China’s Arms Sales Drop Amid Military Purges, Report Says
Udumbara
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China’s state-owned military giants saw a 10 percent drop in sales last year amid corruption allegations against the country’s defense officials, according to a research center that tracks global armaments and conflicts.
China’s weapons revenue fell despite three decades of rising defense budgets in Beijing’s growing strategic rivalry with the United States, Asia’s traditional military power, and tensions over Taiwan and the hotly disputed South China Sea.
SIPRI analyzed the arms revenues of the world’s top 100 defense companies. The total revenue increased by 5.9 percent in 2024 to a total of $679 billion.
Arms sales of Japanese, German, and South Korean defense companies grew the fastest, with revenue increases of 40 percent, 36 percent, and 31 percent, respectively.
Of the top 100 companies, 39 are based in the United States. They created 49 percent, or $334 billion, of the sales during the year—a 3.8 percent rise from 2023.
The combined revenue of China’s biggest military companies dropped by 10 percent, driving the revenue of Asia and Oceania companies down by 1.2 percent.
Dropped Sales Amid Purges
SIPRI’s report showed that seven of nine of China’s top weapons companies lost revenue in 2024, ranging between 1 percent and 31 percent.Revenue for the Aviation Industry Corporation of China (AVIC), China’s largest arms producer, fell by 1.3 percent due to delayed deliveries of military aircraft, the report said.
China North Industries Group Corporation Limited (Norinco) suffered the sharpest decline (31 percent) after the company’s chair and military division head were removed over corruption allegations, SIPRI said.
China Aerospace Science and Technology Corporation (CASC), which produces rockets and missiles, saw the second-largest drop in revenue (16 percent).
“This was largely due to the postponement of military satellite and launch-vehicle projects after its president was dismissed in late 2023 based on corruption allegations,” the report said.
Almost all of China’s military corporations went through shake-ups in the past years amid Chinese leader Xi Jinping’s anti-corruption campaign and the CCP’s internal power struggle. Many of the company heads disappeared from news headlines months before their removal.
In April 2024, Norinco’s Liu Shiquan was replaced as chair and CCP secretary of the company after he was excluded from the Chinese People’s Political Consultative Conference in March 2024. One of Liu’s predecessors, Yin Jiaxu, was arrested in 2021 over corruption allegations.
CASC’s former chair and party secretary Wu Yansheng, who was replaced in March 2024, had been excluded from the Chinese People’s Political Consultative Conference along with Norinco’s Liu. Wang Xiaojun and Han Shuwang, from the same conglomerate, were also removed as party consultants.
China Electronic Technology Group Corporation (CETC) saw its arms revenue decline by 10 percent in 2024, according to SIPRI. CETC’s former Vice President He Wenzhong was removed in April 2024 and handed a suspended death sentence in July after being convicted of embezzling nearly $41 million.
China South Industries Group Corporation (CSGC) former chair Chen Guoying was removed from the post in 2024. CSGC’s former vice president, Liu Weidong, was arrested and charged with corruption in late November. The company saw a 9.7 percent drop in revenue last year.
Yu Jianfeng of China National Nuclear Corporation (CNNC) was removed as chair in May. Before his removal, he had not been seen in reports of public events. CNNC lost 8.2 percent in revenue in 2024, SIPRI said.
Zhou Xinmin, former chair of AVIC, was removed in July without explanation. One of his predecessors, Tan Ruisong, was charged in August with corruption.
