Post by : Saif Rahman

According to a recent report from the Stockholm International Peace Research Institute (SIPRI), leading military firms in China have seen a drop in revenues, diverging from the global increase in the arms market last year. While international defense companies benefited from rising tensions in Ukraine and Gaza, China's military enterprises have encountered significant challenges linked to an extensive corruption crackdown.

The findings revealed that corruption allegations in arms procurement have led to significant contracts being postponed or even canceled in 2024. Nan Tian, who oversees SIPRI's Military Expenditure and Arms Production Programme, mentioned that these circumstances have introduced uncertainty into China's military modernization initiatives, stalling the introduction of innovative technologies and capabilities.

State-owned giants such as AVIC, Norinco, and CASC each reported declines in their revenues, with Norinco facing the harshest downturn, plummeting 31% to $14 billion. Investigations into corruption caused personnel reassessments and governmental reviews, which hindered progress; meanwhile, AVIC's delivery of military aircraft also lagged. This performance starkly contrasts with countries like Japan, where military firms enjoyed a 40% revenue surge, Germany at 36%, and a more modest 3.8% growth in U.S. firms.

The crackdown has affected high-ranking officials within the People’s Liberation Army, including an intense focus on the Rocket Force, which saw the ousting of eight senior generals from the Communist Party in 2023, including the second-highest general, He Weidong. Western and Asian diplomats are still analyzing the consequences of these purges on China’s military strategy and operational ambitions.

Despite the downturn in revenue, China maintains a robust defense investment strategy, boasting the world’s largest naval and coast guard fleets while advancing technologies like aircraft carriers, hypersonic missiles, nuclear capabilities, and drone systems. SIPRI researcher Xiao Liang pointed out that timelines for these advanced systems, particularly relating to the Rocket Force, could be impacted, thus jeopardizing the People’s Liberation Army's preparedness goals for its centenary in 2027.

Experts predict that, looking ahead, China's defense budget and its political resolve towards modernization will likely persist. Nevertheless, projects may face delays, increased expenditures, and stricter procurement protocols, thanks to the ongoing corruption investigations.

In summary, while China's military aspirations remain formidable, the recent setbacks highlight how internal issues, notably corruption inquiries, can influence the speed of military advancement.

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