Future of the Chinese Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2019

Date: July 9, 2014
Pages: 133
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Publisher: Strategic Defence Intelligence (SDI)
Report type: Strategic Report
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Future of the Chinese Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2019

SUMMARY

The Future of the Chinese Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2019 published by Strategic Defence Intelligence, provides readers with a detailed analysis of both historic and forecast Chinese defense industry values, factors influencing demand, the challenges faced by industry participants, analysis of industry leading companies and key news.

KEY FINDINGS
  • The Chinese defense expenditure recorded a CAGR of 14.77% between 2010 and 2014, and valued US$131.7 billion in 2014.
  • The country’s total defense expenditure during the forecast period is expected to be US$914.4billion.
  • The average share of capital expenditure is expected to be 32.8% over the forecast period against an average share of 33.0% during 2010-2014.
  • Over the forecast period, the country’s budget for homeland security is expected to be US$915.2 billion cumulatively.
  • The key areas of investment are expected to be fighter and multi-role aircraft, submarines, helicopter, naval vessels, and missile defense systems
SYNOPSIS

This report offers detailed analysis of the Chinese defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends and challenges faced by industry participants.

In particular, it provides an in-depth analysis of the following:
  • Chinese defense industry market size and drivers: detailed analysis of the Chinese defense industry during 2015–2019, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the spending patterns and modernization patterns of the country
  • Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to the army, navy and air force. It also details the key challenges faced by the defense market participants within the country
  • Porter’s Five Force analysis of the Chinese defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyer, threat of substitutions, intensity of rivalry and barrier to entry
  • Import and Export Dynamics: analysis of prevalent trends in the country’s import and export over the last five years
  • Market opportunities: details of the top five defense investment opportunities over the coming 10 years
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the Chinese defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives and a brief financial analysis
REASONS TO BUY
  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Chinese defense industry market trends for the coming five years.
  • The market opportunity section will inform the user about the various military requirements which are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders and the expected investment pattern by the country during the forecast period.
  • Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector.
  • A deep qualitative analysis of the Chinese defense industry covering sections including demand drivers, Porter’s Five Force Analysis, Key Trends and Growth Stimulators, latest industry contracts etc.
1 INTRODUCTION

1.1 What is this Report About?
1.2 Definitions
1.3 Summary Methodology
1.4 SDI Terrorism Index
1.5 About Strategic Defence Intelligence

2 EXECUTIVE SUMMARY

3 MARKET ATTRACTIVENESS AND EMERGING OPPORTUNITIES

3.1 Defense Market Size Historical and Forecast
  3.1.1 Chinese defense expenditure is expected to be US$914.4 billion cumulatively over the forecast period
  3.1.2 Race over military supremacy, territorial disputes and peacekeeping missions are the prime drivers of Chinese defense expenditure
  3.1.3 Chinese defense expenditure to average 1.4% of GDP over the forecast period
3.2 Analysis of Defense Budget Allocation
  3.2.1 Capital expenditure allocation expected to be 33.0% of total defense budget over the forecast period
  3.2.2 Defense capital expenditure is expected to increase at a CAGR of 11.49% over the forecast period
  3.2.3 Per capita defense expenditure expected to increase during the forecast period
3.3 Homeland Security Market Size and Forecast
  3.3.1 Chinese homeland security is expected to reach US$224.6 billion by 2019
  3.3.2 Organized crime, terrorism threats and cyber protection are expected to drive the Chinese homeland security spending
  3.3.3 China falls under “low risk” of terrorism category
3.4 Benchmarking with Key Global Markets
  3.4.1 China to be the largest defense spender in Asia
  3.4.2 China has the second largest defense budget in the world
  3.4.3 China allocates lower share of GDP for defense compared to US and other Asian countries
  3.4.4 China faces minimal threat from foreign terrorist organizations
3.5 Market Opportunities: Key Trends and Growth Stimulators
  3.5.1 Fighter and Multi-role Aircraft
  3.5.2 Maritime Surveillance and Detection
  3.5.3 Infrastructure development
  3.5.4 C4ISR - Airborne
  3.5.5 Main Battle Tanks (MBTs)
  3.5.6 Destroyers

