China defence contractors register stellar profit for fourth consecutive year in a row: SIPRI

China’s top-tier defence contractors outpaced their US counterparts in armed sales for the fourth straight year in 2022, Swedish think tank Stockholm International Peace Research Institute (SIPRI) said in its report on Monday (Dec 4).

However, despite selling more than the US, China was still at the second spot in combined arms sales, the annual report released by SIPRI stated.

Chinese companies combined arms sales accounted for 18 per cent share, while the US maintained its top spot with a staggering 51 per cent of the market share.

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The report cited supply chain issues and labour shortages stemming from Russia’s war in Ukraine and the COVID-19 pandemic among major causes preventing US contractors from significantly ramping up production capacity, despite a surge in orders as Kyiv fights back against the Russian invasion.

The SIPRI report, titled ‘Top100 Arms Producing and Military Services Companies, 2022’ listed the top eight Chinese arms producers which registered a stellar growth last year.

Eight Chinese companies listed in report 

According to the report, six of those listees registered an increase in revenue last year, while three made it to the top 10.

The combined revenue for these eight Chinese companies grew by 2.7 per cent to $108 billion, a fourth consecutive annual increase.

China’s largest defence contractor and land systems specialist Norinco ranked seventh on the list, with revenue rising by 4.4 per cent to $22.1 billion last year, the report noted.

The Aviation Industry Corporation of China (AVIC), the country's No 2 weapons company and leading military aircraft maker, was ranked eighth with a 4.7 per cent revenue hike, to $20.6 billion, and China South Industries Group took the 21st spot on the list.

Chinese firms looking to expand export market 

Among all the Chinese companies, China South Industries Group witnessed the most rapid growth in 2022 of 12 per cent to $6.5 billion, the report said.

“This is supported by its rising military spending, which has been on [an] uninterrupted increase since 1995,” Xiao Liang, a researcher with the SIPRI military expenditure and arms production programme, told SCMP news outlet.

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“AVIC, China’s main aircraft producer, saw revenue rise for the second consecutive year, reflecting increased production of its fourth-generation combat aircraft and the fielding of fifth-generation combat aircraft, that is the J-20.”

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The study noted that efforts undertaken by these Chinese companies to expand their export market which traditionally relied on domestic sales.

(With inputs from agencies)