China’s defence stocks jump after Pakistan confirms fighter jet deal

On June 9, shares in Chinese defence firms soared after Pakistan announced plans to acquire one of China’s most advanced fighter jets as part of a significant arms procurement.

AVIC Shenyang Aircraft Company, the manufacturer of the J-35 stealth fighter, saw its stock jump by the 10% daily limit in Shanghai, extending a three-day rally, Caliber.Az reports per foreign media.

The gains were mirrored across the sector, with Aerospace Nanhu Electronic Information Technology Co. rising as much as 15%.

In a statement posted on social media on June 6, Pakistan’s government confirmed it would purchase 40 J-35 fifth-generation fighter aircraft, KJ-500 airborne early warning and control planes, and HQ-19 missile defence systems from China. The Chinese Ministry of Defence has not yet responded to requests for comment.

The announcement comes amid heightened military tensions between Pakistan and India, which have seen a recent escalation in cross-border hostilities. In early May, both sides exchanged airstrikes, drone attacks, artillery fire and small arms engagements along their disputed frontier.

Pakistan's latest arms deal follows claims made last month that Chinese-made J-10C jets had helped its forces down six Indian warplanes, including French-built Rafale fighters. India has played down the effectiveness of Chinese weapons, stating that its military had conducted precision strikes deep inside Pakistani territory.

If completed, the J-35 sale would represent China’s first export of the fifth-generation stealth fighter. Developed by Shenyang Aircraft Corporation and showcased at the 2024 Zhuhai Airshow, the aircraft is designed to penetrate contested airspace and evade enemy radar.

The KJ-500, a more compact early warning aircraft, is expected to enhance Pakistan’s regional surveillance capabilities, while the HQ-19 missile system would improve its ability to intercept ballistic threats.

India’s Chief of Defence Staff, General Anil Chauhan, acknowledged on 31 May that the country had lost an unspecified number of fighter jets during recent clashes, though he declined to provide further details.

The deal reflects shifting defence dynamics across Asia. Indonesia, which has traditionally relied on arms suppliers from the US and Russia, is reportedly considering a Chinese offer of J-10 fighter jets. While Jakarta has previously sourced munitions and surveillance equipment from China, it has yet to purchase combat aircraft.

Despite concerns over corruption, China’s defence industry continues to make technological strides. In December, Beijing unveiled its first next-generation amphibious assault ships, described as the largest of their kind globally.

A video purportedly showing a test flight of China’s sixth-generation fighter jet also surfaced online last year, triggering a surge in defence-related stocks.

By Aghakazim Guliyev