China’s Arms Sales Drop Amid Military Purges, Report Says

China’s state-owned military giants had a 10 percent drop in sales in 2024 amid corruption allegations against the country’s defense officials, according to a research center that tracks global armaments and conflicts.

The “substantial drop” in the total arms revenues of Chinese companies made Asia and Oceania the only region with decreased arms sales in 2024 amid a global boost, the report, published on Dec. 1 by the Stockholm International Peace Research Institute (SIPRI), found.

China’s weapons revenue fell despite three decades of rising defense budgets amid Beijing’s growing strategic rivalry with the United States and tensions over Taiwan and the hotly disputed South China Sea.

“A host of corruption allegations in Chinese arms procurement led to major arms contracts being postponed or canceled in 2024,” Nan Tian, director of the SIPRI Military Expenditure and Arms Production Programme, said in a statement. “This deepens uncertainty around the status of China’s military modernization efforts and when new capabilities will materialize.”

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.

Nine Chinese companies, which are all controlled by the Chinese Communist Party (CCP), shared 13 percent, or $88.3 billion, of 2024’s global arms revenues. This means that China remains second out of all countries in terms of arms sales, but its share is smaller than in 2023, when it was 16 percent.

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.

According to SIPRI’s previous estimate, Beijing’s military spending increased in 2024 from about $258,000 to about $286,000. That is an increase of more than 5.5 percent.

Dropped Sales Amid Purges

SIPRI’s report shows that seven of China’s top nine weapons companies lost revenue in 2024, ranging between 1 percent and 31 percent.

Revenue for the Aviation Industry Corp. of China, China’s largest arms producer, fell by 1.3 percent because of delayed deliveries of military aircraft, the report states.

China North Industries Group Corp. (Norinco) suffered the sharpest decline (31 percent) after the company’s chairman and military division head were removed over corruption allegations, SIPRI stated.

China Aerospace Science and Technology Corp., which produces rockets and missiles, had 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 reads.

Almost all of China’s military corporations went through shake-ups in recent 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 chairman 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.

China Aerospace Science and Technology Corp.’s former chairman 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 Corp.’s revenue declined by 10 percent in 2024, according to SIPRI. He Wenzhong, the company’s former vice president, was removed in April 2024 and handed a suspended death sentence in July after being convicted of embezzling nearly $41 million.

Chen Guoying, former chairman of China South Industries Group Corp., was removed from the post in 2024. The company’s former vice president, Liu Weidong, was arrested and charged with corruption in late November. The company had a 9.7 percent drop in revenue last year.

Yu Jianfeng of China National Nuclear Corp. was removed as chairman in May. Before his removal, he had not been seen in reports of public events. The company’s revenue dropped by 8.2 percent in 2024, SIPRI stated.

Zhou Xinmin, former chairman of Aviation Industry Corp. of China, was removed in July without explanation. One of his predecessors, Tan Ruisong, was charged in August with corruption.

Correction: A previous version of this article misspelled Yin Jiaxu’s name and misstated the year when Wu Yansheng was replaced as China Aerospace Science and Technology Corp. chairman and Party secretary. The Epoch Times regrets the errors.