China's Military Expansion Contrasts with Declining Arms Exports

China is experiencing a paradoxical situation where its military presence across Asia is expanding, yet its arms exports are declining. According to the Stockholm International Peace Research Institute (SIPRI), Chinese arms exporters saw a significant drop of 10% in revenues, contrasting sharply with the double-digit growth of 39% for South Korea and 35% for Japan in the same period. Despite increased military activity, including the use of small arms and unmanned aerial vehicles in regional conflicts, China's defense companies, such as China North Industries Group Corporation (Norinco), have struggled to enhance their export performance.

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The decline in arms exports can be attributed to several structural issues within China's defense sector. Anushka Saxena, a Staff Research Analyst at the Takshashila Institute, highlighted that corruption and instability within the People's Liberation Army (PLA) have raised concerns among potential buyers. In 2025, 15 general officers were officially purged, and 46 others went missing, indicating significant internal disruption. This instability raises doubts about the reliability and continuity of arms deals, which typically require long-term commitments for servicing and spare parts.

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As China's arms exports falter, other Asian countries are capitalizing on the opportunity to expand their defense markets. South Korea's Hanwha Group reported a 42% increase in exports, reaching $8 billion, largely due to adherence to NATO standards and flexible technology transfer options. In contrast, Chinese arms have been criticized for low technology and performance issues, as well as concerns regarding maintenance and lifecycle support. Countries like South Korea and Türkiye are increasingly entering markets traditionally dominated by China, further complicating China's export ambitions.

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Japan's arms revenue has also risen to $10 billion, driven by domestic demand and a stronger stance on Taiwan under Prime Minister Sanae Takaichi. This shift has worsened relations with China, particularly following Takaichi's vocal opposition to Beijing's actions regarding Taiwan. China's Foreign Minister Wang Yi responded to these tensions by accusing Japan of harboring ambitions to invade Taiwan and warned of dire consequences if Japan attempts to revive militarism.

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China's military presence in the Asia-Pacific region is growing, yet its arms exports are under increasing pressure due to internal challenges and fierce competition from other nations. The credibility of Chinese defense exports hinges on stability, trust, and reliable technology, which are currently in question. As competition intensifies and internal disruptions persist, China faces a critical challenge in regaining its footing in the global arms market.

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• “There is deep suspicion of being affiliated with that China camp of defense imports.” — Anushka Saxena, Staff Research Analyst, Indo-Pacific Studies Programme, The Takshashila Institute.

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• “Arms exports from China have been seen to involve low-technology and performance issues.” — Atul Kumar, Fellow, Strategic Studies Programme at Observer Research Foundation.

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• “If it tries to turn back the clock of history, it will seal its own doom. If it gambles once more, it will only face a swifter defeat and suffer a more disastrous loss.” — Wang Yi, Chinese Foreign Minister.

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