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China’s Defense Industry Barges Into Global Spotlight

Posted by Paul McLeary on

Chinese DF-15B Short-Ranged Ballistic Missile (SRBM) during PLA Rocket Force exercise.

WASHINGTON: The burgeoning Chinese defense industry has blown past the majority of its US counterparts while leaving virtually all of Europe in the dust, according to a new study of the global defense market.

A whopping six Chinese companies have stormed into the top 15 global defense firms according to a new report by Defense News, which today released its annual Top 100 list of the biggest defense companies in the world. 

The top Chinese company on the list, Aviation Industry Corporation of China, boasts an estimated revenue from defense sales of $24 billion, pushing past traditional US defense giants General Dynamics and BAE Systems. The company has also inched within roughly a billion in revenue of fellow behemoths, Raytheon and Northrop Grumman, both of which pulled in just over $25 billion in 2018.  

Two other Chinese companies, China North Industries Group Corporation Limited, and the China Aerospace Science and Industry Corporation, made the top 10.

Pentagon officials have long bemoaned the Chinese government’s ability to order industry to respond quickly — and completely — to its demands. The new report shines a spotlight on the gravity of those complaints while shining a spotlight on secretive Chinese defense industry. 

During his recent nomination hearing to become the next chairman of the Joint Chiefs, Gen. Mark Milley said when it comes to military technology and doctrine, “China went to school on us,” telling the Senate Armed Services Committee, “they watched us very closely in the First Gulf War, the Second Gulf War. They watched our capabilities. And in many many ways, they have mimicked those, and they have adopted many of the doctrines and organizations.”

Some of the huge technological strides Beijing has made recently come as the result of rules that require foreign companies to share their technological expertise in exchange for access to China’s vast market. Using those technologies, combined with a willingness to spend, has allowed Chinese defense companies to grow at an astounding rate.

A Defense Intelligence Agency report released in January said that this state of affairs isn’t likely to change any time soon: “China has the political will and fiscal strength to sustain a steady increase in defense spending during the next decade, which will help support PLA modernization, develop an integrated military-civilian defense industry, and explore new technologies with defense applications,” the report concludes.

Given the poor transparency rules governing Chinese companies and China’s poor record of disclosing defense spending these companies could well be much larger than estimated.

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