4 DEFENSE PROCUREMENT MARKET DYNAMICS

4.1 Import Market Dynamics
  4.1.1 China is expected to import less weapons over the forecast period
  4.1.2 Russia account for the majority of Chinese defense imports
  4.1.3 Aircraft, engines and missiles are most imported military hardware
4.2 Export Market Dynamics
  4.2.1 Defense exports are expected to grow over the forecast period
  4.2.2 Pakistan emerged as the biggest importer of Chinese low-cost defense equipment exports
  4.2.3 Chinese aircraft and armored vehicle exports expected to increase

5 INDUSTRY DYNAMICS

5.1 Five Forces Analysis
  5.1.1 Bargaining power of supplier: high
  5.1.2 Bargaining power of buyer: medium
  5.1.3 Barriers to entry: high
  5.1.4 Intensity of rivalry: low
  5.1.5 Threat of substitution: low

6 MARKET ENTRY STRATEGY

6.1 Market Regulation
  6.1.1 The Chinese military-industrial complex opens up to private sector participation
  6.1.2 Defense industry remains closed to foreign direct investment
6.2 Market Entry Route
  6.2.1 Foreign technology finds its way into the Chinese defense industry through civil-military integration
6.3 Key Challenges
  6.3.1 Lack of competition and long production cycle continue to hamper the performance of the Chinese defense industry
  6.3.2 Arms embargo imposed by the US and European Union

7 COMPETITIVE LANDSCAPE AND STRATEGIC INSIGHTS

7.1 Competitive Landscape Overview
  7.1.1 State-owned enterprises are the only major players in China's defense industry
  7.1.2 Foreign technology enters the Chinese defense market by supplying civil use products
7.2 Key Domestic Companies
  7.2.1 China North Industries Corporation: overview
  7.2.2 China North Industries Corporation: products and services
  7.2.3 China North Industries Corporation: recent announcement and strategic initiatives
  7.2.4 China North Industries Corporation: alliances
  7.2.5 China North Industries Corporation: recent contract wins
  7.2.6 China Electronics Technology Group Corporation: overview
  7.2.7 China Electronics Technology Group Corporation: products and services
  7.2.8 China Electronics Technology Group Corporation: recent announcements and strategic initiative
  7.2.9 China Electronics Technology Group Corporation: alliances
  7.2.10 China Electronics Technology Group Corporation: recent contract wins
  7.2.11 Aviation Industry Corporation of China: overview
  7.2.12 Aviation Industry Corporation of China: products and services
  7.2.13 Aviation Industry Corporation of China: recent announcements and strategic initiatives
  7.2.14 China National Nuclear Corporation: overview
  7.2.15 China National Nuclear Corporation: products and services
  7.2.16 China National Nuclear Corporation: recent announcements and strategic initiatives
  7.2.17 China National Nuclear Corporation: alliances
  7.2.18 China National Nuclear Corporation: recent contract wins
  7.2.19 China Xinshidai Company: overview
  7.2.20 China Xinshidai Company: products and services
  7.2.21 China Xinshidai Company: recent announcements and strategic initiatives
  7.2.22 China Xinshidai Company: alliances
  7.2.23 China Nuclear Energy and Construction: overview
  7.2.24 China Nuclear Energy and Construction: products and services
  7.2.25 China Nuclear Energy and Construction: recent announcements and strategic initiatives
  7.2.26 China Nuclear Energy and Construction: alliances
  7.2.27 China Aerospace Science and Industry Corporation: overview
  7.2.28 China Aerospace Science and Industry Corporation: products and services
  7.2.29 China Aerospace Science and Industry Corporation: recent announcements and strategic initiatives
  7.2.30 China Aerospace Science and Industry Corporation: alliances
  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 announcements 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 announcements 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 initiatives
  7.2.43 China National Aero-Technology Import and Export Corporation: recent contract wins

