China raised its missile production to a historic level in 2025, according to a Bloomberg financial survey. Relying on a network of private civilian and military suppliers, Xi Jinping wants to modernize his army as it approaches its centenary, in 2027. And protect Taiwan in the face of unpredictable American power.
Winter 1979. This year, China enters into conflict with Vietnam. After a month of clashes, Chinese troops withdraw. They have not been engaged in any war since that date. However, the Middle Kingdom has continued to strengthen its military arsenal.
Beijing’s industrial defense apparatus would even have, according to a financial map produced by Bloomberg, reached in 2025 a peak of activity without precedent since Xi Jinping’s accession to power in 2013. By examining the annual reports of 81 listed companies supplying essential components of missiles to the two state giants, CASIC (China Aerospace Science and Industry Corporation) and China Aerospace Science and Technology Corporation (CASC), the study shows that the number of companies involved in the supply chain has more than doubled in a decade.
This rise in power is reflected in exceptional financial results which contrast with the relative gloom of the rest of the Chinese economy. In 2025, the cumulative turnover of these suppliers jumped by 20% to reach 189 billion yuan, or around 24 billion euros, according to American media. Nearly 40% of these companies have recorded the best sales since 2013, a performance all the more notable given that, over the same period, the 300 largest stock market capitalizations in the country showed significantly more modest growth.
When medical companies convert to arms
One of the keys to this acceleration lies in the growing integration of private technology companies within the military-industrial complex. Pilots of the Chinese missile program, CASIC and CASC receive orders from the military, and redistribute them to a network of smaller suppliers.
A company like Wuhan Guide Infrared, originally specializing in thermal sensors for health, now derives more than 70% of its revenues from the defense sector. Its conversion to infrared guidance systems essential for cruise missiles and drones even earned it the sanction of one of its subsidiaries by the United States and the European Union, reports the media. Which did not prevent its turnover from jumping 73% last year.
Other niche players are also seeing their order books explode. Chengdu Jiachi Electronic, a leader in stealth coatings intended to make missiles and planes invisible to radar, saw its revenues increase by 16% in one year. Similarly, Yangtze Optical Electronic, which supplies fiber optic spools for ballistic missile precision navigation systems, now does 70 percent of its business with the military, and its sales increased 20 percent last year.
A message to the Americans
This production frenzy meets an objective which is to saturate opposing defenses in the event of conflict in the Indo-Pacific. According to the Pentagon, the Chinese arsenal already had more than 3,150 ballistic missiles in 2024, a dizzying increase of 147% compared to 2015. Beijing now has weapons capable of hitting almost any point on the globe, like the DF-41 intercontinental missile or the “Guam Express” (DF-26), designed specifically to reach American bases in the Pacific.
“Recent events have probably accentuated the perceived need to defend and deter any potential US military or political action against Taiwan,” John Van Oudenaren told Bloomberg.
This analyst at BluePath Labs is a specialist on Chinese state-owned missile giants. Capture of Nicolás Maduro, attack on Iran… Political decision-makers in Beijing “clearly feel the need to react”
While American munitions stocks are being put to the test by tensions in the Middle East, Beijing is taking advantage of its massive manufacturing capacity to gain the upper hand. For the centenary of the People’s Liberation Army in 2027, Xi Jinping wants to provide China with a modern army capable of discouraging any American intervention concerning Taiwan.
Despite the corruption investigations which have recently targeted several senior officials and scientists in the sector, the dynamic does not seem to be running out of steam. Data from the first quarter of 2026 confirms the trend with a further increase in revenues of 20% for missile suppliers.
