Integrated systems new trend in arms sales

The Zhuhai air show reveals move away from selling individual weapons, analysts say

This year’s Zhuhai air show – China’s premier arms and aviation trade fair – revealed a clear trend away from individual weapons sales towards integrated systems, a move observers said would insulate its position against competitors like South Korea.

Deals worth a total of US$40 billion were struck at the China International Aviation and Aerospace Exhibition in Zhuhai last month, organisers said.

Da Ivan, a military columnist, said the air show revealed a clear trend in Chinese military exports of “providing systematic solutions rather than individual weapons, which would be a comparative advantage to South Korea”.

Da pointed to China Aerospace Science and Industry Corporation’s 12-device antidrone system and Norinco’s “new-generation army brigade combat team” – able to equip 10 battalions of tank, anti-tank, infantry, artillery, air defence, drones, logistics and support operations – as examples on display at Zhuhai.

He also suggested there were opportunities for China to fill gaps in the market created by tensions between the US and Saudi Arabia, one of its main buyers, as well as Russia’s war in Ukraine, which had affected Russian exports.

South Korea is on track to surpass China in international arms sales, with a research institute in Seoul suggesting last month it may already have done so.

South Korean arms exports in 2022 are more than double last year’s historic high, with US$17 billion in sales, as of November, and the potential to reach US$20 billion if two deals in negotiation can be secured this month.

But observers said South Korea’s rapid rise was unlikely to affect China’s business, which had also been picking up speed against the backdrop of the war in Ukraine and regional tensions.

One reason is the very different markets targeted by the two countries. According to the Stockholm International Peace Research Institute (SIPRI), China’s primary clients are in South Asia and Africa. No European countries bought arms from China.

About 60 per cent of weapons exported from China between 2016 and 2020 went to Pakistan, Algeria and Bangladesh, SIPRI found. Last year, nearly 70 per cent of Chinese arms sales were to Pakistan, with Nigeria rising to second place on its client list.

South Korea’s top buyers from 2016 to 2020 were Britain, the Philippines and Indonesia.

Chinese military commentator Song Zhongping said South Korea was mainly taking market share from the US, rather than China.