China defence industry is fastest growing in Asia

China, Japan and Australia top the tables for defence industrial capabilities in Asia Pacific, according to a report on the new Market Potential Index released by Jane’s by IHS Markit, a world leader in critical information, analytics and solutions. “Multiple factors are driving rapid industrial development across Asia,” said Paul Burton, research director at Jane’s. “In addition to economic growth and a desire for military self-sufficiency, a complex security environment characterised by North Korea’s ongoing nuclear programme, and overlapping territorial claims in the East and South China Seas are leading to rapid growth in indigenous defense production throughout Asia.

“China’s defence industry has made substantial progress over the past decade towards achieving the advanced capabilities targeted by Beijing,” Burton said. “Further industrial reforms are required for China to address remaining capability gaps and attain its goal of at least parity with the world’s most advanced industrialised states. Beijing continues to transform its defence industrial base from one that imitates into one that innovates.”

Jane’s newly launched Market Potential Index ranks the industrial proficiencies of almost 100 defence markets worldwide. Using a unique methodology, it assesses the technological sophistication and scale of defence industrial competencies in the land, sea, air and electronics domains to produce a global ranking.

“What the countries at the top of this list have in common is strong government-backed research and development investment, a long-term approach to the growth of their national defence industries, and an emphasis on the involvement of domestic companies in national defence equipment programmes,” said Guy Anderson, associate director at Jane’s.
“Greater government-backed research and development investment in defence sectors has been a feature of the Asia Pacific as a whole, with regional investment having climbed 32 percent to $16.7 billion over the last five years,” Anderson said. “Over the next decade, we expect defence industrial self-reliance to increase in this part of the world, and for the defence industries of the Asia Pacific region to make a larger dent in world export markets.”