A dramatic surge in Chinese defense stocks has been reported after Islamabad reportedly used Chinese-made weaponry in a clash with Indian forces.
Pakistan’s Foreign Minister Ishaq Dar said Wednesday that the country deployed Chinese-made J-10C fighter jets during a confrontation with India’s air force, according to local state media reports.
The aircraft in question are manufactured by China’s state-owned AVIC through its subsidiary AVIC Chengdu Aircraft. Another AVIC unit, AVIC Aerospace — which specializes in military aircraft and helicopters — also gained from the news, with its Hong Kong-listed shares jumping more than 6%.
AVIC Chengdu Aircraft’s Shenzhen-listed shares surged as much as 16%, and were still up 8.31% by 11:40 a.m. local time. On Wednesday, the stock gained 17.05%, marking its biggest single-day rise since October. Shares of China State Shipbuilding Corporation also rose 0.4%.
“Pakistan is the largest buyer of Chinese arms, including fighter jets, air defense systems, naval vessels, and UAVs,” said Yang Zi, associate research fellow at the S. Rajaratnam School of International Studies, said according to CNBC.
Data from the Stockholm International Peace Research Institute (SIPRI) shows that more than 60% of China’s arms exports between 2020 and 2024 went to Pakistan.
“It’s certainly likely that Pakistan used Chinese aircraft,” added Seth Jones, president of the defense and security department at the Center for Strategic and International Studies (CSIS).
Yang noted to CNBC that “the conflict serves as a positive testament to the quality of Chinese-made arms, given the performance of Pakistan’s fighter jets and air defense systems against India’s French- and Soviet-made aircraft.”
He also said that while it remains unclear whether the weapons were used in air-to-air combat or surface-to-air missile strikes, Pakistan clearly demonstrated “some successful capabilities, with Chinese support.”
According to Pakistan’s Information Minister Attaullah Tarar, five Indian Air Force jets were shot down while nearing Pakistani airspace. India swiftly dismissed those claims, calling them “dis-information.”
India announced early Wednesday that its forces had conducted air strikes in Pakistan and the region it calls Pakistan-occupied Jammu and Kashmir. India’s Ministry of Defense said the strikes targeted nine locations believed to be sites where “terrorist attacks” against India were being planned and directed. This comes after a militant attack in Pahalgam, Jammu and Kashmir, last month that killed 26 people.
China has been Pakistan’s most critical defense partner since the end of the Cold War, and the two nations established diplomatic ties back in 1951.
