Revenues at China’s top military firms fell last year as a sweeping anti-corruption drive disrupted arms contracts and procurement, according to a study released Monday by the Stockholm International Peace Research Institute (SIPRI). The decline stands in sharp contrast to global growth in the defense sector, driven by ongoing conflicts in Ukraine and Gaza as well as broader geopolitical tensions, Reuters reported.
SIPRI researchers noted that multiple corruption allegations within China’s arms procurement system led to the postponement or cancellation of major contracts in 2024. “This deepens uncertainty around the status of China’s military modernisation efforts and when new capabilities will materialise,” said Nan Tian, director of SIPRI’s Military Expenditure and Arms Production Programme.
The revenue decline of 10 percent among China’s leading defense firms contrasts with significant growth elsewhere: Japan’s top military companies saw a 40 percent rise, Germany’s increased 36 percent, and U.S. firms grew 3.8 percent. Globally, the revenues of the world’s 100 largest arms companies rose 5.9 percent to a record $679 billion, but the drop in China made Asia-Oceania the only region to see a decline among its leading arms manufacturers.
The slowdown comes despite decades of rising defense budgets in Beijing amid strategic competition with the United States and tensions over Taiwan and the South China Sea. China’s anti-corruption campaign, initiated by President Xi Jinping in 2012, reached the upper ranks of the military in 2023, targeting key units including the Rocket Force. In October, eight top generals were expelled from the Communist Party on graft charges, including Vice Chairman He Weidong, a senior member of the Central Military Commission.
State-owned giants such as AVIC, aerospace and missile manufacturer CASC, and land-systems producer Norinco saw the steepest declines. Norinco’s revenues dropped 31 percent to $14 billion as personnel shake-ups triggered government reviews and delayed projects, while AVIC’s aircraft deliveries slowed, SIPRI’s research found. China’s defense ministry and the three companies did not respond immediately to Reuters’ requests for comment.
The revenue shortfalls may affect timelines for the PLA’s advanced systems, including hypersonic and cruise missiles, nuclear weapons, drones, and aerospace programs. SIPRI researcher Xiao Liang noted that the setbacks could expose delays in the Rocket Force’s growing arsenal and other modernization initiatives, complicating the PLA’s goal of achieving key capabilities in time for its 100th anniversary in 2027.
Despite these short-term disruptions, SIPRI analysts said China’s long-term defense investment and political commitment to modernization are expected to continue, albeit with program delays, higher costs, and tighter procurement controls. The report underscores the ongoing tension between anti-corruption measures and the strategic ambitions of the People’s Liberation Army.
