Arms sales continue to grow among the world’s top weapons manufacturers despite the shrunken global economy in 2020, with U.S. companies ranking first and Chinese second.
U.S. arms companies remain the greatest in number on the world ranking list, holding 41 of the top 100 spots. The total arms sales of U.S. companies in 2020 amounted to $285 billion, accounting for 54 percent of the total sales worldwide, an increase of 1.9 percent from the previous year. Since 2019, U.S. companies have held the top five spots on the list.
Amid increased military threats from China and Russia, the United States has been increasing its investment in developing and procuring next-generation weapons systems, prompting a wave of mergers and acquisitions in the U.S. arms industry in recent years. As the trend continues, many U.S. arms companies hope to gain a competitive edge in contract bidding through broadening their product portfolios.
In 2015, SIPRI included Chinese military enterprises in its database for the first time. That same year, the total arms sales of the world’s top 100 weapons manufacturers saw a 14 percent increase. Since then, arms sales have continued to grow. The overall sales in 2020 saw a 17 percent increase over 2015.
Chinese companies make up the second-largest arms sales volume globally, reaching $66.7 billion in 2020, an increase of 4.5 percent from 2019. The sales growth of Chinese military enterprises in 2020 was nearly twice the average growth of all other nations on the list.
China made most of its technological progress through intellectual property theft and the acquisition and merger of foreign companies with advanced technology.
The five Chinese companies that have entered the SIPRI list are China North Industries Group (Norinco), Aviation Industry Corporation of China (AVIC), China Electronics Technology Group (CETC), China Aerospace Science and Industry Corporation (CASIC), and China South Industries Group (CSGC). Most of these companies have seen an increase in arms sales since 2018, with Norinco reaching $17.93 billion in 2020, rising to seventh worldwide.
Although these Chinese companies appear relatively large scale and maintained growth overall, they contribute very little to China’s overall economy. The arms sales are primarily domestic, and exports are negligible.
For example, even though Norinco holds a major position among the CCP’s military enterprises, it does not produce cutting-edge weaponry. Instead, Norinco produces primarily standard land-based military equipment.
Likewise, AVIC’s yearly sales growth was 0.8 percent and 1.6 percent in 2019 and 2020, respectively, indicating slow growth in its high-end aviation military equipment production. The companies’ advanced military aircraft production is unlikely to have reached the production scale desired by the Chinese regime.