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Future Of The Chinese Defense Industry - Market Attractiveness, Competitive Landscape And Forecasts To 2018

The report covers five forces analysis to identify various power centers in the industry and how these are expected to develop in the future.

The report allows readers to identify possible ways to enter the market, together with detailed descriptions of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives.

The report helps the reader to understand the competitive landscape of the defense industry in the China. It provides an overview of key defense companies, both domestic and foreign, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.

Key Market IssuesThe Chinese defense industry is controlled by the government, and restrictions on private and foreign companies dampen the competition in the industry. A lack of competition diminishes the need for innovation in defense equipment and related technology advancement. Barring a few industrial enterprises, the majority of organizations fail to compete with each other, which impedes the development of China's modern indigenous defense industry as there is no incentive for companies to innovate. Furthermore, some of China's industrial-defense enterprises form business relationships based on long-standing political ties with regions and provinces. As a result, the country fails to gain access to technological innovations and advancements in foreign countries.

A major obstacle to investment in the Chinese defense industry is the arms embargo imposed by the US and other European countries, following the 1989 Tiananmen Square massacre. During the review period, some European states have proposed the lift of the arms ban, but the US and Japan have opposed this proposal due to fears that it will enable China to enhance its military capabilities. As a result, China's defense industry is unable to acquire sophisticated military hardware from the US or Western European countries, and this hampers the development of its military-industrial complex.

Key Highlights China is involved in various disputes over rights to islands in the East China Sea and South China. In 2012, the dispute between the country and Japan over rights to the Diaoyu islands in the East China Sea intensified the tensions between the two countries. Both the countries increased their military forces and patrol around these islands, fuelling the tensions. In addition, China is also involved in disputes over the rights to islands in the South China Sea with Philippines and Vietnam. Taiwan, Malaysia, and Brunei also have conflicting claims in the South China Sea, making the area a source of a potential military showdown. Such disputes and potential threats are expected to drive China's defense expenditure over the forecast period, which is estimated to grow at a CAGR of 11.9%.China's ambition to dominate the world's political, military, and cultural outlook drives its efforts to rival the best military forces in the world. As such, the country has focused on modernizing its defense capabilities through the acquisition of advanced foreign weapons, significant investments in its domestic industrial technology, and upgrading its strategic nuclear force.

As Chinese homeland security is threatened by internal conflicts such as protests of separatist groups from Tibet, Taiwan, and Xinjiang, illegal immigration, and human trafficking, the country's spending on policing and domestic surveillance of these areas surpass the nation's military budget. Furthermore, the country's authoritarian regime makes use of several homeland security technologies, such as networked surveillance cameras, biometric identification cards and facial recognition software, in order to prevent mass protests.

In order to improve its military weapons power, missiles and aircraft were the major imported products accounting for 55.5% of total defense imports. Air defense systems and engines followed them with 19.8% and 16.1% respectively of total imports. The country is focusing on improving the capabilities of nationalized companies and also inviting foreign companies to form joint ventures in non-strategic defense areas. China is hoping to use the technology obtained from these joint ventures in developing defense equipment by its nationalized and local companies. Such orientation towards procurement of defense equipment from local companies indicates towards the reduction of defense imports.

