Why are Chinese defence firms missing out on global arms sale surge as US keeps crown?

Chinese arms makers saw lowest annual revenues in four years, SIPRI top 100 report says, while US keeps No 1 spot with 41 firms on list

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A Chinese stealth fighter model displayed at the China International Aviation and Aerospace Exhibition in Zhuhai on November 14. China’s year-on-year arms sales revenue increase was 0.7 per cent, the lowest annual level of growth since 2019, according to a SIPRI report. Photo: AFP

Published: 7:00am, 2 Dec 2024

Chinese defence companies saw their lowest annual revenue growth in four years amid a domestic economic slowdown while global arms sales continued to grow, fuelled by demand from the wars in Ukraine and the Middle East, a Swedish think tank report said.

According to the Stockholm International Peace Research Institute’s (SIPRI) annual report on the revenues of top 100 global defence companies published on Monday, total sales of arms and military services reached US$632 billion in 2023, an increase of 4.2 per cent from 2022.

Increases in arms revenues were seen in all regions and almost three-quarters of companies boosted their earnings, with particularly sharp rises among companies based in Russia and the Middle East as well as in the Asia-Pacific, amid growing tensions in East Asia.

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Forty-one of the top 100 firms on the list were from the United States, which maintained its No 1 ranking for global arms revenue at US$317 billion, growing by 2.5 per cent over 2022 and accounting for half of the total arms revenues on the list.

Since 2018, the top five companies on the SIPRI list have all been based in the US, and 30 of the 41 US companies on the latest list have increased their arms revenues.

China ranked second with nine companies on the top 100 list, three of which made the top 10. The combined arms revenue for the nine firms was US$103 billion, equal to 16 per cent of the total for the top 100.

However, China’s year-on-year revenue increase was just 0.7 per cent, the lowest annual level of growth since 2019. Five of the nine companies recorded declines in their arms revenues, with the report citing China’s “deepening economic slowdown” as the reason.