The Chinese Defense Industry: Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017

Product Synopsis
This report is the result of SDI/ICD Research's extensive market and company research covering the Chinese defense industry. It provides detailed analysis of both historic and forecast defense industry values including key growth stimulators, analysis of the leading companies in the industry, and key news

Introduction and Landscape
Why was the report written?
The Chinese Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017 offers the reader insights into the market opportunities and entry strategies adopted by foreign original equipment manufacturers (OEMs) in order to gain market share in the Chinese defense industry.

What is the current market landscape and what is changing?
The Chinese defense market registered significant growth during the review period and is expected to retain this positive growth rate during the forecast period. The Chinese defense budget, which valued US$104.62 billion in 2012, is the largest defense budget in the Asia-Pacific region. Defense expenditure grew at a CAGR of 11.5% during the review period. Due to the rapid growth of the country's defense budget, the Chinese army is now capable of rivaling the leading military powers of Western European countries.

What are the key drivers behind recent market changes?
China is expected to spend US$722.4 billion in the fulfillment of its defense requirements. Factors such as Sino-US relations, asymmetric warfare and the threat from Taiwan to its territorial integrity are expected to stimulate defense expenditure during the forecast period. China's emphasis on the import of technology rather than in the import of finished equipment will continue to lead the development of domestic defense firms.

What makes this report unique and essential to read?
The Chinese Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017 provides detailed analysis of the current industry size and growth expectations from 2013 to 2017, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides detailed understanding of emerging opportunities in specific areas of defense market.

Key Features and Benefits
The report provides detailed analysis of the current industry size and growth expectations from 2013 to 2017, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides detailed understanding of emerging opportunities in specific areas.

The report includes trend analysis of imports and exports, together with its implications and impact on the Chinese defense industry.

The report covers five forces analysis to identify various power centers in the industry and how these are expected to develop in the future.

The report allows readers to identify possible ways to enter the market, together with detailed descriptions of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives.

The report helps the reader to understand the competitive landscape of the defense industry in China. It provides an overview of key defense companies, both domestic and foreign, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.

Key Market Issues
Despite structural reforms, the Chinese defense industry remains under state control and contains very little competition. Barring a few industrial enterprises, the majority of organizations fail to compete with each other, which impedes the development of China's modern indigenous defense industry as there is no incentive for companies to innovate.

Following the 1989 Tiananmen Square massacre, an arms embargo was imposed by the US and other European countries. During the review period, some European states have proposed lifting the arms ban, but the US and Japan have opposed this proposal due to fears that it will enable China to enhance its military capabilities. As a result, China's defense industry is unable to acquire sophisticated military hardware from the US or Western European countries.

Key Highlights
Chinese defense expenditure, estimated at US$104.62 billion during 2012, grew at a CAGR of 11.5% during the review period. During the forecast period, it is expected to record a CAGR of 8.49% and reach US$174.9 billion by 2017. Over the next five years the country's defense expenditure is expected to be driven by factors such as Sino-US relations, asymmetric warfare and the threat from Taiwan to its territorial integrity.

During the review period, aircraft and armored vehicles were the main categories in defense exports by China. In 2011, China exports defense products to 36 countries with a total value of US$1.35 billion. With the rapid grow of domestic defense companies, defense exports are expected to remain high during the forecast period. SHOW LESS READ MORE >

