- Jerry Lampe/Reuters
- The Chinese defense industry is growing rapidly, with a handful of Chinese firms displacing Western defense powerhouses.
- A list of the world’s top 100 defense firms published by Defense 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 defense firms among the top 25 comes as China invests heavily to upgrade its military and build a world-class fighting force.
- Visit BusinessInsider.com for more stories.
The Chinese defense industry is making some waves as several Chinese firms have begun displacing traditional Western defense powerhouses in global rankings.
Last year, not a single Chinese company had even cracked the world’s top 100 defense firms, according to a list published annually by Defense News. This year, six Chinese defense 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 defense revenue just shy of $25 billion, ranks fifth, outpacing US and UK defense 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 defense 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 analyzing Chinese companies – the sudden appearance of Chinese defense firms high on the list may also highlight the rapid growth of China’s defense industrial base as China works to modernize 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 Defense 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 percent of its own in more than a century. China’s GDP is currently around 63 percent 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 defense spending during the next decade,” the Department of Defense explained in its 2019 report on China’s military might, noting that these increases “will help support [People’s Liberation Army] modernization, develop an integrated military-civilian defense industry, and explore new technologies with defense applications.”
The Pentagon identified the key elements of China’s military modernization as investments in domestic defense, the development of the defense 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 Defense Intelligence Agency, wrote in a letter prefacing a 2019 DIA report on China’s military modernization.
“In some areas,” he added, “it already leads the world.”