China's burgeoning arms industry has now surpassed Russia and now sits second behind the United States. Credit:

China has not only surpassed Russia to become the world’s No. 2 arms dealer, trailing only the United States, but the four listed arms makers exceeded sales of the top ten Russian companies in 2017, according to new research from the Stockholm International Peace Research Institute (SIPRI).

The US$54.1 billion worth of weapons sold by Chinese arms makers exceeds the US$37.7 billion worth of weapons sold by 10 Russian companies that year, the report said.

In the pasta lack of transparency has meant that the value of Chinese companies’ arms sales has been either unknown or difficult to reliably estimate.

For this reason, the SIPRI Top 100 — an annual ranking of the world’s 100 largest arms-producing and military services companies — has so far not been able to include Chinese arms companies, the report said.

The research looks at four companies for which credible financial information is available. The companies cover three sectors of conventional arms production: aerospace, electronics and land systems, the report said.

With the increase of available data on these companies, it is now possible to develop reasonably reliable estimates of the scale of the Chinese arms industry, the report said.

Based on estimated arms sales in 201517, the four major Chinese arms companies chosen for the study can now finally be compared with the major arms companies from the rest of the world, the report said.

In 2017, of the 20 largest companies in the SIPRI Top 100, 11 were based in the USA, 6 in Western Europe and 3 in Russia.

If the four Chinese arms companies investigated in the study were included in the Top 100, they would all rank among the top 20, with combined estimated arms sales totalling US$54.1 billion, the report said. Three of the companies would be ranked in the top 10.

The largest of the Chinese companies is Aviation Industry Corporation of China (AVIC), which with arms sales totalling US$20.1 billion, would rank sixth largest in the world.

China North Industries Group Corporation (NORINCO), which would place eighth in the Top 100 with sales of US$17.2 billion, is in fact the world’s largest producer of land systems, the report said.

However, these new estimates are most likely still an underestimate. A lack of transparency in the arms sales figures of Chinese arms companies continues to hinder a complete understanding of China’s arms industry.

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