1 Introduction
1.1 What is this Report About?
1.2 Definitions
1.3 Summary Methodology
1.4 SDI Terrorism Index
1.5 About Strategic Defence Intelligence
2 Executive Summary
3 Market Attractiveness and Emerging Opportunities
3.1 Defense Market Size Historical and Forecast
3.1.1 Chinese defense expenditure to grow at a CAGR of XX% during the forecast period
3.1.2 Desire to emerge as a global superpower drives China's defense expenditure
3.1.3 Chinese defense expenditure driven by economic growth
3.2 Analysis of Defense Budget Allocation
3.2.1 Capital expenditure allocation expected to remain at an average of XX%
3.2.2 Per capita defense expenditure expected to increase during the forecast period
3.2.3 China will spend US$XX billion over the forecast period on military hardware
3.3 Homeland Security Market Size and Forecast
3.3.1 Chinese homeland security worth US$XX billion in 2012
3.3.2 Political instability will drive the Chinese homeland security spending
3.3.3 China falls under “low risk” of terrorism category
3.4 Benchmarking with Key Global Markets
3.4.1 China is second-fastest-growing defense budget among the largest defense spenders globally
3.4.2 China has the second-largest defense budget in the world
3.4.3 China allocates lower share of GDP for defense compared to US and other European countries
3.4.4 China faces minimal threat from foreign terrorist organizations
3.5 Market Opportunities: Key Trends and Growth Stimulators
3.5.1 Communications network improvements would drive joint ventures with foreign firms
3.5.2 Demand for missiles expected to increase
3.5.3 Increased demand for helicopters and aircraft
3.5.4 Naval modernization to drive the demand for maritime weaponry
3.5.5 China plans to upgrade its command, control and intelligence capabilities
3.5.6 Modernization of existing defense equipment will create demand for personnel training
3.5.7 Authoritarian regime will drive the surveillance technology market in China
3.5.8 Transformation of defense companies into an industrial base dependent on foreign technology
4 Defense Procurement Market Dynamics
4.1 Import Market Dynamics
4.1.1 China acquires civilian technologies from foreign OEMs which could be used to improve its defense systems
4.1.2 Defense imports are expected to remain low during the forecast period
4.1.3 Russia account for the majority of Chinese defense imports
4.1.4 Missiles, aircraft and air defense systems are most imported military hardware
4.2 Export Market Dynamics
4.2.1 Chinese arms sales continue to rise
4.2.2 China strengthens its hold in emerging markets by offering low-cost defense equipment
5 Industry Dynamics
5.1 Five Forces Analysis
5.1.1 Bargaining power of supplier: low to high
5.1.2 Bargaining power of buyer: medium to high
5.1.3 Barriers to entry: high
5.1.4 Intensity of rivalry: low
5.1.5 Threat of substitution: low
6 Market Entry Strategy
6.1 Market Regulation
6.1.1 The Chinese military-industrial complex opens up to private sector participation
6.1.2 Defense industry remains closed to direct foreign investment
6.2 Market Entry Route
6.2.1 Foreign technology finds its way into Chinese defense industry through the dual base economy
6.3 Key Challenges
6.3.1 Lack of competition and cooperation among firms, as well as barriers to innovation, continues to hamper the performance of the Chinese defense industry
6.3.2 Arms embargo imposed by the US and European countries
7 Competitive Landscape and Strategic Insights
7.1 Competitive Landscape Overview
7.1.1 State-owned enterprises are the only major players in China's defense industry
7.1.2 Foreign technology enters the Chinese defense market by supplying civil use products
7.2 Key Domestic Companies
7.2.1 Aviation Industry Corporation of China: overview
7.2.2 Aviation Industry Corporation of China: products and services
7.2.3 Aviation Industry Corporation of China: recent announcement and strategic initiatives
7.2.4 Aviation Industry Corporation of China: alliances
7.2.5 China Electronics Technology Group Corporation: overview
7.2.6 China Electronics Technology Group Corporation: products and services
7.2.7 China Electronics Technology Group Corporation: recent announcement and strategic initiative
7.2.8 China Electronics Technology Group Corporation: alliances
7.2.9 China Electronics Technology Group Corporation: recent contract wins
7.2.10 China National Nuclear Corporation: overview
7.2.11 China National Nuclear Corporation: products and services
