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SIPRI Says China Second Largest Arms Producer Ahead of Russia

Published Jan 27, 2020
Updated Feb 29, 2020

A Paper by Stockholm International Peace Research Institute (SIPRI) revealed that China is the second-largest arms producer in the world, behind the United States but ahead of Russia.

The rise of the Chinese arms industry having overtaken its former Communist rival Russia and attempting to play catch up with the United States will denote the depth and volumes in production which are wholly indigenous.

SIPRI has 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 combined estimated arms sales totalling $54.1 billion.

SIPRI has identified 20 major Chinese arms manufacturers – Aviation Industry Corporation

of China (AVIC), the country’s largest aircraft producer; China Aerospace Science and Industry Corporation (CASIC), China’s main missile and space systems producer; China Electronics Technology Group Corporation (CETC), the leading producer of electronics and components for military goods (e.g. radars, software); China North Industries Group Corporation (NORINCO) and China South Industries Group Corporation (CSGC), China’s leading makers of land systems; and China Shipbuilding Industry Corporation (CSIC) and China State Shipbuilding Corporation (CSSC), the major shipbuilding companies.

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 world’s largest producer of land systems.

Contrary to most other major global arms producers, Chinese arms companies specialize 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.

SIPRI also believes that these new estimates are most likely still an underestimate. A lack of transparency in the arms sales figures of Chinese arms companies continues to hinder a complete understanding of China’s arms industry.

Comparing the arms sales estimates against China’s military expenditure figures  these are see as varying between 24 to 30 percent of the total defence budget as per SIPRI estimates. This implies China continues to spend more on personnel costs proportionately than Western armed forces.