China - Defense and Security: An advancing global power (Strategy, Performance and Risk Analysis)
The aircraft category remains one of the key growth drivers of the Chinese defense and security industry, accounting for 41.5% of capital expenditure in 2016; followed by the C4ISR electronics and IT category with 16.05%. China’s total defense and security expenditure recorded a CAGR of 9.2%, rising from US$102.8 billion in 2012 to US$146.3 billion in 2016, and will post a forecast-period CAGR of 11.7% to reach US$247.5 billion in 2021 due to the modernization of the country’s technological capabilities.
MarketLine’s premium reports provide a comprehensive overview of each market within a country’s defense industry; benchmark key performance indicators against regional and global peers; review industry trends and drivers; evaluate the competitive landscape and innovation potential of singular markets; and conduct data-driven SWOT analysis to ascertain a structured assessment of the performance of each territory represented.Key Highlights
China emerged as the largest exporter in Asia-Pacific:
The export of armored vehicles, aircraft and ships make China the largest defense exporter in the Asia-Pacific region. China’s defense exports recorded a CAGR of 7.3%, rising from US$1.6 billion in 2012 to US$2.1 billion in 2016. Aircraft exports primarily comprise J-7s, K-8s, and Y-12s. China exports defense equipment to Bangladesh, Venezuela, Pakistan, Tanzania, and Myanmar.
China reported an increase in its defense expenditure:
In terms of defense, China is the second-largest spender globally after the US. Expenditure increased at a CAGR of 9.2%, from US$102.8 billion in 2012 to US$146.3 billion in 2016, and will post a forecast-period CAGR of 11.7% to reach US$247.5 billion in 2021. Growth can be attributed to modernization plans, peacekeeping missions, and tensions with the US that escalated due to the presence of US Naval Forces in the South China Sea territory in October 2016.
China aims to focus on indigenous manufacturing:
With domestic manufacturing strength, China will continue to reduce its defense imports. The country is domestically manufacturers J-15s, J-20s, Shenyang J-31s, Y-30s, transport aircraft, and Type 055 destroyers. The country is also accelerating the domestic production of third-generation ZTZ99/Type 99 and MBT-3000 battle tanks. An increase in manufacturing capabilities, coupled with low production costs, will help China to export cheaper alternatives to countries looking to lower their defense outgoings.
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