China named fifth-largest arms exporter

Beijing ousts London from top five for first time in 60 years

Bloomberg, AP

China has pushed the U.K. out of the top five weapons exporters for the first time in more than 60 years as its growing military and economic might translate into global arms sales.

The U.S. led Russia, Germany, France and China in deliveries from 2008 to 2012, the Stockholm International Peace Research Institute said in a report Monday. Global exports rose 17 percent from the five-year period through 2007; China’s foreign sales of major conventional weapons surged 162 percent.

China has worked to reduce dependence on arms imports and has begun exporting indigenously developed military equipment, such as JF-17 combat jets to Pakistan.

“This is a tale of China’s rise,” said Paul Holtom, director of SIPRI’s arms transfers program. “China is looking to move beyond developing countries for sales, such as deals in North Africa with Algeria and Morocco.”

The U.K. dropped out of the top five for the first time since 1950. Exports from companies there, such as BAE Systems PLC, were largely flat. Exports from France and Germany fell.

The British government accounts for deals differently than SIPRI and said it was the second-largest exporter of weapons in 2011, the last year for which it has published figures.

The U.S. held the top spot in the five-year period with a 30 percent market share, ahead of Russia’s 26 percent. China’s share rose to 5 percent from 2 percent, with Pakistan, its largest buyer, accounting for 55 percent of the country’s exports, followed by Myanmar with 8 percent.

“Exports of military aircraft could provide potential upside” for China’s aerospace and defense industry, Alex Chang, an analyst for Citigroup, said in a note last week. The Hongdu Aviation-made L-15 trainer “with its highly competitive performance and price, has just received its first order and could be China’s next flagship export product in military aircraft.”

Chinese interests go beyond selling weapons. “For some companies involved in the import-export side, the arms deals certainly are not the major money maker,” Holtom said. “They grease the wheels in getting access for the more lucrative deals for infrastructure projects.”

China fell to second place for weapons imports in the period, ranking behind India, Russia’s largest client, and ahead of Pakistan, South Korea and Singapore.