8 BUSINESS ENVIRONMENT AND COUNTRY RISK

8.1 Demographics and Social Statistics
  8.1.1 Population - Rural
  8.1.2 Population - Urban
  8.1.3 Number of Households
8.2 Economic Performance
  8.2.1 Gross Domestic Product per Capita
  8.2.2 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 Index
  8.2.6 Local Currency Unit per US$
  8.2.7 Local Currency Unit per Euro
  8.2.8 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 (percentage of GDP)
  8.2.13 Goods Exports as a percentage of GDP
  8.2.14 Goods Imports as a percentage of GDP
  8.2.15 Goods Trade Surplus/Deficit (as percentage of GDP)
  8.2.16 Services Imports (as percentage of GDP)
  8.2.17 Services Exports (as percentage of GDP)
  8.2.18 Services Trade Surplus/Deficit (as a percentage of GDP)
  8.2.19 Net Foreign Direct Investment
  8.2.20 Net FDI as a percentage of GDP
  8.2.21 International reserves including Gold
  8.2.22 External Debt (US$ Bn)
  8.2.23 External Debt as a percentage of GDP
8.3 Energy and Utilities
  8.3.1 Total Conventional Thermal Electricity Generation
  8.3.2 Hydroelectricity Net Generation
  8.3.3 Nuclear Electricity Net Generation
  8.3.4 Total Conventional Thermal Electricity Installed Capacity
  8.3.5 Total Electricity Exports
  8.3.6 Total Electricity Imports
  8.3.7 Proved Reserves of Natural Gas
  8.3.8 Total Petroleum Consumption
  8.3.9 Crude Oil Proved Reserves
  8.3.10 Total Non-Hydro Renewable Electricity Net Generation
8.4 Infrastructure Quality and Availability
  8.4.1 Rail lines (total route-km)
  8.4.2 Air transport, Freight
  8.4.3 Overall Construction
8.5 Minerals
  8.5.1 Mining, Manufacturing, Utilities Output
8.6 Technology
  8.6.1 Patents Granted
8.7 Telecommunications
  8.7.1 Telephone Lines
  8.7.2 Telephone Lines Penetration

9 APPENDIX

9.1 About SDI
9.2 Disclaimer

LIST OF TABLES

Table 1: Chinese Defense Expenditure (US$ Billion), 2010-2014
Table 2: Chinese Defense Expenditure (US$ Billion),2015-2019
Table 3: Chinese Defense Expenditure (in CNY Billion), 2010-2014
Table 4: Chinese Defense Expenditure (in CNY Billion), 2015-2019
Table 5: Chinese GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2010-2014
Table 6: Chinese GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2015-2019
Table 7: Chinese Defense Budget Split Between Capital and Revenue Expenditure (%),2010-2014
Table 8: Chinese Defense Budget Split Between Capital and Revenue Expenditure (%),2015-2019
Table 9: Chinese Defense Capital Expenditure (US$ Billion), 2010-2014
Table 10: Chinese Defense Capital Expenditure (US$ Billion), 2015-2019
Table 11: Chinese Capital Expenditure (in CNY Billion), 2010-2014
Table 12: Chinese Capital Expenditure (in CNY Billion), 2015-2019
Table 13: Chinese per capita defense expenditure (US$), 2010-2014
Table 14: Chinese per capita defense expenditure (US$), 2015-2019
Table 15: Chinese Homeland Security Budget, 2010-2014
Table 16: Chinese Homeland Security Budget, 2015-2019
Table 17: Chinese Homeland Security Budget (CNY Billion), 2010-2014
Table 18: Chinese Homeland Security Budget (CNY Billion), 2015-2019
Table 19: Benchmarking with Key Markets - 2010-2014vs. 2015-2019
Table20: SDI Terrorism Index
Table 21: Chinese Military-Industrial Complex - Competitive Landscape
Table22: China North Industries Corporation - Product focus
Table23: China North Industries Corporation - Alliances
Table24: China North Industries Corporation - Recent Contract Wins
Table25: China Electronics Technology Group Corporation - Product focus
Table26: China Electronics Technology Group Corporation - Alliances
Table27: China Electronics Technology Group Corporation - Recent Contract Wins
Table28: Aviation Industry Corporation of China - Product focus
Table29: China National Nuclear Corporation - Product focus
Table30: China National Nuclear Corporation - Alliances
Table31: China National Nuclear Corporation - Recent Contract Wins
Table32: China Xinshidai Company - Product focus
Table33: China Xinshidai Company - Alliances
Table34: China Nuclear Energy and Construction - Product focus
Table35: China Nuclear Energy and Construction - Alliances
Table36: China Aerospace Science and Industry Corporation - Product focus
Table 37: China Aerospace Science and Industry Corporation - Alliances
Table38: China Aerospace Science and Technology Corporation - Product focus
Table39: China Aerospace Science and Technology Corporation- Alliances
Table40: China State Shipbuilding Corporation - Product focus
Table41: China National Electronics Import and Export Corporation - Product focus
Table42: China National Aero-Technology Import and Export Corporation - Product focus
Table 43: China National Aero-Technology Import and Export Corporation - Recent Contract Wins

