CITIC Construction Investment: China's military industrial sector has evolved from its past reliance on a single domestic demand model to a new development pattern driven by three forces.

CITIC Construction Investment's research report believes that China's military industry has evolved from the past reliance on a single domestic demand model to a new development pattern driven by three forces, resulting in more diversified and sustainable growth momentum. The domestic demand as the foundation, expansion of foreign trade, and civilian sectors giving back pattern is profoundly reshaping the appearance and boundaries of China's military industry. The industry is shifting from cyclical growth to comprehensive growth. The first curve of domestic military demand: Focused on preparing for war and modernizing equipment, demand is driven by steady growth in defense budgets and upgrades of equipment. Strong deterrence through high-precision technology combined with systematic and low-cost unmanned systems is the primary growth direction. The second curve of military trade going overseas: Leveraging cost-performance advantages, systematic operational capabilities, and geopolitical strategic cooperation, China's military trade share continues to rise, making it an important global supplier and achieving a win-win for strategic influence and economic benefits. The third curve is the civilian application of military technology: Cutting-edge military technologies are spilling over into the civilian sector, giving rise to new trillion-level industries such as commercial aerospace, low-altitude economy, future energy, deep-sea technology, and large aircraft, which stimulate the development of new processes, new materials, and new components, forming a virtuous cycle of "military technology for civilian use, giving back to military industry."