China’s Military Firms Struggle as Corruption Purge Bites

Revenues at China’s major military firms fell last year as corruption purges slowed arms contracts and procurement, according to a study released Monday by a leading conflict think tank, Greg Torode reported for Reuters.

Overall, China’s state-owned defense companies recorded a rare drop in revenues as President Xi Jinping’s sweeping anti-corruption campaign disrupted procurement. (Photo: Xinhua)

The declines in China contrast with strong global revenue growth among large arms and military services companies, fueled by wars in Ukraine and Gaza and rising geopolitical tensions, according to research from the Stockholm International Peace Research Institute (SIPRI).

Politics Today also reported that while China’s arms sales fell, other major producers posted significant growth, led by Japan at 40%, Germany at 36% and the United States at 3.8%.

Overall, China’s state-owned defense companies recorded a rare drop in revenues as President Xi Jinping’s sweeping anti-corruption campaign disrupted procurement, stalled weapons projects, and injected fresh uncertainty into the country’s military modernization drive.

The findings highlight a sharp contrast with the rest of the global arms industry, which saw record-breaking growth amid heightened geopolitical tensions and ongoing wars in Ukraine and Gaza.

SIPRI said revenues for the world’s 100 largest defense firms rose 5.9% to an unprecedented $679 billion in 2024, while China was the only major producer to show a downturn.

SIPRI researchers said revenues for China’s top defense companies fell 10%, citing a wave of corruption allegations that triggered internal audits, leadership purges, and procurement delays across multiple military branches.

“A host of corruption allegations in Chinese arms procurement led to major arms contracts being postponed or cancelled in 2024,” said Nan Tian, director of SIPRI’s Military Expenditure and Arms Production Program.

“This deepens uncertainty around the status of China’s military modernization efforts and when new capabilities will materialize.”