China’s Military Companies Face Slowdown as Corruption Crackdown Delays Major Arms Projects

Post by : Saif

China’s powerful military industry is facing a rare slowdown. A new study shows that the country’s biggest arms companies saw their revenues fall last year, mainly because corruption investigations delayed or cancelled major weapons contracts. This decline comes at a time when global arms sales are rising sharply due to wars in Ukraine and Gaza, as well as growing international tensions.

The report, released by the Stockholm International Peace Research Institute (SIPRI), highlights how corruption has become a serious obstacle inside China’s defence system. Many key projects have been paused as officials investigate bribery, misuse of funds, and illegal deals inside the People’s Liberation Army (PLA) and military suppliers.

SIPRI researcher Nan Tian said China’s arms industry suffered “major delays” in 2024 because corruption cases led to stalled procurement and postponed orders. This has created uncertainty about China’s huge military modernisation plan and the timeline for its advanced weapons.

China has poured money into defence for more than 30 years, aiming to compete with the United States in Asia. But last year, the revenues of China’s top military firms fell by 10%. In contrast, Japan’s military companies saw their revenues jump by 40%, Germany’s by 36%, and America’s by nearly 4%.

Globally, the world’s 100 largest arms makers made a record $679 billion in 2024. China’s decline made Asia-Oceania the only region with lower revenues.

The drop in China’s defence industry comes as President Xi Jinping continues his anti-corruption drive, which started in 2012. The campaign reached the top levels of the military in 2023 when the PLA Rocket Force became a target. This branch controls China’s most advanced missile systems, including hypersonic and long-range ballistic missiles.

In October, eight top generals were expelled from the Communist Party for corruption. One of them was He Weidong, China’s second-highest-ranking general, who once served directly under Xi in the Central Military Commission. Diplomats in Asia and the West say they still do not know how deeply the purge has affected China’s military readiness.

China’s state-owned companies — including aircraft maker AVIC, missile and aerospace producer CASC, and land-systems giant Norinco — all saw revenue declines. Norinco dropped the most, falling 31% to $14 billion. Investigations into senior officials from Norinco and CASC led to government reviews and delays across several defence projects.

Deliveries of AVIC’s military aircraft also slowed, causing uncertainty about China’s air force upgrades.

Even though revenues fell, China’s military strength continues to grow. The PLA now operates the world’s largest navy and coast guard fleets, is developing a new advanced aircraft carrier, and is expanding its stockpile of hypersonic missiles, nuclear weapons, and advanced drones.

However, SIPRI researcher Xiao Liang noted that corruption disruptions could affect the timeline for several key systems, especially those linked to the Rocket Force. If delays continue, China’s goal of reaching full modernisation by 2027 — the 100th anniversary of the PLA’s founding — may become harder to achieve.

Still, experts believe China will keep investing heavily in defence in the long run. The political leadership remains committed to modernisation, and defence budgets are expected to grow. But the future may bring higher costs, more scrutiny on procurement, and stricter oversight of weapons development.

China’s defence ministry and the companies involved have not commented on the report.

The corruption purge may slow China’s progress, but it is unlikely to stop it. Instead, the country’s military rise may simply take a little longer — and face more challenges — than originally planned.

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