China’s Arms Sales Plunges Double Digits While Global Revenue Soars to Record High

The report attributes the arms sales drop to Xi Jinping’s military purge.

Published: 12/1/2025, 2:32:14 PM EST

China’s Arms Sales Plunges Double Digits While Global Revenue Soars to Record High — A Chinese paramilitary policeman stands guard outside the Great Hall of the People in Beijing on Feb. 26, 2025. (Pedro Pardo/AFP via Getty Images)

With the showcasing of advanced nuclear and strategic systems, the constant display of aircraft and warships used to intimidate Taiwan, and what U.S. officials have described as a “lifeline” for Russia’s war machine, China is often deemed a country with rapid weapons growth.

However, this perception is misleading. According to a report from the Stockholm International Peace Research Institute (SIPRI), China’s defence industry shrank by 10 percent last year.

"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.

Amid ongoing conflicts in Ukraine and Gaza, as well as other global and regional tensions, revenues for the world’s 100 largest arms and military-service companies increased by 5.9 percent in 2024, reaching a record $679 billion—the highest level since 2018.

While revenues hit this all-time high—with Japanese companies surging 40 percent, German firms rising 36 percent, and U.S. companies growing 3.8 percent—China’s sharp drop was clearly visible.

The report attributes this contraction to Chinese leader Xi Jinping’s sustained anti-corruption campaigns within the military and defense sector.

Beginning in 2023, Xi’s anti-corruption drive extended and reached its climax in 2025 with the downfall of members of the Central Military Commission (CMC) and Politburo-level generals.

This wave is regarded as the largest-scale military purge since the Mao era.

On Oct. 17—just three days before the opening of the Fourth Plenary Session of the 20th Central Committee—the CCP announced the expulsion from the Party and transfer to military prosecutors of nine generals for “serious violations of Party discipline and state law” and “massive duty-related crimes.” Most of these individuals had been personally promoted by Xi.

Among the nine were He Weidong, vice chairman of the CMC and Politburo member, widely regarded as one of Xi’s most trusted confidants who was responsible for operational planning against Taiwan; and Miao Hua, former director of the CMC Political Work Department and admiral in the Navy.

This further casts doubt on whether the PLA will achieve its critical capability and combat-readiness goals in time for the 100th anniversary of its founding, said Xiao Liang, a researcher at SIPRI. The PLA traces its origins to the Red Army founded by Mao in 1927.

"However, in the medium and longer term, sustained investment in defence budgets and political commitment behind modernisation will continue, albeit with some programme delays, higher costs and tighter control of procurement," Liang said.