms industry accounted for 61 per cent of sales by the world's top 25 manufacturers last year, followed by China in second place with 16 per cent, according to the report. Six western European companies collectively accounted for 18 per cent, while the two Russian companies in the list made up 4 per cent.

Zhou Chenming, a military expert in Beijing, said relatively cheap prices and good quality made Chinese weapons competitive in the global arms market.

“China has invested huge money in developing cutting-edge weapons for years, and now Chinese weapons have improved their performance and are at reasonable prices which can be accepted by many developing countries,” Zhou said.

But Zhou did not expect the growth for Chinese companies to continue at the same rate, partly because of international polarisation driven by China's rivalry with the US.

“I think most US allies will continue buying arms from the US, and Russia will keep its own market share, and it will be quite difficult for China to increase its arms export revenue,” he said.

Nan Tian, a senior researcher from SIPRI, said Chinese arms companies had benefited from the drive to modernise the country's People's Liberation Army since 2015.

China was already viewed by the United States as its strongest competitor in cutting-edge military technologies such as artificial intelligence and quantum computing, according to a US Congressional Research Service report released in August.

“China and the United States are the two biggest states in terms of global arms spending, with companies cut to size,” Lucie Beraud-Sudreau, director of SIPRI's arms and military expenditure programme, was quoted as saying by Agence France-Presse.

The US has dominated the market for decades, but China's growth “corresponds to the implementation of reforms to modernise the People's Liberation Army”, she said.

https://www.scmp.com/news/china/military/article/3112823/pla-reforms-drive-china-second-place-after-us-global-arms