LIST OF FIGURES

Figure 1: Chinese Defense Expenditure (US$ Billion),2010-2014
Figure 2: Chinese Defense Expenditure (US$ Billion),2015-2019
Figure 3: Chinese Defense Expenditure (in CNY Billion), 2010-2014
Figure 4: Chinese Defense Expenditure (in CNY Billion), 2015-2019
Figure 5: Chinese GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2010-2014
Figure 6: Chinese GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2015-2019
Figure 7:Chinese Defense Budget Split Between Capital and Revenue Expenditure (%),2010-2014
Figure 8: Chinese Defense Budget Split Between Capital and Revenue Expenditure (%),2015-2019
Figure 9: Chinese Defense Capital Expenditure (US$ Billion), 2010-2014
Figure 10: Chinese Defense Capital Expenditure (US$ Billion), 2015-2019
Figure 11: Chinese Capital Expenditure (in CNY Billion), 2010-2014
Figure 12: Chinese Capital Expenditure (in CNY Billion), 2015-2019
Figure 13: Chinese per capita defense expenditure (US$), 2010-2014
Figure 14: Chinese per capita defense expenditure (US$), 2015-2019
Figure 15: Chinese Homeland Security Budget, 2010-2014
Figure 16: Chinese Homeland Security Budget, 2015-2019
Figure 17: Chinese Homeland Security Budget (CNY Billion), 2010-2014
Figure 18: Chinese Homeland Security Budget (CNY Billion), 2015-2019
Figure 19: SDI Terrorism Heat Map, 2014
Figure 20: SDI Terrorism Index, 2014
Figure 21: Benchmarking with Key Markets - 2010-2014 vs. 2015-2019
Figure 22: Defense Expenditure of the World's Largest Military Spenders (US$ Billion),
Figure 23: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2014
Figure 24: Fighter and Multi-role Aircraft Market Size in China (US$ Billion), 2014-2024
Figure 25: Maritime Surveillance and Detection Market Size in China (US$ Billion), 2014-2024
Figure 26: Infrastructure Construction Market Size in China (US$ Billion), 2014-2024
Figure 27: Airborne based C4ISR System Market Size in China (US$ Billion), 2014-2024
Figure 28: Main Battle Tank Market Size in China (US$ Billion), 2014-2024
Figure 29: Destroyer Market Size in China (US$ Billion), 2014-2024
Figure 30: Chinese Defense Import Trend, 2009-2013(TIV values)
Figure 31: Chinese Defense Imports by Country (%), 2009-2013
Figure 32: Chinese Defense Imports by Category (%),2009-2013
Figure 33: Chinese Defense Exports Trend, 2009-2013(TIV values)
Figure 34: Chinese Defense Imports by Country (%),2009-2013
Figure 35: Chinese Defense exports by Category (%), 2009-2013
Figure 36: Industry Dynamics Porter's Five Forces Analysis
Figure 37: Chinese Population - Rural (In Millions), 2010-2019
Figure 38: Chinese Population - Urban (In Millions), 2010-2019
Figure 39: Chinese Number of Households 2008-2017
Figure 40: Chinese GDP per Capita, 2005-2014
Figure 41: Chinese GDP Current US$ (US$ Billion), 2010-2019
Figure 42: Chinese Exports of goods and services (current US$ Bn), 2002-2011
Figure 43: Chinese Imports of goods and services (US$ Billion), 2002-2011
Figure 44: Chinese Consumer Price Index, 2005-2014
