The same Sino-American tensions that are boosting Chinese armsmakers may also end up undermining them
Jianghang is just one of dozens of military-linked companies on a high. Most are not publicly traded and disclose little financial information. State-owned builders of navy vessels have flotillas of listed subsidiaries., the main group behind China’s fighter-jet programme with more than 1trn yuan in total assets, has 24 publicly traded divisions. To get a sense of the industry analysts track dozens of small military stocks. Citic Securities, an investment bank, covers 58.
The main reason for this armsmaking bonanza is China’s increasingly chilly relationship with America. One note to investors from Huaxi Securities, a broker, was embellished with an image of two fists, draped in opposing American and Chinese flags, flying towards each other. America’s attempts to “lock China out of technological advancement”, Huaxi analysts say, is spurring new growth.
Ironic, then, that the same Sino-American tensions that are boosting Chinese armsmakers may end up undermining this strategy. The idea of civilian-military fusion spooked Donald Trump’s administration and prompted it to bar American firms from supplying companies like Huawei, a giant maker of telecoms gear that is perceived as being close to the People’s Liberation Army . The result has been disastrous for Huawei. Its revenues fell for the second consecutive quarter earlier this year.
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