Table of Contents

1 Introduction1.1 What is this Report About?1.2 Definitions1.3 Summary Methodology1.4 SDI Terrorism Index1.5 About Strategic Defence Intelligence2 Executive Summary3 Market Attractiveness and Emerging Opportunities3.1 Defense Market Size Historical and Forecast3.1.1 Chinese defense expenditure is expected to register a double digit growth rate over the forecast period3.1.2 Territorial disputes and investments on military modernization will drive China's defense expenditure3.1.3 China's economic growth fuelled its defense expenditure3.2 Analysis of Defense Budget Allocation3.2.1 Capital expenditure allocation expected to hover around one third of total defense budget3.2.2 Per capita defense expenditure expected to increase during the forecast period3.2.3 China's military procurement is expected increase at a CAGR of XX% over the forecast period3.3 Homeland Security Market Size and Forecast3.3.1 Chinese homeland security is expected to cross US$XX billion by 20183.3.2 Internal conflicts will drive the Chinese homeland security spending3.3.3 China falls under "low risk" of terrorism category3.4 Benchmarking with Key Global Markets3.4.1 China will be third fastest growing defense spender among the largest defense spenders globally3.4.2 China to remain second among countries with largest defense budgets in the world3.4.3 China allocates lower share of GDP for defense compared to US and other European countries3.4.4 China faces minimal threat from foreign terrorist organizations3.5 Market Opportunities: Key Trends and Growth Stimulators3.5.1 Homeland Security Infrastructure3.5.2 Police modernization3.5.3 Cyber Security3.5.4 Counter terrorism3.5.5 Border Security3.5.6 Air-to-Air Missiles3.5.7 Multi mission and Rescue Helicopters3.5.8 Fighters and Multi-role Aircraft:4 Defense Procurement Market Dynamics4.1 Import Market Dynamics4.1.1 Defense imports are expected to remain low over the forecast period4.1.2 Russia account for the majority of Chinese defense imports4.1.3 Missiles, aircraft and air defense systems are most imported military hardware4.2 Export Market Dynamics4.2.1 Defense exports are expected to grow over the forecast period4.2.2 Pakistan account for major portion of Chinese low-cost defense equipment exports4.2.3 Chinese low-cost aircraft and armored vehicle exports expected to increase5 Industry Dynamics5.1 Five Forces Analysis5.1.1 Bargaining power of supplier: low to high5.1.2 Bargaining power of buyer: medium to high5.1.3 Barriers to entry: high5.1.4 Intensity of rivalry: low5.1.5 Threat of substitution: low6 Market Entry Strategy6.1 Market Regulation6.1.1 The Chinese military-industrial complex opens up to private sector participation6.1.2 Defense industry remains closed to foreign direct investment6.2 Market Entry Route6.2.1 Foreign technology finds its way into Chinese defense industry through the dual base economy6.3 Key Challenges6.3.1 Lack of innovation and competition continues to hamper the performance of the Chinese defense industry6.3.2 Arms embargo imposed by the US and European countries7 Competitive Landscape and Strategic Insights7.1 Competitive Landscape Overview7.1.1 State-owned enterprises are the only major players in China's defense industry7.1.2 Foreign technology enters the Chinese defense market by supplying civil use products7.2 Key Domestic Companies7.2.1 Aviation Industry Corporation of China: overview7.2.2 Aviation Industry Corporation of China: products and services7.2.3 Aviation Industry Corporation of China: recent announcement and strategic initiatives7.2.4 Aviation Industry Corporation of China: alliances7.2.5 China Electronics Technology Group Corporation: overview7.2.6 China Electronics Technology Group Corporation: products and services7.2.7 China Electronics Technology Group Corporation: recent announcement and strategic initiative7.2.8 China Electronics Technology Group Corporation: alliances7.2.9 China Electronics Technology Group Corporation: recent contract wins 7.2.10 China National Nuclear Corporation: overview 7.2.11 China National Nuclear Corporation: products and