China’s military firms struggle as corruption purge bites, report says
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Revenues at China’s major state-owned military companies fell sharply last year as sweeping corruption investigations stalled procurement and delayed major weapons contracts, according to new research by the Stockholm International Peace Research Institute (SIPRI). The decline stands in stark contrast to strong revenue growth among large arms producers in the United States, Europe and Japan, driven by conflicts in Ukraine and Gaza and heightened global tensions.
SIPRI found that corruption allegations across China’s defence establishment led to contract postponements or cancellations throughout 2024, deepening uncertainty over Beijing’s military modernisation. The crackdown has reached senior levels: eight top generals, including former vice-chair of the Central Military Commission He Weidong, were expelled from the Communist Party on graft charges in October. Diplomats say the full impact on China’s command structure and weapons programmes remains unclear.
Revenues of China’s top military firms fell 10 percent in 2023–24, compared with surges of 40 percent in Japan, 36 percent in Germany and nearly 4 percent in the U.S. China’s decline made Asia-Oceania the only region to record an overall drop among top arms companies.
The slowdown affected major firms including AVIC, Norinco and CASC, with Norinco’s revenue plunging 31 percent. SIPRI warns that corruption-related disruptions could delay advanced missile, aerospace and cyber capabilities central to China’s strategic ambitions. However, the institute says long-term investment and political backing for military modernisation are expected to continue, though with higher costs and tighter procurement controls.
