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ARMS INDUSTRY IN CHINA IS MAKING GLOBAL INROADS

BEIJING - In a sweeping change, Chinese companies have moved from mainly being known as suppliers of small arms on the global market to sellers of major weapons systems. From drones to frigates to fighter jets, the state-owned companies are aggressively pushing foreign sales of high-tech hardware to other nations, mostly in the developing world.

Russian companies are feeling the greatest pressure, but U.S. and other Western companies are also increasingly running into the Chinese.

"China will be competing with us in many, many domains, and in the high end," said Marwan Lahoud, the head of strategy and marketing at European Aeronautic Defence & Space, Europe's largest aerospace company. "Out of 100 campaigns, that is, the commercial prospects we have, we may have the Chinese in front of us among the competitors in about three or four. They have the full range of capabilities and they are offering them."

The Stockholm institute released a report this year on global weapons transfers that found the volume of Chinese conventional weapons exports - which included high-end aircraft, missiles, ships and artillery - jumped by 162 percent from 2008 to 2012, compared with the previous five years. Pakistan is the leading customer.

The institute now estimates that China is the fifth-largest arms exporter in the world, ahead of Britain. From 2003 to 2007, China ranked eighth.

China's foreign arms sales are also rising fast in dollar terms. According to IHS Jane's, an industry consulting and analysis company, Chinese exports have nearly doubled during the past five years to $2.2 billion, surpassing Canada and Sweden, and making China the world's eighth-largest exporter by value.

The total global arms trade revenue in 2012 was estimated to be $73.5 billion, and the United States had a 39 percent share, according to IHS Jane's.

Xu Guangyu, a retired major general in the People's Liberation Army and director of the China Arms Control and Disarmament Association, said in an interview that the push by Chinese companies to develop and sell higher-tech arms was "a very normal phenomenon."

"In arms manufacturing, China is trying to increase quality and reduce price," he said.

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