services 7.2.12 China National Nuclear Corporation: recent announcement and strategic initiatives 7.2.13 China National Nuclear Corporation: alliances 7.2.14 China National Nuclear Corporation: recent contract wins 7.2.15 China Xinshidai Company: overview 7.2.16 China Xinshidai Company: products and services 7.2.17 China Xinshidai Company: recent announcement and strategic initiatives 7.2.18 China Xinshidai Company: alliances 7.2.19 China Nuclear Energy and Construction: overview 7.2.20 China Nuclear Energy and Construction: products and services 7.2.21 China Nuclear Energy and Construction: recent announcement and strategic initiatives 7.2.22 China Nuclear Energy and Construction: alliances 7.2.23 China North Industries Corporation: overview 7.2.24 China North Industries Corporation: products and services 7.2.25 China North Industries Corporation: recent announcement and strategic initiatives 7.2.26 China North Industries Corporation: alliances 7.2.27 China North Industries Corporation: recent contract wins 7.2.28 China Aerospace Science and Industry Corporation: overview 7.2.29 China Aerospace Science and Industry Corporation: products and services 7.2.30 China Aerospace Science and Industry Corporation: recent announcement and strategic initiatives 7.2.31 China Aerospace Science and Technology Corporation: overview 7.2.32 China Aerospace Science and Technology Corporation: products and services 7.2.33 China Aerospace Science and Technology Corporation: recent announcement and strategic initiatives 7.2.34 China Aerospace Science and Technology Corporation: alliances 7.2.35 China State Shipbuilding Corporation: overview 7.2.36 China State Shipbuilding Corporation: products and services 7.2.37 China State Shipbuilding Corporation: recent announcement and strategic initiatives 7.2.38 China National Electronics Import and Export Corporation: overview 7.2.39 China National Electronics Import and Export Corporation: products and services 7.2.40 China National Aero-Technology Import and Export Corporation: overview 7.2.41 China National Aero-Technology Import and Export Corporation: products and services 7.2.42 China National Aero-Technology Import and Export Corporation: recent announcement and strategic initiatives8 Business Environment and Country Risk8.1 Demographics and Social Statistics8.1.1 Population - Rural8.1.2 Population - Urban8.1.3 Number of Households8.2 Economic Performance8.2.1 Gross Domestic Product per Capita8.2.2 Gross Domestic Product per Capita (Current US$ Bn)8.2.3 Exports of goods and services (current US$)8.2.4 Imports of goods and services (current US$ Bn)8.2.5 Consumer Price Index8.2.6 Local Currency Unit per US$8.2.7 Local Currency Unit per Euro8.2.8 Lending rate (%)8.2.9 Deposit rate (%) 8.2.10 Real Interest Rate (%) 8.2.11 Market Capitalization of Listed companies (US$ bn) 8.2.12 Market Capitalization of Listed companies (% of GDP) 8.2.13 Goods Exports as a % of GDP 8.2.14 Goods Imports as a % of GDP 8.2.15 Goods Trade Surplus/Deficit (as % of GDP) 8.2.16 Services Imports (as % of GDP) 8.2.17 Services Exports (as % of GDP) 8.2.18 Services Trade Surplus/Deficit (as a % of GDP) 8.2.19 Net Foreign Direct Investment 8.2.20 Net FDI as a % of GDP 8.2.21 International reserves including Gold 8.2.22 External Debt (US$ Bn) 8.2.23 External Debt as a % of GDP8.3 Energy and Utilities8.3.1 Total Conventional Thermal Electricity Generation8.3.2 Hydroelectricity Net Generation8.3.3 Nuclear Electricity Net Generation8.3.4 Total Conventional Thermal Electricity Installed Capacity8.3.5 Total Electricity Exports8.3.6 Total Electricity Imports8.3.7 Proved Reserves of Natural Gas8.3.8 Total Petroleum Consumption8.3.9 Crude Oil Proved Reserves 8.3.10 Total Non-Hydro Renewable Electricity Net Generation8.4 Infrastructure Quality and Availability8.4.1 Rail lines (total route-km)8.4.2 Air transport, Freight8.4.3 Overall Construction8.5 Minerals8.5.1 Mining, Manufacturing, Utilities Output8.6 Technology8.6.1 Transparency Index8.7 Telecommunications8.7.1 Telephone Lines8.7.2 Telephone Lines Penetration9 Appendix9.1 About SDI9.2 Disclaimer

