Revenues of Chinese military giants fell last year as a crackdown on corruption slowed arms deals and deliveries, Reuters notes.
The decline in China contrasts with strong global revenue growth for major arms and military services companies, fueled by the wars in Ukraine and Gaza as well as global and regional tensions, according to a study by the Stockholm International Peace Research Institute (SIPRI).
"A series of allegations of corruption in Chinese arms procurement have led to the postponement or cancellation of major arms contracts in 2024," said Nan Tian, director of the SIPRI's military expenditure and arms production programme.
"This deepens uncertainty about the state of China's military modernisation efforts and when new capabilities will materialise."
The People's Liberation Army was one of the main targets of a wider anti-corruption campaign ordered by President Xi Jinping in 2012, which reached the highest levels of the military in 2023, when it targeted the missile force.
Eight senior generals were expelled from the ruling Communist Party on corruption charges in October, including the country's second-ranking general, He Weidong. He served under Xi on the Central Military Commission, China’s top military command body. Asian and Western diplomats say they are still trying to gauge the impact of the crackdown on China’s ongoing military rise and how far it extends up the chain of command. Revenues at China’s leading military companies fell 10 percent last year, while those in Japan rose 40 percent, Germany 36 percent and the United States 3.8 percent, SIPRI data showed. Revenues at the world’s 100 largest arms companies rose 5.9 percent to a record $679 billion, the report said. China’s decline, however, was enough to make Asia-Pacific the only region to see a decline in revenue for its leading companies. arms companies.
China's arms revenue has fallen despite three decades of increases in Beijing's defense budget amid growing strategic competition with the United States, the traditional military power in Asia, and tensions over Taiwan and the disputed South China Sea.