The conflict in Ukraine will have a huge impact on global arms trade. Russia would have consumed a large amount of weapons and would need to replenish them. In view of the growing NATO threat, they would have to increase their inventories. The NATO itself has got galvanised and many members are talking of increased defence budgets. Even relatively neutral countries like Sweden, Finland and Switzerland want to arm themselves more. Most of these countries will source their arms from the U.S. and from other allies. Ukraine, an important source for aircraft engines and the Antonov aircraft and some other defence equipment will dry up because the factories are getting destroyed. Russian would try make good these markets. Many West Asian and South East Asian countries are also looking to strengthen their armed forces.
China has emerged as supplier of weapon platforms to over 50 countries. Three of the world’s top 10 arms companies are Chinese. It is the world’s fifth largest weapons exporter. Its main customers are relatively poor countries in South and East Asia, Africa, and Latin America. In each case the sales are linked to lower costs, sometimes cheap loans, and political leveraging. The intention is to initially establish a foothold in the local defence market. China is launching home-designed aircraft carriers and conducting research in quantum-technology communications. Chinese Unmanned Aerial Vehicles (UAV), or drones, are being extensively used in conflicts in both Libya and Yemen. Chinese arms companies are also benefiting from military modernization programmes for the People’s Liberation Army. China has just raised its defence budget for 2022 by 7.1% to $230 billion from last year’s $209 billion.
Chinese Arms Industry
As per Stockholm International Peace Research Institute (SIPRI) report released in December 2021, the combined arms sales of the five Chinese companies included in the Top 100 amounted to an estimated $66.8 billion in 2020, 1.5 per cent more than in 2019. Chinese firms accounted for 13 per cent of total Top 100 arms sales in 2020, behind US companies and ahead of companies from the United Kingdom, which made up the third largest share. They have become some of the most advanced military technology producers in the world.
The China North Industries Group Corporation (NORINCO), for example, co-developed the BeiDou military–civil navigation satellite system and deepened its involvement in emerging technologies. Five Chinese companies, are in the top 25 global arms companies. The China North Industries Group Corporation (NORINCO; ranked 7th), Aviation Industry Corporation of China (AVIC; ranked 8th), China Electronics Technology Group Corporation (CETC; ranked 9th), and China South Industries Group Corporation (CSGC; ranked 20th). These five’s combined estimated arms sales totalled $66.5 billion. Although Chinese arms are often less advanced than those sold by other countries, but they are effective and less expensive.
China Emerges as a Significant Arms Exporter
Besides armed drones, China is exporting fighter aircrafts, missiles, small arms and even ships and submarines. SIPRI data shows that China was the world’s fifth largest arms exporter in 2016-20, and accounted for 5.2 per cent of the total global arms exports. The lion’s share of these exports, around 75 percent – went to Asia. 20 percent flowed into Africa. The overall value of its trade still pales in comparison to the United States, whose exports averaged over $9 billion annually during the last ten years. Pakistan is the destination for over 50 percent of Chinese exports. Defence exports to Bangladesh, Myanmar, and Sri Lanka are also of concern to India.