A Bloomberg analysis published Tuesday, May 12, 2026, identified 81 publicly listed Chinese companies that disclosed manufacturing missile components in 2025, more than double the number that did so during Xi Jinping’s first year as CCP general secretary in 2013. Bloomberg called the buildup Beijing’s largest since Xi took power. The same day, Pentagon officials defended a $1.5 trillion fiscal year 2027 budget request before House and Senate appropriations subcommittees, framing the budget as a direct response to the Chinese military expansion.
Bloomberg reviewed the corporate filings of every publicly listed Chinese company that had referenced either of China’s two state-owned missile manufacturers, China Aerospace Science and Industry Corporation (CASIC) or China Aerospace Science and Technology Corporation (CASC), at least once a year between 2013 and 2025. The number of listed Chinese firms disclosing missile-component production rose from 32 in 2013 to 81 in 2025. Among the 81 firms, 22 produce components for both cruise and ballistic missiles, while 15 focus specifically on cruise missiles.
In 2025, nearly 40 percent of the 81 companies posted their highest annual revenues at any point during Xi’s tenure. Their combined 2025 sales reached 189 billion yuan (approximately $28 billion), an annual increase of about 20 percent. China’s 300 largest publicly listed companies posted aggregate revenue declines over the same period.
First-quarter 2026 data for missile-supply-chain firms shows total revenues up roughly 20 percent year-over-year, while the country’s 300 largest listed companies posted only 2.4 percent growth over the same period.
The four firms with the largest 2025 revenue increases participating in the missile program are not state-owned, but three of the four have direct government backing. Bloomberg worked with Michael Duitsman, a research associate at the Middlebury Institute of International Studies, to identify which components produced by the 81 firms specifically feed into cruise and ballistic missile systems.
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Bloomberg highlighted several specific firms in the supply chain. Wuhan Guide Infrared Co., a producer of infrared sensors used in cruise missiles and drones, saw its 2025 revenue rise 73 percent. Yangtze Optical Fibre and Cable Co., which supplies fiber-optic coils to CASIC, posted 20 percent revenue growth in 2025. Chengdu Jiaqi Electronic Technology Co., a maker of stealth coatings used in missile production, also posted strong 2025 growth.
The Pentagon estimates that as of 2024, China possesses at least 3,150 ballistic missiles and 300 ground-launched cruise missiles, increases of 147 percent and 50 percent respectively from 2015 levels.
Analysts told Bloomberg the Chinese missile stockpile is now substantial in a way that contrasts directly with the depletion U.S. munitions stockpiles have experienced since Operation Epic Fury, the U.S.-Israeli campaign against Iran that began on Feb. 28, 2026. Taiwan and other regional allies have raised the concern with Washington.
The U.S. government has placed dozens of Chinese companies on military-linked entity lists and has restricted Beijing’s access to advanced semiconductors used in missile guidance systems.
Secretary of War Pete Hegseth and Joint Chiefs Chairman Gen. Dan Caine appeared on May 12, 2026, before House and Senate Appropriations defense subcommittees to defend the Pentagon’s fiscal year 2027 budget request of $1.5 trillion. The request would represent a roughly 42 to 44 percent increase over current defense spending and the largest single budget request in Pentagon history.
Hegseth told lawmakers the proposed budget “reflects the urgency of the moment” and would address both “the deferment of long-standing problems” and the need to “position our forces for the current and future fight.” The Pentagon’s stated objectives for the budget include filling critical capability gaps, rebuilding U.S. air, land, sea, space, and cyber industrial bases, expanding weapons supplier diversity, and strengthening the deterrence, readiness, and response capabilities required for the U.S. military to counter Chinese forces in the Indo-Pacific.
Tom Cole, chairman of the full House Appropriations Committee, told the panel that “China is modernizing its military at a pace and scale that is alarming.”
Caine, responding to questioning from Republican Rep. Hal Rogers of Kentucky, told the House subcommittee that the Pentagon wants “a range and mix of capabilities that create outsized dilemmas for Xi Jinping and others that are out there, to ensure that we maintain and sustain deterrence.” He added that the Pentagon’s “primary focus” is to ensure that the president and the Secretary of War can always consider “a range of military options across the world.” Caine made the statement hours before President Trump departed for his summit with Xi in Beijing.
Rogers, while supporting the increased weapons-manufacturing investment, warned the committee: “We are racing against the speed at which China is rapidly expanding its military.”
Iran war costs climb to $29 billion
The hearings also produced an updated cost figure for the U.S.-Iran war. Acting Pentagon Comptroller Jay Hurst told the subcommittees the war’s cost has now climbed to roughly $29 billion, up from the $25 billion figure Hegseth had previously cited two weeks earlier. The increase, Hurst said, reflects the cost of equipment repair and replacement and the operational expense of sustaining U.S. forces in the Middle East. Some U.S. officials familiar with internal assessments told CBS News the eventual total could approach $50 billion.
Hegseth also testified that the U.S. Navy’s mine-clearing and merchant-shipping escort operation in the Strait of Hormuz, designated Project Freedom and paused on May 5, “could always recommence should the commander in chief want us to.”
U.S. munitions stockpiles depleted by the Iran campaign now coincide with a Chinese missile production base expanding at record pace and proving more resistant to sanctions than analysts had previously assessed. The Pentagon’s $1.5 trillion request is structured as a race to rebuild U.S. defense industrial capacity faster than Beijing can expand its own.
Sen. Chris Murphy, a Democrat on the Senate Appropriations subcommittee, characterized the proposed 45 percent increase as “a negotiating tactic.” House subcommittee chair Ken Calvert, a California Republican, told the panel that “questions persist about whether we are building the depth and reliance required for a high-end conflict.”
