- The Chinese defence industry is growing rapidly, with a handful of Chinese firms displacing Western defence powerhouses.
- A list of the world’s top 100 defence firms published by Defence News revealed that 6 of the top 15 companies are Chinese. Last year, there wasn’t a single Chinese company among the top 100.
- The appearance of eight Chinese defence firms among the top 25 comes as China invests heavily to upgrade its military and build a world-class fighting force.
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The Chinese defence industry is making some waves as several Chinese firms have begun displacing traditional Western defence powerhouses in global rankings.
Last year, not a single Chinese company had even cracked the world’s top 100 defence firms, according to a list published annually by Defence News. This year, six Chinese defence firms are among the world’s top 15, with Chinese companies occupying eight of the top 25 spots.
Aviation Industry Corporation of China, with its annual defence revenue just shy of $US25 billion, ranks fifth, outpacing US and UK defence giants General Dynamics and BAE Systems. AVIC, the top Chinese company on the list, is trailing closely behind Raytheon and Northrop Grumman, two leading US defence firms.
AVIC is the company behind the development of China’s fifth-generation J-20 fighter and the new H-20 stealth bomber, among other projects.
While it is possible that past rankings suffered from insufficient data – a common problem when analysing Chinese companies – the sudden appearance of Chinese defence firms high on the list may also highlight the rapid growth of China’s defence industrial base as China works to modernise its military to build a world-class force that can fight and win wars, an ambition repeatedly stressed by Chinese leadership.
China, as a top strategic rival to the US, is a unique challenger.
“The Soviets were never able to match, much less overcome, America’s technological superiority. The same may not be true for China,” former Deputy US Defence Secretary Robert Work and his colleague Greg Grant wrote in a recent report.
China’s economic power makes it highly unlikely that the US will be able to spend its way to victory in its strategic competition with China, the authors contend. The US has not faced a competitor with a Gross Domestic Product (GDP) greater than 40 per cent of its own in more than a century. China’s GDP is currently around 63 per cent of that of the US, and China is projected to eventually have the world’s largest economy.
“China has the political will and fiscal strength to sustain a steady increase in defence spending during the next decade,” the Department of Defence explained in its 2019 report on China’s military might, noting that these increases “will help support [People’s Liberation Army] modernisation, develop an integrated military-civilian defence industry, and explore new technologies with defence applications.”
The Pentagon identified the key elements of China’s military modernisation as investments in domestic defence, the development of the defence industrial complex, a growing science and technology research and development base, civil-military integration, and the acquisition of foreign technology.
“The result of this multifaceted approach to technology acquisition is a [People’s Liberation Army] on the verge of fielding some of the most modern weapon systems in the world. ,” Lt. Gen. Robert Ashley, the director of the Defence Intelligence Agency, wrote in a letter prefacing a 2019 DIA report on China’s military modernisation.
“In some areas,” he added, “it already leads the world.”