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China Defense Industry Report: 2016 Edition

China Defense Industry Report: 2016 Edition

The armed forces of the People’s Republic of China are known as the ‘Chinese People’s Liberation Army (popularly known as PLA) which operates under the Central Military Commission (CMC). The CMC is responsible for providing unified commands and for leading the armed forces of China, along with determining the operational structure and strategies to be adopted by the military. The PLA has 7 Military Regions under the General Staff Headquarters. The PLA has recently restructured its departmental structure and added a new PLA Strategic Support Force as a new service branch in December 2015.

China’s defense industry has been relishing the most productive and lucrative years in its history, which is driven by plentiful state funding, pent-up domestic demand, and access to and development of critical technological know-how on equipment, aircrafts, shipbuilding, missiles etc.

The key factors which are anticipated to drive China’s Defense Industry include increasing military expenditure of China, reducing import reliance, increasing economic growth and rising exports. Some of the noteworthy developments of this industry include increasing asset injections, changes in pricing models and management incentives as a part of the SOE reforms, increasing modernization of the PLA. However, the growth of respective industry is hindered by the lower profitability and lack of global competences.

This report offers a comprehensive analysis of the Chinese defense industry, along with an extensive study of its various segments including Aviation Industry, Shipbuilding Industry and Nuclear Industry. Furthermore, market dynamics such as key trends and development; and challenges are analyzed in depth. On the contention front, the China defense industry is dominated by several large conglomerates including the AVIC Group, China Shipbuilding Industry Corporation, China State Shipbuilding Corporation etc. The competitive landscape of the respective market, along with the company profiles of the leading players are also discussed in detail.


