Chinese defense companies soar as Pakistan touts arms purchase

Economic Times

14 hours ago

Shares of Chinese defense companies rallied Monday, after Pakistan said it intends to buy one of the Asian power's most-advanced fighter jets as a part of major arms purchase.
ADVERTISEMENT Shares of AVIC Shenyang Aircraft Company — the maker of China's J-35 stealth fighter jet, which is the centerpiece of the package — soared by their 10% daily limit in Shanghai, extending gains for the third consecutive session. The stock led a rally across other defense names such as Aerospace Nanhu Electronic Information Technology Co., whose shares jumped as much as 15%.
The government of Pakistan said in a social media post on Friday that it would acquire 40 J-35 fifth-generation fighter jets, KJ-500 airborne early warning and control aircraft, as well as HQ-19 ballistic missile defense systems. China's Ministry of Defense didn't respond to a request for comment.
Shares of Chinese arms makers have been on the rise since Pakistan last month claimed that Chinese J-10Cs helped to shoot down six Indian fighters, including French-made Rafale aircraft. India has downplayed Pakistan's claims about the effectiveness of weaponry deployed from China and other countries, saying that the Indian military was able to conduct precision airstrikes deep in Pakistani territory. The J-35 sale to Pakistan would mark China's first export of the fifth-generation jet, which has advanced stealth capabilities for penetrating the airspace of an adversary. The fighter was developed by Shenyang Aircraft Corporation and publicly unveiled at the 2024 Zhuhai Airshow.
ADVERTISEMENT The KJ-500 aircraft would improve Pakistan's radar coverage and its smaller size allows for nimbler use in regional clashes. The HQ-19 surface-to-air missile systems would enhance the country's ability to intercept ballistic missiles. The deal comes amid persisting tensions between Pakistan and India. The nuclear-armed neighbors clashed several weeks ago, with both sides trading air, drone and missile strikes, as well as artillery and small arms fire along their shared border in early May.
ADVERTISEMENT In a May 31 interview, Anil Chauhan, chief of defense staff of the Indian Armed Forces, confirmed that India lost an unspecified number of fighter jets in the clashes with Pakistan, without offering specific details. In a sign of how the conflict is changing dynamics, Indonesia — which has relied on aircraft from makers in the US, Russia and elsewhere — is mulling China's offer of J-10 jets. Southeast Asia's largest economy has bought munitions and air surveillance systems from China in the past, but not jet fighters.
ADVERTISEMENT Despite corruption scandals, the Chinese defense-industrial complex has made progress. Beijing shocked the world in December with the launch of its first next-generation amphibious assault ships, considered the world's largest of its kind.
A video of what is believed to be a test flight of the nation's sixth-generation fighter jet circulated on social media last year, leading to a rally in defense stocks.
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