Figure 45: Chinese LCU per US$, 2005-2014
Figure 46: Chinese LCU per Euro, 2005-2014
Figure 47: Chinese Lending rate (%), 2003-2012
Figure 48: Chinese Deposit Rate, 2003-2012
Figure 49: Chinese Real Interest Rate (%), 2003-2012
Figure 50: Chinese Market Capitalization of listed companies (US$ Billion), 2003-2012
Figure 51: Chinese Market Capitalization of listed companies as a percentage of GDP, 2002-2011
Figure 52: Chinese Goods Exports as a percentage of GDP, 2002-2011
Figure 53: Chinese Goods Imports as a percentage of GDP, 2002-2011
Figure 54: Chinese Goods Trade Surplus/Deficit as a percentage of GDP, 2002-2011
Figure 55: Chinese Services Imports (as a percentage of GDP), 2002-2011
Figure 56: Chinese Services Exports (as a percentage of GDP), 2002-2011
Figure 57: Chinese Services Trade surplus/deficit as a percentage of GDP, 2002-2011
Figure 58: Chinese Net Foreign Direct Investment (current US$ bn), 2002-2011
Figure 59: Chinese Net FDI as a percentage of GDP, 2002-2011
Figure 60: Chinese international reserves, including gold (US$ Bn), 2002-2011
Figure 61: Chinese external debt (US$ Bn), 2001-2010
Figure 62: Chinese external debt as a percentage of GDP, 2001-2010
Figure 63: Chinese Conventional Thermal Electricity Generation (BnKWH), 2002-2011
Figure 64: Chinese Hydroelectricity Net Generation (Bn KWH), 2003-2012
Figure 65: Chinese Nuclear Electricity net generation (Bn Kwh), 2003-2012
Figure 66: Chinese Total Conventional Thermal Electricity Installed Capacity (Bn Kwh), 2001-2010
Figure 67: Chinese Total Electricity Exports (Bn Kwh), 2003-2012
Figure 68: Chinese Total Electricity Imports (Bn Kwh), 2003-2012
Figure 69: Chinese proved reserves of Natural Gas (Trillion Cubic Ft), 2004-2013
Figure 70: Chinese Petroleum Consumption (Thousand Barrels Per Day), 2003-2012
Figure 71: Chinese Crude Oil Proved Reserves (Bn Barrels), 2004-2013
Figure 72: Chinese Non-Hydro Renewable Electricity Net Generation (Bn Kwh), 2002-2011
Figure 73: Chinese Rail lines (total route-km), 2001-2010
Figure 74: Chinese Air transport, freight (million ton-km), 2002-2011
Figure 75: Chinese Overall Construction (US$ Bn), 2007-2016
Figure 76: Chinese Mining, Manufacturing, Utilities Output (US$ Bn), 2002-2011
Figure 77: Chinese Patents granted, 2003-2012
Figure 78: Chinese Telephone Lines (in Mn), 2003-2012
Figure 79: Chinese Telephone lines penetration rate (per 100 people), 2003-2012

COMPANIES MENTIONED

China North Industries Corporation, China Electronics Technology Group Corporation, Aviation Industry Corporation of China, China National Nuclear Corporation, China Xinshidai Company, China Nuclear Energy and Construction, China Aerospace Science and Industry Corporation, China Aerospace Science and Technology Corporation, China State Shipbuilding Corporation, China National Electronics Import and Export Corporation, China National Aero-Technology Import and Export Corporation

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