China is the Second Largest Arms Producer in the World After US: SIPRI Report

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New Delhi: China is the second largest arms producer in the world after US but ahead of Russia, says a new research from the Stockholm International Peace Research Institute (SIPRI). This research represents the most comprehensive picture of Chinese companies’ weapons production to date.

A scoping 20-page study to estimate the financial value of the arms sales of companies in the Chinese arms industry—using a new methodology—found information on four companies: the Aviation Industry Corporation of China (AVIC), the China Electronics Technology Group Corporation (CETC), the China South Industries Group Corporation (CSGC) and the China North Industries Group Corporation (NORINCO). These four companies cover three main sectors of conventional arms production: aircraft, electronics and land systems.

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All 10 of the major arms companies (i.e. excluding the China Academy of Engineering Physics, a research institute) produce both military and civilian goods and services.

In the past, a lack of transparency has meant that the value of Chinese companies’ arms sales has been either unknown or difficult to reliably estimate. For this reason, the SIPRI Top 100—an annual ranking of the world’s 100 largest arms-producing and military services companies—has so far not been able to include Chinese arms companies.

SIPRI identified information from 2015–17 on the value of arms sales by major Chinese arms companies. The research looks at four companies for which credible financial information is available. The companies cover three sectors of conventional arms production: aerospace, electronics and land systems. With the increase of available data on these companies, it is now possible to develop reasonably reliable estimates of the scale of the Chinese arms industry.

The SIPRI report says based on estimated arms sales in 2015–17, the four major Chinese arms companies chosen for the study can now finally be compared with the major arms companies from the rest of the world. In 2017, of the 20 largest companies in the SIPRI Top 100, 11 were based in the US, six in Western Europe and 3 in Russia. If the four Chinese arms companies investigated in the study were included in the Top 100, they would all rank among the top 20, with combined estimated arms sales totalling $54.1 billion. Three of the companies would be ranked in the top 10.

The largest of the Chinese companies is Aviation Industry Corporation of China (AVIC), which with arms sales totalling $20.1 billion would rank sixth largest in the world. China North Industries Group Corporation (NORINCO), which would place eighth in the Top 100 with sales of $17.2 billion, is in fact the world’s largest producer of land systems.

According to SIPRI report, contrary to most other major global arms producers, Chinese arms companies specialise primarily in one arms production sector, for example AVIC produces mostly aircraft and avionics. Most of the large non-Chinese arms companies produce a wider range of military products across different sectors—covering aerospace, land systems and shipbuilding within one company.

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