Chinese Arms Sellers Expanded in 2020, Second Only to US

A man walks among supersonic cruise missiles at the 13th China International Aviation and Aerospace Exhibition in Zhuhai in southern China's Guangdong province on Sept. 28, 2021. (Noel Celis/AFP via Getty Images)

Five Chinese companies accounted for roughly 13 percent of all arms sales made by the world’s 100 largest arms producers in 2020, according to a new report by the Stockholm International Peace Research Institute (SIPRI).

The five companies, NORINCO, AVIC, CETC, CASIC, and CSGC, accounted for roughly $66.8 billion last year, a 1.5 percent increase over 2019. All five of the companies are state-owned, and conduct their business on behalf of the Chinese Communist Party (CCP). Each also made it into the top 20 of the list, with three making it to the top 10.

The report noted that the five companies listed may not account for all the Chinese entities that ought to be listed in the top 100, as CCP regulations often limit what information is made public regarding such things.

“Other Chinese companies may have arms sales high enough to rank among the Top 100,” according to a SIPRI press release, “but there is insufficient data to include them in the ranking.”

Arms sales increased throughout the world even as the global economy was buffeted by the CCP Virus pandemic, commonly known as the novel coronavirus. Sales of arms and military services by the industry’s 100 largest companies increased 1.3 percent, though the global economy contracted by 3.1 percent.

“The industry giants were largely shielded by sustained government demand for military goods and services,” said Alexandra Marksteiner, a researcher at SIPRI.

“In much of the world, military spending grew and some governments even accelerated payments to the arms industry in order to mitigate the impact of the Covid-19 crisis.”

American companies accounted for roughly 54 percent of all arms sales among the top 100 companies, amounting to some $285 billion across 41 entities. The largest arms seller on the list was Lockheed Martin, with $58.2 billion in arms sales in 2020.

The collective sales of those companies on the list that were based outside of China, Europe, Russia, and the United States was $43.1 billion, or roughly 8.1 percent of the total.

The continued growth of China’s defense sector comes amidst an all-out push by the CCP to develop new military technologies and expand its nuclear arsenal.

The SIPRI report found that new technologies, particularly space-based systems, were driving up sales in both the United States and China, and were likely behind a trend of high-profile mergers and acquisitions in the United States.

“This trend is particularly pronounced in the space sector,” Marksteiner said. “Northrop Grumman and KBR are among several companies to have acquired high-value firms specialized in space technology in recent years.”

The report also noted that the CCP’s policy of military-civil fusion was a driving factor in pushing Chinese arms companies up the ranks of the world’s top sellers.

“In recent years, Chinese arms companies have benefited from the country’s military modernization programs and focus on military-civil fusion,” said Nan Tian, a senior researcher at SIPRI.

“They have become some of the most advanced military technology producers in the world.”