April 15, 2013:
In the last three months there have been numerous photos of rebel forces in Burma and Syria using Chinese M99 12.7mm sniper rifles. China denied supplying either the Burmese tribal militia (the UWSA or United Wa State Army), operating near its border, or the Syrian rebels (nowhere near the Chinese border). That denial doesn’t mean much because Chinese arms dealers have long felt free to deal with the Burmese rebels and anyone else willing to pay cash. That’s apparently how the M99s got to Burma and Syria (and several other places were the users avoided having the pictures taken).
The Chinese Army has only recently begun receiving these weapons. Large caliber sniper rifles were first developed by Chinese manufacturers in 1999, when the M99 showed up. A few years later the M06 (an M99 with a few minor changes) appeared. A decade later another version, the QUB09, came along. All three of these are bullpup (magazine behind the trigger) designs and are built by a state owned weapons factory.
There are many other 12.7mm rifles available from Chinese suppliers. For example, the AMR-2 is a more conversional design (magazine in front of the trigger). The M99/M06/QUB09 all weigh about 12 kg (26.4 pounds), while the AMR-2 is a little lighter at 11 kg (24.2 pounds). The M99 series can use 12.7x108mm or 12.7x99mm rounds, while the AMR-2 only handles the 12.7x108mm cartridge.
The Chinese consider all of these models to be anti-vehicle/material rifles. Sniping against people is a secondary mission, and the Chinese rifles are not as accurate at longer ranges (over 1,000 meters) as similar Western models. Most of these rifles are sold to foreign customers (military, police, private individuals, and anyone with enough cash and a good excuse or convincing forged documents).
It's only recently that China has begun delivering large numbers of 12.7mm rifles to its own troops. The problem is that there are a lot of options in this area. And in the last decade there has been a lot of development action in large caliber sniper rifles. This may be one reason why the Chinese Army has not invested heavily in this weapon.
For example, after the Barrett company introduced the first .50 caliber (12.7mm) sniper rifle in the 1980s, there were a number of similar weapons and a lot of special ammo developed by other firms. In the last decade it finally became clear what worked (the original Barrett design) and what didn’t (most of the later attempts to improve on the original idea). It has also been found that smaller bullets (like the popular 8.6mm) give about the same range as the 12.7mm for sniping, while using a smaller and lighter rifle. Thus it appears that the Chinese waited for development activity to settle down before investing a lot of money in this type of weapon.
Meanwhile, export customers, like the Burmese and Syrian rebels, are eager to take the M99 and use it to block army traffic on the roads that government troops use for supplies and reinforcements.