List of Tables

Table 1: Chinese Defense Expenditure (US$ Billion), 2009-2013 Table 2: Chinese Defense Expenditure (US$ Billion), 2014-2018 Table 3: Chinese GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2009-2013 Table 4: Chinese GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2014-2018 Table 5: Chinese Defense Budget Split Between Capital and Revenue Expenditure (%), 2009-2013 Table 6: Chinese Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2018 Table 7: Chinese per capita defense expenditure (US$), 2009-2013 Table 8: Chinese per capita defense expenditure (US$), 2014-2018 Table 9: Chinese Defense Capital Expenditure (US$ Billion), 2009-2013 Table 10: Chinese Defense Capital Expenditure (US$ Billion), 2014-2018 Table 11: Chinese Homeland Security Budget, 2009-2013 Table 12: Chinese Homeland Security Budget, 2014-2018 Table 13: Benchmarking with Key Markets - 2008-2012 vs. 2013-2017 Table 14: SDI Terrorism Index Table 15: Chinese Military-Industrial Complex - Competitive Landscape Table 16: Aviation Industry Corporation of China - Product focus Table 17: Aviation Industry Corporation of China - Alliances Table 18: China Electronics Technology Group Corporation - Product focus Table 19: China Electronics Technology Group Corporation - Alliances Table 20: China Electronics Technology Group Corporation - Recent Contract Wins Table 21: China National Nuclear Corporation - Product focus Table 22: China National Nuclear Corporation - Alliances Table 23: China National Nuclear Corporation - Recent Contract Wins Table 24: China Xinshidai Company - Product focus Table 25: China Xinshidai Company - Alliances Table 26: China Nuclear Energy and Construction - Product focus Table 27: China Nuclear Energy and Construction - Alliances Table 28: China North Industries Corporation - Product focus Table 29: China North Industries Corporation - Alliances Table 30: China North Industries Corporation - Recent Contract Wins Table 31: China Aerospace Science and Industry Corporation - Product focus Table 32: China Aerospace Science and Technology Corporation - Product focus Table 33: China Aerospace Science and Technology Corporation - Alliances Table 34: China State Shipbuilding Corporation - Product focus Table 35: China National Electronics Import and Export Corporation - Product focus Table 36: China National Aero-Technology Import and Export Corporation - Product focus

