Business Monitor International


China Defence & Security Report

Published 17 July 2014

  • 104 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,295.00
China Defence & Security Report

BMI View:   China's establishment of an Air Defense Identification Zone (ADIZ) in November 2013 has significantly raised geopolitical tensions in the Asia Pacific region, and risks creating a major backlash against Beijing. Tensions over the disputed Diaoyu/Senkaku Islands with Japan also remain a concern.

We expect China's defence budget to reach USD133bn. For the remainder of the forecast period, up to and including 2018, we expect that China will spend up to USD187bn on average on defence annually. China's steady increase in defence spending levels is as much a reflection of the country's increasing economic confidence and security concerns as much as it is a reflection of the country's desire to modernise its military.

BMI has given China an overall security risk rating of 74 for Q314. On average, the country has scored an overall risk rating of 74 for the period January 2007 up to Q314. As the discussion below will note, China has a low risk of becoming involved in a major interstate conflict. It also has a similarly low risk of experiencing a major terrorist attack. However, the country's risk of significant criminal activity is arguably higher.

In terms of defence exports, China is heavily promoting the WMD-7 targeting pod manufactured by the China National Aero-Technology Import and Export Corporation (CATIC). Meanwhile, China's Poly Technologies signed a memorandum of understanding with SME Ordnance of Malaysia which will see the former supplying the latter with equipment to manufacture cases for 5.56mm ammunition.

Regarding defence procurement, as of June 2014, Beijing appears to be close to signing a deal with the United Aircraft Corporation of Russia for the supply of Sukhoi Su-35 multirole combat aircraft. In addition to the deal finalising the Su-35 export from Russia to China reports circulated in late-May 2014 that China was interested in obtaining the advanced Almaz-Antey S-400 medium-to-long range surface to air missile system from Russia.

Table of Contents

Executive Summary
5
SWOT Analysis
7
China Security SWOT
7
China Defence Industry SWOT
9
China Political SWOT
10
China Economic SWOT
11
China Business Environment SWOT
11
Global Political Outlook
13
Table: Elections in 2013
17
North East Asia Security Overview
21
North East Asia: The Strategic Outlook For The 2010s
21
The Geopolitical Importance Of North East Asia
21
Flashpoints And Faultlines In North East Asia
22
The Taiwan Strait
24
The Evolution Of North East Asia
28
Security Risk Analysis
31
Table: Asia Pacific Regional Security Ratings
31
Table: Asia Pacific State Vulnerability To Terrorism Index
32
China's Security Risk Rating
32
Political Overview
34
Domestic Politics
34
Foreign Relations
36
China Security Overview
39
Internal Security Situation
39
China-Tibet Relations
40
External Security Situation
41
Shanghai Cooperation Organisation
43
China-US Relations
43
China-Japan Relations
48
China-Taiwan Relations
50
China-Korea Relations
52
China-Russia Relations
53
China-India Relations
54
China-ASEAN Relations
56
EU Arms Embargo
58
China's Aircraft Carrier Programme: Global Implications
59
Armed Forces And Government Spending
64
Joint Operations And Exercises
67
International Deployments
69
Table: China's Deployments
69
Peace Missions
69
Weapons Of Mass Destruction
69
Recent Changes
74
Arms Trade Overview
75
Industry Trends And Developments
78
Procurement Trends And Developments
79
Competitive Landscape
81
Table: Key Players In China's Defence Sector
81
Industry Forecast Scenario
84
Armed Forces
84
Table: China's Armed Forces, 2002-2009 ('000 personnel, unless otherwise stated)
84
Table: China's Manpower Available For Military Service, 2010-2017 (aged 16-49, unless otherwise stated)
84
Defence Expenditure
85
Table: China's Defence Expenditure, 2010-2017
85
Table: Defence Expenditure Scenario - Changing % Of GDP (US$mn)
86
Defence Trade
87
Table: China's Defence Exports, 2010-2017 (US$mn)
87
Table: China's Defence Imports, 2010-2017 (US$mn)
87
Table: China's Defence Trade Balance, 2010-2017 (US$mn)
88
Key Risks To BMI's Forecast Scenario
88
Macroeconomic Outlook
88
Company Profiles
93
Chengdu Aircraft Company
93
China Aviation Industry Corporation
94
China National Nuclear Corporation
96
China Shipbuilding Industry Corporation
97
China South Industries Group Corporation (CSG)
99
BMI Methodology
100
How We Generate Our Industry Forecasts
100
Defence Industry
100
Sources
101

The China Defence & Security Report features Business Monitor International (BMI)'s independent forecasts for national and international security, the defence industry, military expenditure, employment in arms production, and arms imports and exports, as well as examining industry trends and prospects, national and multinational arms producers and the regulatory environment.

BMI's China Defence & Security Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Chinese defence and security industry.

Key Benefits

  • Benchmark BMI's independent defence and security industry forecasts on China to test other views - a key input for successful budgetary and strategic business planning in the Chinese defence and security market.
  • Tar

    Coverage

    Global and Regional Political Outlooks

    A strategic overview of the world's major political risks, identifying countries facing leadership successions and nations at risk of upheaval, inter-state conflict or separatism and insurgencies, plus a summary of the world's 'wild card' low-probability high-impact risks.

    SWOT Analysis

    Snapshot evaluation of the major issues affecting the defence and security sectors, economy and politics, with issues subdivided into 'Strengths', 'Weaknesses', 'Opportunities' and 'Threats'.

    Political Risk Assessment

    Drawing on BMI's heritage of more than 25 years of Country Risk analysis, this comprehensively evaluates the key risks to domestic politics and foreign relations, focusing on issues most likely to affect either domestic security or the defence sector.

    Security Risk Analysis

    BMI's proprietary Security Risk Rankings provide a reliable - and country comparable - guide to conflict, terrorism and criminal risk, backed up by our analyst's latest assessment of each component. Furthermore, drawing on our country risk expertise, we assess the state's vulnerability to a serious - or prolonged - terrorist campaign.

    Armed Forces Spending/Expenditure

    The reports contain a detailed breakdown of areas of expenditure by the armed forces, these include spending on international deployments, WMDs and missile defence systems as well as individual breakdowns of the cost-per-soldier.

    Domestic Security Overview

    The domestic security overview lists the various potential internal security threats facing a country, ranging from internal security issues such as terrorism, cyber terrorism, crime and drugs, to external security issues including general defence procedures and potential threats from specific countries.

    BMI Industry Forecast Scenario

    Historic data series and forecasts to end-2018 for key industry indicators supported by explicit assumptions, plus analysis of key downside risks to the main forecast.

    Budgets & Expenditure: Defence expenditure (local currency and US$bn); defence expenditure (% of total budget); defence expenditure (% of GDP); defence expenditure per capita, US$; defence budget (local currency and US$bn).

    Employment: Employment in arms production (`000s); employment in arms production (% of labour force).

    Macroeconomic: BMI's forecasts and analysis of all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt.

    Company Profiles

    Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

    Domestic Security Overview

    The reports also provide a regional overview which details specific issues and flashpoints affecting , along with potential risks in the coming year.

secure
Benefit from discounts when you add multiple products to your basket
2 Products SAVE 10%
3 Products SAVE 15%
4 Products SAVE 20%
5 Products SAVE 25%
6 Products SAVE 30%
7 - 20 Products SAVE 35%
21 Products or more SAVE 40%

Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc