China Defence and Security Report Q3 2011
Includes 3 FREE quarterly updates
With a military budget second only to the United States, China has developed a strategy for the future and is working towards it despite the impediments of trade embargoes and sanctions. Its economy continues to grow, albeit at a reduced rate, with domestic consumption buoying the country through a time of flagging export profits. China’s defence vision includes cyber and space technology. Without the benefit of knowledge sharing it has developed its own techniques and equipment.
Geo-political leadership within the region remains a goal for China. China has carefully observed other countries and learned from their relations with each other. With greater expertise in all areas, China is becoming stronger and better equipped. Relations are currently tense with Taiwan and the US, but appear to be amicable with North Korea. The United States continues to maintain a presence in the region as a peacekeeping force. Russia and Japan each view the emerging capability of China with some concern. In a region fraught with old tensions over territory and ideology, an uneasy peace continues with no nation strong enough or wealthy enough to make a stand. Cool partnerships exist in military exercises and trade. China has on many occasions petitioned for a removal of sanctions imposed in 1989 but at the time of writing they remain in place. Despite this obstacle, China has developed a capable range of military defences and maintains a watchful eye on regional affairs and domestic security matters.
Refugees fleeing North Korea remain a concern for China's internal security. Relations with the US, stalled since 2010 over the supply of US arms to Taiwan, received a shaky restart in January 2011 when Secretary of State for Defence Gates visit to China was upstaged by the first test-flight of China's new stealth fighter.
BMI predicts lower real GDP growth in China this year than the consensus view, forecasting 8.3% versus a consensus of 9.5%. The two major growth pillars, trade processing and construction, face significant headwinds: the former from slower growth in global trade (weighted down by the recent Japan earthquake); and, the latter from reduced money supply growth. Current growth momentum indicators also appear to be suggesting growth weakness ahead.
With a military budget second only to the United States, China has developed a strategy for the future and is working towards it despite the impediments of trade embargoes and sanctions. Its economy continues to grow, albeit at a reduced rate, with domestic consumption buoying the country through a time of flagging export profits. China’s defence vision includes cyber and space technology. Without the benefit of knowledge sharing it has developed its own techniques and equipment.
Geo-political leadership within the region remains a goal for China. China has carefully observed other countries and learned from their relations with each other. With greater expertise in all areas, China is becoming stronger and better equipped. Relations are currently tense with Taiwan and the US, but appear to be amicable with North Korea. The United States continues to maintain a presence in the region as a peacekeeping force. Russia and Japan each view the emerging capability of China with some concern. In a region fraught with old tensions over territory and ideology, an uneasy peace continues with no nation strong enough or wealthy enough to make a stand. Cool partnerships exist in military exercises and trade. China has on many occasions petitioned for a removal of sanctions imposed in 1989 but at the time of writing they remain in place. Despite this obstacle, China has developed a capable range of military defences and maintains a watchful eye on regional affairs and domestic security matters.
Refugees fleeing North Korea remain a concern for China's internal security. Relations with the US, stalled since 2010 over the supply of US arms to Taiwan, received a shaky restart in January 2011 when Secretary of State for Defence Gates visit to China was upstaged by the first test-flight of China's new stealth fighter.
BMI predicts lower real GDP growth in China this year than the consensus view, forecasting 8.3% versus a consensus of 9.5%. The two major growth pillars, trade processing and construction, face significant headwinds: the former from slower growth in global trade (weighted down by the recent Japan earthquake); and, the latter from reduced money supply growth. Current growth momentum indicators also appear to be suggesting growth weakness ahead.
Contents
Executive SummarySWOT Analysis
China Defence Industry SWOT
China Security SWOT
China Political SWOT
China Economic SWOT
China Business Environment SWOT
Global Political Outlook
Japan After The Quake
Global Hotspots: Libya, Iran, Afghanistan, Korea
Wild Cards To Watch
North East Asia Security Overview
The Geopolitical Importance Of North East Asia
Flashpoints And Faultlines In North East Asia
The Evolution Of North East Asia
Security Risk Ratings
BMI’s Security Ratings
Table: Asia Pacific Regional Security Ratings
Table: Asia Pacific State Vulnerability To Terrorism Index
China’s Security Risk Rating
City Terrorism Rating
Table: BMI’s Asia City Terrorism Index
Security Overview
Internal Security Situation
External Security Situation
Shanghai Cooperation Organisation
China-US Relations
China-Japan Relations
China-Taiwan Relations
China-Tibet Relations
China-Korea Relations
China-Russia Relations
China-India Relations
EU Arms Embargo
Armed Forces And Government Spending
Joint Operations And Exercises
International Deployments
Table: China’s Deployments
Peace Missions
Weapons Of Mass Destruction
Market Overview
Recent Changes
Arms Trade Overview
Industry Trends And Developments
Procurement Trends And Developments
Competitive Landscape
Table: Key Players In China’s Defence Sector
Industry Forecast Scenario
Armed Forces
Table: China’s Military Personnel, 2000-2008 (‘000 personnel, unless otherwise stated)
Table: China’s Manpower Available For Military Service, 2008-2015 (aged 16-49, unless otherwise stated))
Defence Expenditure
Table: Defence Expenditure, 2008-2015
Table: Defence Expenditure Scenario – Changing % Of GDP, 2010-2015 (US$mn)
Defence Trade
Table: China’s Defence Exports, 2008-2015 (US$mn)
Table: China’s Defence Imports, 2008-2015 (US$mn)
Table: China’s Defence Trade Balance, 2008-2015 (US$mn)
Key Risks To BMI’s Forecast Scenario
Macroeconomic Outlook
Table: China – Economic Activity, 2008-2015
Company Profiles
Chengdu Aircraft Company
China Aviation Industry Corporation
China National Nuclear Corporation
China Shipbuilding Industry Corporation
China South Industries Group Corporation
BMI Methodology
How We Generate Our Industry Forecasts
Defence Industry
City Terrorism Rating
Table: City Terrorism Rating Methodology
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