List of Figures

Figure 1: Chinese Defense Expenditure (US$ Billion), 2008-2012 Figure 2: Chinese Defense Expenditure (US$ Billion), 2013-2017 Figure 3: Chinese GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2009-2013 Figure 4: Chinese GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2014-2018 Figure 5: Chinese Defense Budget Split Between Capital and Revenue Expenditure (%), 2009-2013 Figure 6: Chinese Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2018 Figure 7: Chinese per capita defense expenditure (US$), 2008-2012 Figure 8: Chinese per capita defense expenditure (US$), 2014-2018 Figure 9: Chinese Defense Capital Expenditure (US$ Billion), 2009-2013 Figure 10: Chinese Defense Capital Expenditure (US$ Billion), 2014-2018 Figure 11: Chinese Homeland Security Budget, 2009-2013 Figure 12: Chinese Homeland Security Budget, 2014-2018 Figure 13: SDI Terrorism Heat Map, 2011 Figure 14: SDI Terrorism Index, 2011 Figure 15: Benchmarking with Key Markets - 2007-2011 vs. 2012-2016 Figure 16: Defense Expenditure of the World's Largest Military Spenders (US$ Billion), Figure 17: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2011 Figure 18: Homeland Security Infrastructure Market Size in China (US$ Billion), 2013-2023 Figure 19: Police Modernization Market Size in China (US$ Billion), 2013-2023 Figure 20: Cyber Security Market Size in China (US$ Billion), 2013-2023 Figure 21: Counter Terrorism Market Size in China (US$ Billion), 2013-2023 Figure 22: Border Security Market Size in China (US$ Billion), 2013-2023 Figure 23: Air-to-Air Missiles Market Size in China (US$ Billion), 2013-2023 Figure 24: Multi mission and Rescue Helicopters Market Size in China (US$ Billion), 2013-2023 Figure 25: Fighters and Multi-role Aircraft Market Size in China (US$ Billion), 2013-2023 Figure 26: Chinese Defense Import Trend, 2007-2011 (TIV values) Figure 27: Chinese Defense Imports by Country (%), 2007-2011 Figure 28: Chinese Defense Imports by Category (%), 2007-2011 Figure 29: Chinese Defense Exports Trend, 2007-2011 (TIV values) Figure 30: Chinese Defense Imports by Country (%), 2007-2011 Figure 31: Chinese Defense exports by Category (%),2007-2011 Figure 32: Industry Dynamics Porter's Five Forces Analysis Figure 33: Chinese Population - Rural (In Millions), 2008-2017 Figure 34: Chinese Population - Urban (In Millions), 2008-2017 Figure 35: Chinese Number of Households 2008-2017 Figure 36: Chinese GDP per Capita, 2008-2017 Figure 37: Chinese GDP Current US$ (US$ Billion), 2008-2017 Figure 38: Chinese Exports of goods and services (current US$ Bn), 2002-2011 Figure 39: Chinese Imports of goods and services (US$ Billion), 2002-2011 Figure 40: Chinese Consumer Price Index, 2008-2017 Figure 41: Chinese LCU per US$, 2008-2017 Figure 42: Chinese LCU per Euro, 2008-2017 Figure 43: Chinese Lending rate (%), 2002-2011 Figure 44: Chinese Deposit Rate, 2001-2010 Figure 45: Chinese Real Interest Rate (%), 2002-2011 Figure 46: Chinese Market Capitalization of listed companies (US$ Billion), 2002-2011 Figure 47: Chinese Market Capitalization of listed companies as a % of GDP, 2002-2011 Figure 48: Chinese Goods Exports as a % of GDP, 2002-2011 Figure 49: Chinese Goods Imports as a % of GDP, 2002-2011 Figure 50: Chinese Goods Trade, 2002-2011 Figure 51: Chinese Services Imports (as a % of GDP), 2002-2011 Figure 52: Chinese Services Exports (as a % of GDP), 2002-2011 Figure 53: Chinese Services Trade surplus/deficit as a % of GDP, 2002-2011 Figure 54: Chinese FDI (current US$ bn), 2002-2011 Figure 55: Chinese Net FDI as a % of GDP, 2002-2011 Figure 56: Chinese international reserves, including gold (US$ Bn), 2002-2011 Figure 57: Chinese external debt (US$ Bn), 2001-2010 Figure 58: Chinese external debt as a % of GDP, 2001-2010 Figure 59: Chinese Conventional Thermal Electricity Generation (Bn KWH), 2001-2010 Figure 60: Chinese Hydroelectricity Net Generation (Bn KWH), 2001-2010 Figure 61: Chinese Nuclear Electricity net generation (Bn Kwh), 2001-2010 Figure 62: Chinese Total Conventional Thermal Electricity Installed Capacity (Bn Kwh), 2001-2010 Figure 63: Chinese Total Electricity Exports (Bn Kwh), 2001-2010 Figure 64: Chinese Total Electricity Imports (Bn Kwh), 2001-2010 Figure 65: Chinese proved reserves of Natural Gas (Trillion Cubic Ft), 2002-2011 Figure 66: Chinese Petroleum Consumption (Thousand Barrels Per Day), 2002-2011 Figure 67: Chinese Crude Oil Proved Reserves (Bn Barrels), 2002-2011 Figure 68: Chinese Non-Hydro Renewable Electricity Net Generation (Bn Kwh), 2001-2010 Figure 69: Chinese Rail lines (total route-km), 2001-2010 Figure 70: Chinese Air transport, freight (million ton-km), 2001-2010 Figure 71: Chinese Overall Construction (US$ Bn), 2007-2016 Figure 72: Chinese Mining, Manufacturing, Utilities Output (US$ Bn), 2001-2010 Figure 73: Chinese Patents granted, 2002-2011 Figure 74: Chinese Telephone Lines (in Mn), 2001-2010 Figure 75: Chinese Telephone lines penetration rate (per 100 people), 2002-2011

Companies Mentioned

Aviation Industry Corporation of China (AVIC), China Electronics Technology Group Corporation, China National Nuclear Corporation (CNNC), China Xinshidai Company, China Nuclear Energy and Construction, China North Industries Corporation (NORINCO), Aerospace Science and Industry Corporation (CASIC) ,China State Shipbuilding Corporation (CSSC) ,China National Electronics Import and Export Corporation (CEIEC) ,

To order this report: Future of the Chinese Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018

__________________________Contact Clare: clare@reportlinker.com US:(339) 368 6001 Intl:+1 339 368 6001

SOURCE Reportlinker

Copyright 2011 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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