Chinese arms exports have surged due to the ongoing conflicts in the Middle East.
According to Chinese media outlet Caixin, the combined revenue of over 80 publicly listed defense companies in China reached 377.4 billion yuan in the first half of this year, an 18.9% increase compared to the same period last year. Their total net profit rose by 32.9% to 24.7 billion yuan. Notably, the total advance payments received by these companies amounted to 222.8 billion yuan, marking a 43.8% increase from the previous year. This rise in advance payments indicates a significant increase in orders for Chinese defense firms.
China's CITIC Securities noted, "The growth in performance of Chinese defense companies in the first half of this year was driven by overseas exports." While specific figures for China's arms sales are not publicly disclosed, CITIC Securities mentioned that there has been a substantial increase in overseas exports.
Among listed companies, AVIC Chengdu Aircraft Industry Group reported a revenue of 1.6 billion yuan in the first half of the year, a staggering 272.4% increase, with net profit rising by 72.8%. The revenue growth rate for the second quarter was 422.2%. AVIC Chengdu is a leading exporter of military drones, with its Wing Loong drone being a key product already sold to several countries. Another drone manufacturer, Aerospace Science and Technology Corporation, reported that overseas sales accounted for 42.1% of its total revenue in the first half of the year. In its semi-annual report, the company stated, "Demand for Chinese drones has increased significantly since the India-Pakistan conflict in May of last year."
Additionally, reports indicate that the UAE deployed the Chinese-made FK-2000 air defense system in Bahrain last July. The FK-2000 is a short-range surface-to-air missile system developed by China Aerospace Science and Industry Corporation (CASIC) for export, designed to intercept drones and missiles approaching at low to medium altitudes near key facilities.
The ongoing Middle East conflicts present opportunities for Chinese defense companies. If the U.S. strikes Iran, Iran may retaliate against U.S. military bases located in Saudi Arabia, Qatar, Kuwait, and the UAE. While China is not supplying weapons to Iran, neighboring countries are purchasing Chinese arms for their defense.
A report released in April by the Israel National Security Institute (INSS) indicated that Saudi Arabia is the largest buyer of Chinese weapons in the Middle East. The report highlighted that China is actively targeting the military drone sector, an area where the U.S. has been less aggressive in its exports.
* This article has been translated by AI.
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