BOFIT Weekly Review 2015/14
China is now the world’s third largest arms exporter
The Stockholm International Peace Research Institute (SIPRI) reports that the volume of international arms exports rose 16 % in the five-year period 2010–2014 from the previous five-year period 2005–2009. The United States accounted for nearly a third of global arms exports, while fast-rising Russia accounted for over a quarter. Chinese arms exports rose over 140 %, narrowly beating out Germany and France, to become the world’s third largest arms supplier. The three countries each accounted for about 5 % of global arms exports during 2010–2014, and they all lag well behind the US and Russia.
Over the last five years, 41 % of China’s arms exports went to Pakistan, 16 % to Bangladesh and 12 % to Myanmar. Russia’s three largest customers were India (39 %), China (11 %) and Algeria (8 %). US arms exports are far more diversified than those of Russia or China. The biggest US customers were South Korea, the Arab Emirates and Australia, but each has shares below 10 %. The US, Russia and China were all heavily focused on selling to customers in Asia.
The rapid growth and development of China’s own weapons production has reduced the country’s dependence on imports. The volume of arms imported to China during 2010–2014 declined 42 % from the previous five-year period, when China was the world’s largest arms buyer. Despite the reduction in imports, China remains the world’s third largest arms buyer and accounts for 5 % of global purchases. India rose to become by far the world’s biggest arms buyer with a 15 % share, followed in second place by Saudi Arabia with a 5 % share (about the same as China). In this decade, Asia’s share of arms imports has risen to 48 % of all global imports, up from 40 % in the last half of the 2000s.
The development of China’s own arms production capabilities is clearly evidenced in the bilateral arms trade between China and Russia. During 2010–2014, the volume of China’s arms imports from Russia fell 57 % from 2005–2009. Although Russia, with a 62 % market share, is overwhelmingly China’s biggest arms supplier, Russia’s has lost about 20 percentage points of its market share over the past five years. Moreover, with Russia’s global arms exports growing and exports to China falling, Russia’s dependence on Chinese arms purchases has fallen significantly. China accounted for about 35 % of Russian arms exports in 2005–2009. In the 2010–2014 period, China’s share in Russian arms exports fell to 11 %.
After Russia, France and Ukraine are China’s largest arms suppliers. SIPRI reports that helicopters, engines for aircrafts and ships represent a major part of China’s arms imports and manufacturing of weapons systems under licence.