China Defense Industry Report: 2016 Edition - New Report by Koncept Analytics
China Defense Industry Report
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The armed forces of the People’s Republic of China are known as the ‘Chinese People’s Liberation Army (popularly known as PLA) which
operates under the Central Military Commission (CMC). The CMC is responsible for providing unified commands and for leading the
armed forces of China, along with determining the operational structure and strategies to be adopted by the military. The PLA has 7
Military Regions under the General Staff Headquarters. The PLA has recently restructured its departmental structure and added a new
PLA Strategic Support Force as a new service branch in December 2015.
China’s defense industry has been relishing the most productive and lucrative years in its history, which is driven by plentiful state
funding, pent-up domestic demand, and access to and development of critical technological know-how on equipment, aircrafts,
shipbuilding, missiles etc.
The key factors which are anticipated to drive China’s Defense Industry include increasing military expenditure of China, reducing import
reliance, increasing economic growth and rising exports. Some of the noteworthy developments of this industry include increasing asset
injections, changes in pricing models and management incentives as a part of the SOE reforms, increasing modernization of the PLA.
However, the growth of respective industry is hindered by the lower profitability and lack of global competences.
This report offers a comprehensive analysis of the Chinese defense industry, along with an extensive study of its various segments
including Aviation Industry, Shipbuilding Industry and Nuclear Industry. Furthermore, market dynamics such as key trends and
development; and challenges are analyzed in depth. On the contention front, the China defense industry is dominated by several large
conglomerates including the AVIC Group, China Shipbuilding Industry Corporation, China State Shipbuilding Corporation etc. The
competitive landscape of the respective market, along with the company profiles of the leading players are also discussed in detail.
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China’s military spending has been rising rapidly when compared to its international peers, with an
increased focus on equipment advancement.
China’s Military expenditure has witnessed a YoY change
of x.xx% in 2014, while that of Russia and US are x.xx%
and x.xx% respectively.
China’s military expenditure on equipment has risen from
x.xx% in 2013 to x.xx% in 2014.
The expenditure on Equipment is estimated to grow at a
CAGR of xx.xx% over the period 2014-2020E, rising to
about US$xxx.x billion in 2020 from US$xx.x billion in 2014
as a result of the PLA modernization and advancement of
China’s Military Spending by Allocation (2013-2014)
Military Expenditure in USA, China and Russia (2011-2014)
China’s Estimated Expenditure on Equipment (2014-2020E)
2011 2012 2013 2014
China, P. R.
Russia / USSR
Equipment Others 2014 2015E 2016E 2017E 2018E 2019E 2020E
China is focusing extensively on enhancing the PLA Air Force. It has reduced its dependency on foreign
designs and foreign suppliers and is now capable of indigenously developing more advanced 4th
generation Fighter Aircrafts and New Transporters.
• Given the relative importance given to the PLAAF, the expenditure on
Air force equipment is estimated to rise at a CAGR of xx.x% over the
next five years.
• China owns a total number of xxx units of military aircrafts out of which
xxx units are Combat helicopters, xxx units are Transporters and xxx
units are Combat Aircrafts.
• The China’s Aviation Electronics Connector Industry has the largest
share in the world and is estimated to have grown at a CAGR of xx.x%
over the period 2012-2015E.
China’s Total Military Aircraft by Structure (2014)
China’s Estimated Expenditure on Air Force Equipment (2014-2020)
China’s Aviation Electronics Connector Industry Revenue (2012-2015E)
2014 2015E 2016E 2017E 2018E 2019E 2020E
2012 2013 2014 2015E
A positive turning-point for the China Shipbuilding industry caused by a rise in demand for more capable
ships for sea-based combat due to the recent restructuring of the PLA Navy.
• China’s share in the global shipbuilding industry is xx% and it
has witnessed a continuous growth with a CAGR of xx.x% during
the period 2000-2015E.
• There has been an improvement in Shipbuilding capacity of
China in 2015 with an increase of xxx million deadweight tons.
• China’s structure of Sea-Based Nuclear Missiles includes xx
units of missile type JL-1, and xx units of missiles type JL-2.
China's Shipbuilding Industry Performance by Indicators (2013-2015)
China’s Share in Global Shipbuilding Industry (2000-2015E)
China’s Sea-Based Nuclear Missiles by Structure (2015)
2000 2002 2004 2006 2008 2010 2012 2013 2014 2015E
2013 2014 2015
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