The Chinese Defense Industry: Market Opportunities and Entry Strategies, Analyses and Forecasts

This report is the result of SDI/ICD Research’s extensive market and company research covering the Chinese defense industry. It provides detailed analysis of both historic and forecast defense industry values including key growth stimulators, analysis of the leading companies in the industry, and key news

The Chinese Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017 offers the reader insights into the market opportunities and entry strategies adopted by foreign original equipment manufacturers (OEMs) in order to gain market share in the Chinese defense industry.

What is the current market landscape and what is changing?
The Chinese defense market registered significant growth during the review period and is expected to retain this positive growth rate during the forecast period. The Chinese defense budget, which valued US$104.62 billion in 2012, is the largest defense budget in the Asia-Pacific region. Defense expenditure grew at a CAGR of 11.5% during the review period. Due to the rapid growth of the country’s defense budget, the Chinese army is now capable of rivaling the leading military powers of Western European countries.

What are the key drivers behind recent market changes?
China is expected to spend US$722.4 billion in the fulfillment of its defense requirements. Factors such as Sino-US relations, asymmetric warfare and the threat from Taiwan to its territorial integrity are expected to stimulate defense expenditure during the forecast period. China’s emphasis on the import of technology rather than in the import of finished equipment will continue to lead the development of domestic defense firms.

What makes this report unique and essential to read?
The Chinese Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017 provides detailed analysis of the current industry size and growth expectations from 2013 to 2017, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides detailed understanding of emerging opportunities in specific areas of defense market.

Key Features and Benefits
The report provides detailed analysis of the current industry size and growth expectations from 2013 to 2017, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides detailed understanding of emerging opportunities in specific areas.

The report includes trend analysis of imports and exports, together with its implications and impact on the Chinese defense industry.

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 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 Issues
Despite structural reforms, the Chinese defense industry remains under state control and contains very little competition. 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.

Following the 1989 Tiananmen Square massacre, an arms embargo was imposed by the US and other European countries. During the review period, some European states have proposed lifting 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.

Key Highlights
Chinese defense expenditure, estimated at US$104.62 billion during 2012, grew at a CAGR of 11.5% during the review period. During the forecast period, it is expected to record a CAGR of 8.49% and reach US$174.9 billion by 2017. Over the next five years the country’s defense expenditure is expected to be driven by factors such as Sino-US relations, asymmetric warfare and the threat from Taiwan to its territorial integrity.

During the review period, aircraft and armored vehicles were the main categories in defense exports by China. In 2011, China exports defense products to 36 countries with a total value of US$1.35 billion. With the rapid grow of domestic defense companies, defense exports are expected to remain high during the forecast period.


Companies Mentioned

Aviation Industry Corporation of China China Electronics Technology Group CorporationChina National Nuclear CorporationChina Xinshidai CompanyChina Nuclear Energy and ConstructionChina North Industries CorporationChina Aerospace Science and Industry CorporationChina Aerospace Science and Technology CorporationChina State Shipbuilding CorporationChina National Electronics Import and Export CorporationChina National Aero-Technology Import and Export Corporation

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