SIPRI Top 100 arms-producing and military service report: China’s revenue declines by 10 per cent

On 01 December, Stockholm International Peace Research Institute (SIPRI) published its top 100 arms-producing and military services report of 2024. It noted that the combined revenue of the world’s largest arms-producing and military services companies increased by 5.9 per cent in 2024, reaching USD  679 billion. The total arms revenue since the top 100 companies has increased by 26 per cent since 2015. This increase in arms revenue is attributed to European and United States companies. This has been primarily linked to the demand increase of military equipment in light of the rising geopolitical tensions and the Russia-Ukraine and Israel-Palestine wars. Another reason is the governments of the world ramping up arms procurement, adding to the lengthy backlog and several arms firms expanding their production capacity.  In 2024, alone, 38 companies expanded and created subsidiaries, out of which 17 were based in Europe and 15 in the US. While most countries in the top 100 list saw an increase, China saw a dip in its arms revenue.

Where does China stand?
China has eight firms that come under the global top 100 list of SIPRI, out of which most are subsidiaries of the Communist Party of China. On top of this list of 8 is AVICg or Aviation Company Group, it is a state-owned enterprise of Chinese conglomerates that designs, manufactures and sells to the aerospace and defence sectors.  In 2024, the revenue of AVICg fell by 1.3 per cent, where in 2023 it had 20,590 million in revenue, which fell to USD 20,320 in 2024.  CETC China, or China Electronics Technology Group Corporation, was established in 2002 owned by the CPC, providing IT services and defence equipment. The revenue fell by 10.4 per cent, wherein in 2023 it had USD 21,110 million in revenue, and in 2024 it had USD 18,920 million. NORINCO, or China North Industries Group Corporation Limited, revenue fell by 31.2 per cent in 2023 it reached USD 20,310 million and in 2024, USD 13,970 million. CSSC China, or the China State Shipbuilding Corporation, increased by 8.7 per cent in 2023, reaching USD 11,340 million, and in 2024, it made USD 12,330 million. China Aerospace Science and Technology Corporation had in 2023 USD 12,200 million in revenue, which fell by 16.1 per cent, in 2024, making USD 10,230 million. Aero Engine Corporation of China (AECC) increased its revenue by 9.6 per cent in 2024 by reaching USD 6,260 million in revenue, from 2023 USD 5,710 million in revenue. CSGC, or China South Industries Group’s revenue in 2024, fell by 9.7 per cent, making USD 4,580 million, from 2023 USD 5,070 million. China National Nuclear Corporation (CNNC) only made USD 1,670 million in revenue in 2024, an 8.2 per cent fall from 2023’s USD 1,820 million.

What does it mean?
Combined China’s revenue decreased by 10 per cent a USD 88.3 billion in 2024. This is the biggest decrease for any country listed in the top 100 report. Six of the eight companies are falling in arms revenue, while AVIC still remains China's largest arms producer and ranks 8 in the global SIPRI ranking. The most decline was seen in NORINCO, ranked 11 in the report, which is China’s biggest land system producer, with a 31 per cent decrease, due to delayed major contracts and removal of leadership, the same as AVIC. In the CASC case as well, the decline is attributed to the dismissal of their president.

The sales of China’s military firms fell in light of the anti-corruption purge in China. These purges have slowed arms contracts and procurement. SIPRI found that “The Chinese declines contrast with strong revenue growth globally for big arms and military-services companies, fuelled by wars in Ukraine and Gaza, and global and regional tensions.” This has led to major arms contracts either being postponed or cancelled. Revenue of the world’s 100 largest firms increased by 5.9 per cent, while only China saw a decline. China's weapons revenue fell despite three decades of rising defence 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.