According to a research report released by a well-known international think tank on Monday (December 1), while the export of military equipment from various countries around the world is experiencing strong growth, the revenue of large-scale military enterprises in China in 2024 unexpectedly declined. The reason for this downturn is attributed to President Xi Jinping’s anti-corruption campaign, which has slowed down the completion of weapon contracts and procurement.
The Stockholm International Peace Research Institute (SIPRI) found that amid the conflicts in Ukraine and Gaza, as well as global and regional tensions, the revenue of major arms and military services companies globally experienced a significant surge. However, in stark contrast, the revenue of military enterprises in China declined.
The data provided in the report indicates that the revenue of major Chinese military enterprises decreased by 10% in 2024 to $88.3 billion, marking the largest overall percentage decrease among countries with military export companies. In comparison, Japan saw a 40% increase in military revenue, Germany grew by 36%, and the US increased by 3.8%.
Nan Tian, Director of Military Expenditure and Arms Production Programs at SIPRI, stated, “The numerous corruption allegations in China’s weapon procurement resulted in major weapon contracts in 2024 being delayed or canceled. This has deepened the uncertainty surrounding China’s military modernization efforts and the timing of achieving new capabilities.”
The decline in China’s military exports made Asia-Oceania the only region globally where military revenue decreased, with the top 100 companies in the region experiencing a 1.2% decrease in revenue to $130 billion compared to the previous year. Meanwhile, the revenue of the top 100 global arms companies increased by 5.9% to reach a record $679 billion.
The military became one of the main targets of President Xi Jinping’s extensive anti-corruption campaign initiated in 2012. In 2023, the cleansing operation reached senior levels of the military, with the Rocket Force being a key focus.
Last October, eight senior military officers, including the country’s second-ranking general, He Weidong, were expelled from the Communist Party on charges of corruption. He Weidong had served under Xi Jinping in the Central Military Commission – the highest military command of the Chinese Communist Party.
Among them, China’s largest ground weapons manufacturer, China North Industries Group Corporation (Norinco), experienced the largest decline. Its weapon revenue dropped by 31% from $20.31 billion in 2023 to $13.97 billion in 2024, causing it to fall from the 10th to the 11th position in the global rankings.
The report highlighted that the dismissal of the chairman of the board and the head of the military department of the company following a corruption investigation last year led the government to review contracts, resulting in delays in fulfillment.
China’s largest military aerospace manufacturer, Aviation Industry Corporation of China (AVIC), achieved sales of $20.32 billion in 2024, ranking 8th globally, but experienced a 1.3% decline compared to 2023. Similarly, the revenue of China Aerospace Science and Technology Corporation (CASC) also decreased.
Research found that both companies faced project delays due to high-level personnel changes related to corruption, which led to government reviews and slower delivery of military aircraft by Aviation Industry.
Only two Chinese companies on the top 100 list recorded an increase in weapon revenue, with China Shipbuilding Group Corporation and China Aero-engine Group seeing growth of 8.7% and 9.6% respectively.
Xiao Liang, a researcher at SIPRI, expressed concerns that the timetable for the deployment of advanced systems by China’s Rocket Force may be affected. The force is primarily responsible for China’s growing arsenal of ballistic missiles, hypersonic missiles, and cruise missiles. Beijing’s aviation, aerospace, and network programs could also be influenced. Previously, China had hoped to achieve key capabilities and readiness goals before its 100th anniversary of building the army, but now uncertainties have significantly increased.
Against the backdrop of declining military revenue in China, weapons companies in Japan and South Korea continued to see growth in sales supported by strong demand in domestic and European markets.
The total weapon revenue of Japan’s five companies on the top 100 list increased by 40% to $13.3 billion, while the revenue of four South Korean manufacturers grew 31% to $14.1 billion. South Korea’s largest arms contractor, Hanwha Group, saw a 42% increase in weapon revenue from $5.6 billion to $7.97 billion.
The increase in global arms sales was mainly concentrated in Europe and the United States, with the conflicts in Ukraine and Gaza, as well as global and regional geopolitical tensions, driving up weapons revenue and new orders. US military companies maintained the largest total revenue in 2024, increasing by 3.8% to $334 billion. European total revenue grew by 13% to $151 billion.
The Stockholm International Peace Research Institute is an international independent organization dedicated to researching conflicts, arms, arms control, and disarmament. It was established based on a decision by the Swedish parliament. The institute receives funding from the Swedish government annually, accounting for approximately 45% of its budget. Additionally, it relies on funding from other organizations to carry out its research projects. The Director is appointed by the Swedish government.