Shares in Chinese weapons companies rose following this week’s escalation of conflict between India and Pakistan. Pakistan said it shot down five Indian aircraft, including a French-made Rafale jet. Despite Indian denials, the reports fueled attention to reports that Pakistan has sourced about 82% of its weapons from China.
A Chinese defense share index rose by 1.6% to a two-week high. The charge was led by Avic Chengdu Aircraft Co., the manufacturer of the J-10C fighter jet used by the Pakistani forces. How many Chinese weapons were deployed remains unknown, but Indian authorities said they recovered debris of Chinese-made PL-15 air-to-air missiles in Punjab after the conflict.
WHY IS THIS IMPORTANT? Industry observers see this week’s conflict as the first battle test of Chinese weapons. This will likely make them more attractive to buyers around the world.
