{"id":61211,"date":"2022-08-08T09:15:00","date_gmt":"2022-08-08T09:15:00","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2022\/08\/08\/chinas-military-modernization-spurs-growth-for-state-owned-enterprises\/"},"modified":"2026-08-08T00:35:27","modified_gmt":"2026-08-08T00:35:27","slug":"chinas-military-modernization-spurs-growth-for-state-owned-enterprises","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/commentary\/2022\/08\/08\/chinas-military-modernization-spurs-growth-for-state-owned-enterprises\/","title":{"rendered":"China\u2019s military modernization spurs growth for state-owned enterprises"},"content":{"rendered":"\n

In 2021, Chinese defense-related revenue grew for each of the seven state-owned enterprises involved in Chinese defense production. Growth was variable between the seven enterprises, but all have benefited from relative economic growth in 2021, as well as the People\u2019s Liberation Army\u2019s continued modernization and procurement of naval, aerospace and ground-based capabilities.<\/p>\n\n\n\n

Companies in the shipbuilding and electronics industries saw particularly high growth between 2020 and 2021. Chinese state-owned enterprises, or SOE, have reportedly also made significant progress toward fully implementing the State Council\u2019s three-year SOE reform plan, due to be completed prior to the 20th Party Congress in the autumn this year.<\/p>\n\n\n\n

In 2021, the Aviation Industry Corporation of China \u2014 otherwise known as AVIC \u2014 remained the top defense-related state-owned enterprise in China for a fourth year in a row, according to analysis by the International Institute for Strategic Studies.<\/p>\n\n\n\n

See the Top 100 list here<\/b><\/a><\/p>\n\n\n\n

Per the Defense News Top 100<\/a> lists, AVIC\u2019s total revenue grew from $67.9 billion in 2020 to $80.4 billion in 2021, while its defense-related revenue grew by 18%, from $25.5 billion in 2020 to $30.2 billion.<\/p>\n\n\n\n

In line with requirements in the 14th Five-Year Plan as well as PLA Air Force and PLA Navy requirements<\/a>, Chinese securities firms expect continued growth for AVIC\u2019s defense-related and civilian business. Owing to this strong rate of growth, AVIC held its position as the sixth-largest defense company in the world on the Top 100.<\/p>\n\n\n\n

However, it was not the fastest rate of growth among Chinese SOEs. Between 2020 and 2021, defense-related revenues for China Electronics Technology Group (CETC) and China South Industries Group Corporation (CSGC) is estimated to have increased by 40% and 28%, respectively.<\/p>\n\n\n\n

The uplift in CETC\u2019s revenue was due to the June 2021 acquisition of telecommunications rival China Putian Information Industry Group, also known as Potevio, whose 2019 revenues came to 116 billion yuan (U.S. $17 billion). The acquisition means CETC\u2019s total revenue in 2021 reached $58 billion, of which IISS estimates that $14.7 billion is for defense-related activities, which sees the company jump from 15th to 11th place on this year\u2019s Top 100.<\/p>\n\n\n\t