1. China Defense system
1.1 Overview
Table 1: PLA Segmentation by Departments (Old Structure)
Table 2: PLA Segmentation by Departments (New Structure)
1.2 Industry Analysis
1.2.1 Global Active Military Personnel – Top 10
Table 3: Global Active Military Personnel –Top 10 (2015)
1.2.2 Global Defense Budget – Top 10
Table 4: Top 10 Countries with Large Military Budget Worldwide (2015E)
1.2.3 Military Expenditure of US, China and Russia
Table 5: Military expenditure of US, China and Russia (2011-2014)
Table 6: YoY change in Military Expenditure in US, China and Russia (2011-2014)
1.2.4 China’s Military Spending by Allocation
Table 7: China’s National Defense Spending by Allocation (2013-2014)
1.2.5 China’s Military Equipment Expenditure Forecast
Table 8: Estimated National Defense Expenditure on Equipment (2014-2020E)
1.2.6 China’s Military Equipment Trade by Category
Table 9: China’s Defense Equipment Exports/Imports by Category (2014)
1.2.7 China’s Military Equipment Trade by Country
Table 10: China’s Military Equipment Export by Country (2014)
Table 11: China’s Military Equipment Imports by Country (2014)
2. Aviation Industry
2.1 Overview
2.2 Industry Analysis
2.2.1 China’s Airforce Equipment Expenditures
Table 12: Estimated Expenditure on Air force Equipment (2014-2020E)
2.2.2 Global Defense Aircrafts Ownership – Top 10
Table 13: Total Defense Aircraft Ownership of Top 10 Countries (2015)
2.2.3 China’s Total Military Aircraft by Structure
Table 14: China’s Total Military Aircraft by Structure (2014)
2.2.4 Global Combat Helicopter Ownership – Top 10
Table 15: Combat Helicopter Ownership of Top 10 Countries (2014)
2.2.5 China’s Combat Helicopters Ownership by Volume
Table 16: China’s Ownership of Combat Helicopters by Volume (2013-2015E)
2.2.6 China’s Combat Helicopters Ownership by Structure
Table 17: Structure of Helicopters Owned by China (2014)
2.2.7 Global Modern Fighter Aircrafts – Top 10
Table 18: Top Countries with Modern Fighter Aircrafts Worldwide (2014)
2.2.8 China’s Modern Fighter Aircrafts by Structure
Table 19: China’s Fighter Aircrafts by Structure (2014)
2.2.9 Global Transporter Aircraft Fleet – Top 10
Table 20: Top 10 Countries with Transporter Aircraft Fleet (2014)
2.2.10 China’s Transporter Aircraft Models by Structure
Table 21: China’s Transporter Aircraft Models By Structure (2014)
2.2.11 China’s Military Aircraft Engine Industry Revenue by Types
Table 22: Military Aircraft Engines Revenue by Types (2035E)
3. Shipbuilding Industry
3.1 Overview
3.2 Industry Analysis
3.2.1 Global Ship Ownership –Top 5
Table 23: Largest Shipbuilding Nations Worldwide (2014)
3.2.2 China’s Share in Global Shipbuilding Market
Table 24: China’s Share in the Global Shipbuilding Market (2000-2015E)
3.2.3 China Shipbuilding Industry Performance by Indicators
Table 25: China’s Shipbuilding Industry by Indicators (2013-2015)
3.2.4 Global Naval Fleet Ownership – Top 10
Table 26: Top 10 Countries with Largest Naval Fleet Worldwide (2014)
3.2.5 China’s Naval Fleet by Structure
Table 27: China’s Naval Fleet Structure (2014)
3.2.6 China’s Naval Fleet by Volume
Table 28: China’s Total Submarines and Surface Vessels (2000-2020E)
4. Nuclear Industry
4.1 Overview
4.2 Industry Analysis
4.2.1 Global Nuclear Warhead Ownership – Top 5
Table 29: Countries with Biggest Nuclear Arsenal Worldwide (2015)
4.2.2 China’s Nuclear Warhead Ownership by Structure
Table 30: China’s Nuclear Weapons by Structure (2015)
4.2.3 China’s Land-Based Nuclear Missiles by Structure
Table 31: China’s Land-Based Nuclear Missiles by Structure - Actual (2015)
Table 32: China’s Land-Based Nuclear Missiles by Structure - Estimated (2020E)
4.2.4 China’s Sea-Based Nuclear Missiles by Structure
Table 33: China’s Sea-Based Nuclear Missiles by Structure – Actual (2015)
Table 34: China’s Sea-Based Nuclear Missiles Structure - Estimated (2020E)
4.2.5 China’s Other Nuclear Missiles by Structure
Table 35: Structure of China’s Other Nuclear Missiles (2015)
4.2.6 China’s Domestic Uranium Mines
Table 36: China’s Domestically Operating Mines by Share (2014)
4.2.7 China’s Equity in Uranium Mines Abroad
Table A: China’s Equity in Uranium Mines in Other Countries
4.2.8 China’s Uranium Enrichment Capacity
Table 37: China’s Uranium Enrichment Capacity (2015E)
5. Market Dynamics
5.1 Growth Drivers
5.1.1 Increasing GDP and Military Expenditure
Table 38: China’s GDP and Military Expenditure (1990-2014)
5.1.2 Growing Defense Budget Allocation
Table 39: China’s Annual Defense Budget (2005-2015E)
5.1.3 Reducing Reliance on Imports
Table 40: China’s Defense Equipment Imports (2005-2014)
5.1.4 Increasing Export Potentials
Table 41: China’s Defense Equipment Exports (2009-2014)
5.1.5 Growth of Electronic Connector Industry
Table 42: Top Sellers of Aviation Electronics Connector (2014)
Table 43: China’s Aviation Electronics Connector Industry Revenue (2012-2015E)
5.2 Trends
5.2.1 PLA Modernization as a Strategic Priority
Table B: Current and Potential Modern Defense Equipment (2015)
5.2.2 SOE Reforms in China
5.2.3 China’s Military Reforms
5.3 Challenges
5.3.1 Lack of Global Competencies
Table 44: Top 100 Defense Industry Player By Country of Operations (2015)
5.3.2 Low Profitability
Table 45: Profitability Comparison – Gross Profit Margin (2015)
6. Competitive Landscape
Table C: China’s Dominant Defense Industry Corporations
6.1 Competition on the Basis of Financials
6.1.1 On the Basis of Market Cap
Table D: Key Companies in China’s Defense Industry (2015)
Table E: Market Cap Comparison of China’s Defense Companies with International Peers (2015)
6.1.2 On the Basis of Gross & Net Profit
Table 46: Gross & Net Profit Comparison of Defense Assembly Companies in China (2015)
Table 47: Gross & Net Profit Comparison of Defense Parts and Components companies and Private Companies in China (2015)
6.2 Competition on the Basis of Market Share
Table 48: Market Share of China’s Defense Shipbuilding Industry (2014)
Table 49: Share of Overseas Revenue to Total Revenue of Major Shipbuilders (2009-2014)
Table 50: Share of New Orders Intake by CSICL, COMEC and CSSCH (2007-2015E)
7. Company Profiles
7.1 AVIC Group
7.1.1 Business Overview
Table 51: AVIC Group of Companies Revenue Share by Business Segments (2014)
7.1.2 Financial Overview
Table 52: AVIC Group of Companies Net Revenue and Net Profit (2005-2015E)
7.1.3 Business Strategies
7.2 China Shipbuilding Industry Corporation
7.2.1 Business Overview
Table 53: China Shipbuilding Industry Corporation Revenue Share by Product Type (2014)
7.2.2 Financial Overview
Table 54: Net Revenue & Net Income, CSIC (2010-2015E)
7.2.3 Business Strategies
7.3 China National Nuclear Corporation International Ltd
7.3.1 Business Overview
Table 55: Segment Revenue of CNNC INT'L (2014)
7.3.2 Financial Overview
Table 56: Segment Profit, CNNC INT’L (2014)
Table 57: Net Profit and Revenue, CNNC INT’L (2010-2014)
7.3.3 Business Strategies
7.4 China Aerospace International Holdings Ltd
7.4.1 Business Overview
Table 58: Share of Business Segments in Revenue, CASIL (2014)
7.4.2 Financial Overview
Table 59: Net Profit and Revenue, CASIL, (2010-2015E)

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