7.2.12 China National Nuclear Corporation: recent announcement and strategic initiatives
7.2.13 China National Nuclear Corporation: alliances
7.2.14 China National Nuclear Corporation: recent contract wins
7.2.15 China Xinshidai Company: overview
7.2.16 China Xinshidai Company: products and services
7.2.17 China Xinshidai Company: recent announcement and strategic initiatives
7.2.18 China Xinshidai Company: alliances
7.2.19 China Nuclear Energy and Construction: overview
7.2.20 China Nuclear Energy and Construction: products and services
7.2.21 China Nuclear Energy and Construction: recent announcement and strategic initiatives
7.2.22 China Nuclear Energy and Construction: alliances
7.2.23 China North Industries Corporation: overview
7.2.24 China North Industries Corporation: products and services
7.2.25 China North Industries Corporation: recent announcement and strategic initiatives
7.2.26 China North Industries Corporation: alliances
7.2.27 China North Industries Corporation: recent contract wins
7.2.28 China Aerospace Science and Industry Corporation: overview
7.2.29 China Aerospace Science and Industry Corporation: products and services
7.2.30 China Aerospace Science and Industry Corporation: recent announcement and strategic initiatives
7.2.31 China Aerospace Science and Technology Corporation: overview
7.2.32 China Aerospace Science and Technology Corporation: products and services
7.2.33 China Aerospace Science and Technology Corporation: recent announcement and strategic initiatives
7.2.34 China Aerospace Science and Technology Corporation: alliances
7.2.35 China State Shipbuilding Corporation: overview
7.2.36 China State Shipbuilding Corporation: products and services
7.2.37 China State Shipbuilding Corporation: recent announcement and strategic initiatives
7.2.38 China National Electronics Import and Export Corporation: overview
7.2.39 China National Electronics Import and Export Corporation: products and services
7.2.40 China National Aero-Technology Import and Export Corporation: overview
7.2.41 China National Aero-Technology Import and Export Corporation: products and services
7.2.42 China National Aero-Technology Import and Export Corporation: recent announcement and strategic initiatives
8 Business Environment and Country Risk
8.1 Demographics & Social Statistics
8.1.1 Population - Female
8.1.2 Population - Male
8.2 Economic Performance
8.2.1 Current Account Balance as Percentage of GDP
8.2.2 Deposit Interest Rate
8.2.3 Exports of goods and services, current prices
8.2.4 External debt as percentage of GDP (%)
8.2.5 Foreign Direct Investment
8.2.6 GDP at Purchasing Power Parity
8.2.7 GDP, Constant Prices (Local Currency)
8.2.8 GDP, Constant Prices (US$)
8.2.9 GDP, Current Prices (Local Currency)
8.2.10 GDP, Current Prices (US$)
8.2.11 General Government Final Consumption Expenditure
8.2.12 Gross Fixed Capital Formation, Current Prices
8.2.13 Imports of goods and services
8.2.14 Inflation, average consumer prices
8.2.15 Interest Rate (Lending)
8.2.16 Manufacturing Output, Current Prices (Local Currency Bn)
8.2.17 US$- Exchange Rate (Annual Average)
8.4 Energy and Utilities
8.4.1 Crude Oil Distillation Capacity
8.4.2 Electricity Exports.
8.4.3 Electricity Imports
8.4.4 Electricity Installed Capacity
8.4.5 Fossil Fuels Proved natural gas reserves
8.4.6 Fossil Fuels- Proved oil reserves
8.4.7 Hydroelectricity Installed Capacity
8.4.8 Natural Gas Consumption
8.4.9 Natural Gas Imports
8.4.10 Natural Gas Production
8.4.11 Net Conventional Thermal Electricity Generation
8.4.12 Net Geothermal, Solar, Wind, and Wood Electric Power Generation
8.4.13 Net Hydroelectric Power Generation
8.4.14 Nuclear Electricity Net Generation
8.4.15 Petroleum, Consumption
8.4.16 Petroleum, Production
8.5 Labour Force
8.5.1 People Employed in R & D
8.6 Minerals
8.6.1 Coal Consumption
8.6.2 Coal Production
8.7 Social & Political Risk
8.7.1 Political Stability Index
8.7.2 Transparency Index
9 Appendix
9.1 Contact Us
9.2 About SDI
9.3 Disclaimer

Aviation Industry Corporation of China China Electronics Technology Group CorporationChina National Nuclear CorporationChina Xinshidai CompanyChina Nuclear Energy and ConstructionChina North Industries CorporationChina Aerospace Science and Industry CorporationChina Aerospace Science and Technology CorporationChina State Shipbuilding CorporationChina National Electronics Import and Export CorporationChina National Aero-Technology Import and Export Corporation