By Greg Torode

Item 1 of 4 A member of the People’s Liberation Army stands as the strategic strike group displays YJ-21 missiles during a military parade to mark the 80th anniversary of the end of World War Two, in Beijing, China, September 3, 2025. REUTERS/Tingshu Wang/File Photo

[1/4] A member of the People’s Liberation Army stands as the strategic strike group displays YJ-21 missiles during a military parade to mark the 80th anniversary of the end of World War Two, in Beijing, China, September 3, 2025. REUTERS/Tingshu Wang/File Photo Purchase Licensing Rights , opens new tab

HONG KONG, Dec 1 (Reuters) – Revenues at China’s giant military firms fell last year as corruption purges slowed arms contracts and procurement, according to a study released on Monday by a leading conflict think tank.

The Chinese declines contrast with strong revenue growth globally for big arms and military-services companies, fuelled by wars in Ukraine and Gaza, and global and regional tensions, the research by the Stockholm International Peace Research Institute found.

“A host of corruption allegations in Chinese arms procurement led to major arms contracts being postponed or cancelled in 2024,” said Nan Tian, director of SIPRI’s Military Expenditure and Arms Production Programme.

“This deepens uncertainty around the status of China’s military modernisation efforts and when new capabilities will materialise.”

CHINA’S REVENUES DOWN 10%, JAPAN’S UP 40%

The People’s Liberation Army was one of the main targets of a broader corruption crackdown ordered by President Xi Jinping in 2012, reaching the upper levels of the military in 2023 when its Rocket Force was targeted.

Eight top generals were expelled from the ruling Communist Party on graft charges in October, including the country’s number two general, He Weidong. He had served under Xi on the Central Military Commission, China’s supreme military command organisation.

Asian and Western diplomats say they are still trying to gauge the impact of the crackdown on China’s ongoing military rise and how far down it reaches through the command chain.

Revenues of China’s top military firms fell 10% last year, while those in Japan surged 40%, Germany 36% and U.S. revenues rose 3.8%, SIPRI data shows.

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