Capital markets have funded wars for centuries. Now the People’s Liberation Army is turning to the stock market to help propel China’s naval expansion plans.
China’s military spend, at $166bn last year, is second only to the US, and the country has been flexing its naval prowess amid territorial disputes in the South China Sea and other surrounding waters. But with its largest defence contractors still largely state-owned, Beijing wants to push them on to public markets to foster their growth.
Launching what it described as a push to use capital markets to fund China’s defence industry, state-controlled China Shipbuilding Industry Co, the country’s biggest shipbuilder, said it would raise Rmb8.5bn ($1.4bn) through a private placement to buy production facilities and equipment to make warships.
