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China Arms Sales
China's entrance into the international arms market in the
1980s was closely related to reforms in the defense industry and
the leadership's desire to acquire the foreign technology needed to
modernize PLA weaponry. Before 1980 China provided arms to friendly
Third World countries at concessionary prices
(see Relations with the Third World
, ch. 12). Because China transferred arms based on
ideological and foreign policy considerations, terms were generous.
Around 1980 China decided to sell weapons for profit to absorb
excess capacity in the defense industry, make defense enterprises
more economically viable, and earn the foreign currency required to
purchase foreign military technology. China continued to sell
military hardware at generous terms to some of its traditional
friends and weapons customers, such as Pakistan, the Democratic
People's Republic of Korea (North Korea), Egypt, Sudan, and
Somalia. Hard-currency sales to Middle Eastern countries, however,
particularly Iran and Iraq, accounted for the rapid increase in
Chinese weapons sales in the 1980s. United States Arms Control and
Disarmament Agency studies indicated that from 1979 to 1983 Chinese
arms sales ranked eighth in the world, for a total of about US$3.5
billion, of which an estimated US$2.1 billion went to Middle
Eastern countries. In 1979 arms sales accounted for 0.9 percent of
total exports; in 1983 arms sales rose to 6.3 percent of total
exports. By 1987 China had jumped to fifth place, ranking behind
the United States, the Soviet Union, Britain, and France.
In the 1980s the defense industry and the PLA established a
number of trading corporations to sell Chinese military hardware
and to acquire foreign technology. The most prominent of these
corporations were the China Xinshidai Corporation, affiliated with
the NDSTIC; China Northern Industrial Corporation (commonly known
as NORINCO), affiliated with the State Machine-Building Industry
Commission; China National Aero-Technology Import and Export
Corporation (CATIC), affiliated with the Ministry of Aeronautics;
Great Wall Industrial Corporation and China Precision Import and
Export Corporation, both affiliated with the Ministry of
Astronautics; China Electronics Import and Export Corporation,
affiliated with the Ministry of Electronics Industry; China
Shipbuilding Trading Corporation, affiliated with the China State
Shipbuilding Corporation; and China Xinxing Corporation, affiliated
with the PLA General Logistics Department. In 1984 these
corporations began promoting Chinese weapons, actively seeking
technology transfer and coproduction agreements with Western
defense companies at international defense exhibitions in 1984.
Data as of July 1987
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