The Chinese Defense Industry – Market Opportunities and Entry Strategies, Analyses and Forecasts to 2016

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					                               Defense




The Chinese Defense Industry –
Market Opportunities, Entry
Strategies, Analyses and Forecasts
to 2016
Reference code: DF0068MR

Published: November 2011




                           www.icd-research.com
TABLE OF CONTENTS



TABLE OF CONTENTS

1      Introduction ......................................................................................................................... 12
    1.1 What is this Report About? ..............................................................................................................12
    1.2 Definitions .......................................................................................................................................12
    1.3 Methodology ...................................................................................................................................14
       1.3.1      Secondary research............................................................................................................................. 14
       1.3.2      Primary research ................................................................................................................................. 14
       1.3.3      Conventions ........................................................................................................................................ 14
    1.4 ICD Research Intelligence Terrorism Index .....................................................................................14
    1.5 About ICD Research .......................................................................................................................15
    1.6 About Strategic Defence Intelligence (www.strategicdefenceintelligence.com)................................15
2      Executive Summary ............................................................................................................ 16
3      Market Attractiveness and Emerging Opportunities ........................................................ 18
    3.1 Defense Market Size Historical and Forecast ..................................................................................19
       3.1.1      Chinese defense expenditure to grow at a CAGR of 9.90% during the forecast period ......................... 19
       3.1.2      Desire to emerge as a global superpower drives China‟s defense expenditure ..................................... 21
       3.1.3      Chinese defense expenditure driven by economic growth .................................................................... 22
    3.2 Analysis of Defense Budget Allocation ............................................................................................24
       3.2.1      Capital expenditure allocation expected to remain at an average of 38% during the forecast period ..... 24
       3.2.2      China will spend US$269.8 billion over the forecast period on military hardware .................................. 26
    3.3 Homeland Security Market Size and Forecast .................................................................................28
       3.3.1      Chinese homeland security market worth US$95 billion in 2011 ........................................................... 28
       3.3.2      Political instability will drive the Chinese homeland security spending .................................................. 29
       3.3.3      China falls under “low risk” of terrorism category .................................................................................. 30
       3.3.4      China faces minimal terrorist threat ...................................................................................................... 31
    3.4 Benchmarking with Key Global Markets ..........................................................................................32
       3.4.1 China‟s defense budget expected to grow at a CAGR of 9.90%, making it the second-fastest-growing
       defense budget among the large defense spenders globally ............................................................................ 32
       3.4.2      The China has the second-largest defense budget in the world ............................................................ 34
       3.4.3      China allocates a lower share of GDP for defense compared to US and other European countries....... 35
       3.4.4      China faces minimal threat from foreign terrorist organizations ............................................................. 36
    3.5 Market Opportunities: Key Trends and Drivers ................................................................................38
       3.5.1      Demand for missiles expected to increase ........................................................................................... 38
       3.5.2      Increased demand for helicopters and aircraft ...................................................................................... 38
       3.5.3      Naval modernization to drive the demand for maritime weaponry ......................................................... 38
       3.5.4      China plans to upgrade its command, control and intelligence capabilities............................................ 39
       3.5.5      Modernization of existing defense equipment will create demand for personnel training ....................... 39


The Chinese Defense Industry – Market Opportunities and Entry Strategies, Analyses and Forecasts to 2016                                                        Page 2

© ICD Research. This product is licensed and is not to be photocopied                                                                    Published: November 2011
TABLE OF CONTENTS



       3.5.6      Authoritarian regime will drive the surveillance technology market in China .......................................... 39
       3.5.7      Transformation of defense companies into an industrial base dependent on foreign technology ........... 40
4      Defense Procurement Market Dynamics ........................................................................... 41
    4.1 Import Market Dynamics .................................................................................................................41
       4.1.1 China acquires civilian technologies from foreign OEMs which could be used to improve its defense
       systems ........................................................................................................................................................... 41
       4.1.2      Russia dominates Chinese arms market .............................................................................................. 42
    4.2 Export Market Dynamics .................................................................................................................43
       4.2.1      Chinese arms sales continue to rise..................................................................................................... 43
       4.2.2      China strengthens its hold in emerging markets by offering low-cost defense equipment ...................... 44
5      Industry Dynamics .............................................................................................................. 45
    5.1 Five Forces Anlysis .........................................................................................................................45
       5.1.1      Bargaining power of supplier: low to high ............................................................................................. 46
       5.1.2      Bargaining power of buyer: medium to high ......................................................................................... 46
       5.1.3      Barrier to entry: high ............................................................................................................................ 46
       5.1.4      Intensity of rivalry: low ...............................
				
DOCUMENT INFO
Description: • Top level overview of the Chinese defense industry • A breakdown of the Chinese defense industry by spend pattern valued from 2005 through 2010 and forecasted from 2011 through 2016 • A breakdown of the markets by segment valued from 2005 through 2010 and forecasted from 2011 through 2016 • Details of top companies active across the Chinese defense industry • Emerging trends and opportunities in the Chinese defense industry in the last 12 months
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