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Is China's warning invalid? The United States Lockheed Martin and Raytheon did not pay hundreds of billions in fines on the last day

author:Kline Finance

On February 16, China announced that it had placed U.S. arms giants Lockheed Martin and Raytheon on the list of unreliable entities.

And double the fine for arms sales to Taiwan, which must be paid within 15 days. Otherwise, they will be fined and other measures will be increased in accordance with the law.

Is China's warning invalid? The United States Lockheed Martin and Raytheon did not pay hundreds of billions in fines on the last day

It is reported that because the two companies sold 49.5 billion yuan of arms, they have to pay 90 billion yuan, or about 15 billion US dollars, in this fine.

However, after the Chinese warning, the two US arms giants did not start preparing and imposing fines, but continued to go their own way and did not pay on the last day.

A world-famous arms giant

The United States is the most powerful country in the world.

To maintain this strength, the United States needs to always maintain a priority in force.

Lockheed Martin and Raytheon are the underpinning forces behind the U.S. priority in terms of force.

Lockheed Martin

Lockheed Martin's predecessor was Lockheed Corporation, founded in 1912, an American aerospace manufacturer.

The company merged with Martin Marietta in 1995 and changed its name to Lockheed Martin. The headquarters is located in Bethesda, Montgomery County, Maryland.

Founded in 1912, Lockheed Martin is now the largest arms company in the United States.

Is China's warning invalid? The United States Lockheed Martin and Raytheon did not pay hundreds of billions in fines on the last day

Aircraft produced by Lockheed Martin

And the company has sold up to $60 billion in arms worldwide every year since entering 2020, making it one of the world's largest arms sellers.

In terms of market capitalization, Lockheed Martin is also very stable, staying at about $100 billion all year round.

Some people may think that this market value is not high, after all, it seems that Apple is not as powerful as Lockheed Martin, and has a market value of $2 trillion.

But know that the products produced by Apple cannot be compared with those produced by Lockheed Martin.

After all, Apple makes mobile phones and some wearable devices, while Lockheed Martin makes F35 and F22.

Raytheon

The Raytheon Company is a large U.S. defense contractor headquartered in Waltham, Massachusetts.

The world-famous Raytheon employs 73,000 people worldwide and has a turnover of $67 billion.

Is China's warning invalid? The United States Lockheed Martin and Raytheon did not pay hundreds of billions in fines on the last day

In the past, Raytheon's revenue came mainly from defense contracts, but due to the development of the commercial aerospace business in recent years, its main revenue business has changed.

Today, Raytheon's share of commercial aviation business has reached 40%, surpassing the military industry.

Of Raytheon's $67 billion in revenue, $41.1 billion came from the United States, $11.1 billion from Europe, and $8 billion from the Asia-Pacific region, with less revenue in all but three major regions.

Is China's warning invalid? The United States Lockheed Martin and Raytheon did not pay hundreds of billions in fines on the last day

At the same time, Raytheon in the United States, like most arms companies in the United States, has shown a rising revenue in recent years.

It is expected that Lockheed Martin and Raytheon do not pay fines, there is no need to rush

The annual profit of Lockheed Martin in the United States is 50~6 billion US dollars, while the profit of Raytheon Technologies is between 30~5 billion US dollars a year.

Even if these two arms companies hand over all the profits of the past 2022, they will not be enough to pay such a high fine.

Moreover, these two companies belong to arms companies, and the background relationship is not comparable to that of ordinary companies.

In the beginning, Lockheed Martin and Raytheon were not expected to honestly pay the fine, and of course it would be better if the two companies did.

Is China's warning invalid? The United States Lockheed Martin and Raytheon did not pay hundreds of billions in fines on the last day

But even if the two companies do not pay the fine, netizens do not have to worry.

Because at the beginning, the issue of fines was not put too much emphasized.

In the announcement, the five articles directly placed in the announcement for the two companies to pay fines are directly placed in the announcement, although the position does not necessarily represent the degree of importance, but it also reflects this to a certain extent.

Lockheed Martin and Raytheon are currently complying with the announcements and paying fines, but this behavior also gives China a good reason.

With this reason in mind, China can logically enforce the first four prohibitions in the proclamation.

First, neither of these two companies nor their subsidiaries are allowed to engage in import and export business in China.

Second, the two companies are prohibited from making new investments and business expansion in China.

Third, the executives of the two companies are prohibited from entering the mainland, even if they are transferred.

Fourth, executives of the two companies are prohibited from staying or residing in China.

One could argue that neither company has a very large arms trade with the mainland.

Is China's warning invalid? The United States Lockheed Martin and Raytheon did not pay hundreds of billions in fines on the last day

However, it should be known that the radiation scope of China's economy is constantly expanding with the increase of the mainland's comprehensive national strength.

Once the mainland bans their cooperation with the Chinese market, this will still have some impact on its subsequent business development.

All in all, Lockheed Martin and Raytheon still cause losses even if they don't pay the fine.

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