Reforming China’s defense industry

ABSTRACT

Even with sizable economic inputs, access to foreign technologies, and considerable political will, China, up until the late 1990s, experienced only limited success when it came to the local design, development, and manufacture of advanced conventional weapons. Not surprisingly, therefore, reforming the local defense industry in order to upgrade its technology base and manufacturing capabilities and to make armaments production more efficient and cost-effective has long preoccupied the Chinese leadership. The fact that most of these efforts had little positive impact on the country’s military technological and industrial capabilities only encouraged Beijing to experiment with additional reforms in the hopes of finally getting it right.

KEYWORDS:

• Chinese defense reforms
• China’s military-industrial complex
• China’s defense industrial base reforms

View correction statement:

Corrigendum

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

¹ The Chinese defense industry has been the object of considerable study in recent years. See, for example, Richard A. Bitzinger, Michael Raska, Collin Koh Swee Lean, and Kelvin Wong Ka Neng, ‘Locating China’s Place in the Global Defense Economy’, in Tai Ming Cheung (ed.), Forging China’s Military Might: A New Framework for Assessing Innovation (Baltimore: Johns Hopkins University Press 2014); Mikhail Barabanov, Vasiliy Kashin, and Konstantin Makienko, Shooting Star: China’s Military Machine in the 21^st Century (Minneapolis: East View Press 2012); Tai Ming Cheung, ‘The Chinese Defense Economy’s Long March from Imitation to Innovation’, Journal of Strategic Studies 34/3 (June 2011); James Mulvenon and Rebecca Samm Tyroler-Cooper, ‘China’s Defense Industry on the Path of Reform’, Prepared for the US-China Economic and Security Review Commission, Oct. 2009; Tai Ming Cheung, ‘Dragon on the Horizon: China’s Defense Industrial Renaissance’, Journal of Strategic Studies 32/1 (Feb. 2009); Tai Ming Cheung, Fortifying China: The Struggle to Build a Modern Defense Economy (Ithaca, NY: Cornell University Press 2008); Richard A. Bitzinger, ‘Reforming China’s Defense Industry: Progress in Spite of Itself?’ Korean Journal of Defense Analysis (Fall 2007); Evan S. Medeiros, Roger Cliff, Keith Crane, and James C. Mulvenon, A New Direction for China’s Defense Industry (Santa Monica, CA: RAND 2005); Keith Crane, Roger Cliff, Evan S. Medeiros, James C. Mulvenon, and William H. Overholt, Modernizing China’s Military (Santa Monica, CA: RAND 2005); Evan S. Medeiros, Analyzing China’s Defense Industries and the Implications for Chinese Military Modernization (Santa Monica, CA: RAND February 2004); David Shambaugh, Modernizing China’s Military: Progress, Problems, and Prospects (Berkeley: University of California Press 2002), 225–283; John Frankenstein, ‘China’s Defense Industries: A New Course?’ in James C. Mulvenon and Richard H. Yang (eds.), The People’s Liberation Army in the Information Age (Santa Monica, CA: RAND 1999); Richard A. Bitzinger, ‘Going Places or Running in Place? China’s Efforts to Leverage Advanced Technologies for Military Use’, in Susan Puska (ed.), The PLA After Next (Carlisle Barracks: SSI Press 2000); John Frankenstein and Bates Gill, ‘Current and Future Challenges Facing Chinese Defense Industries’, China Quarterly (June 1996).

² Cheung, ‘The Chinese Defense Economy’s Long March’, 326.

³ Bates Gill and Taeho Kim, China’s Arms Acquisitions from Abroad: A Quest for ‘Superb and Secret Weapons’ (Stockholm: Stockholm International Peace Research Institute 1995), 2–3, 8–18.

⁴ Frankenstein, ‘China’s Defense Industries: A New Course?’ 190.

⁵ Ibid., 191–2.

⁶ Medeiros et al., A New Direction for China’s Defense Industry, 4–18.

⁷ Ibid., 161–2; Shambaugh, Modernizing China’s Military, 261–2.

⁸ Medeiros et al., A New Direction for China’s Defense Industry, 170–1.

⁹ Richard F. Grimmett, Conventional Arms Transfers to Developing Nations, 1998–2005 (Washington, DC: U.S. Congressional Research Service 23 Oct. 2006), 56–7.

¹⁰ Frankenstein, ‘China’s Defense Industries: A New Course?’, 198–199.

¹¹ Rao Gangcan, ‘Development and Outlook in Newbuilding Technology in China’, unpublished manuscript, 1998, 17.

¹² Frankenstein, ‘China’s Defense Industries: A New Course?’ 197–9; ‘Industry Embraces Market Forces’, Jane’s Defense Weekly, 16 Dec. 1998, p. 28; Harlan Jencks, ‘COSTIND is Dead, Long Live COSTIND! Restructuring China’s Defense Scientific, Technical, and Industrial Sector’, in James C. Mulvenon and Richard H. Yang (eds.), The People’s Liberation Army in the Information Age (Santa Monica, CA: RAND 1999), 617.

¹³ Tai Ming Cheung, ‘Rejuvenating the Chinese Defense Economy: Present Developments and Future Trends’, Study of Innovation and Technology in China, Policy Brief No. 19, Sept. 2011, p. 31.

¹⁴ Shambaugh, Modernizing China’s Military, 277; Frankenstein and Gill, ‘Current and Future Challenges Facing Chinese Defense Industries’, 403.

¹⁵ Kenneth Allen, ‘PLAAF Modernization: An Assessment’, in James Lilly and Chuck Downs (eds), Crisis in the Taiwan Strait (Washington, DC: NDU Press 1997).

¹⁶ Jonathan Pollack and James Mulvenon, Assembled in China: Sino-U.S. Collaboration and the Chinese Civilian Aviation Industry, ms. (Santa Monica, CA: RAND Aug. 1998), 37, 47–8.

¹⁷ Report of the Select Committee on U.S. National Security and Military/Commercial Concerns with the People’s Republic of China, Part 13 (Washington, DC: U.S. House of Representatives 1999) Internet version <http://www.house.gov/coxreport/>.

¹⁸ Mark Stokes, China’s Strategic Modernization: Implications for the United States (Carlisle, PA: Strategic Studies Institute, U.S. Army War College Sep. 1999).

¹⁹ Dean Cheng, ‘Civil-Military Integration in the Chinese Aircraft Industry, ms’, unpublished manuscript, ms., Apr. 1999, 6.

²⁰ Cheng, Civil-Military Integration in the Chinese Aircraft Industry, 6.

²¹ Allen, ‘PLAAF Modernization: An Assessment’, 235.

²² Pollack and Mulvenon, Assembled in China, . 37, 47–8.

²³ Yuko Arayama and Panos Mourdoukoutas, China Against Herself: Innovation or Imitation in Global Business? (Westport, CT: Quorum 1999), 69–82.

²⁴ Ibid.

²⁵ Pollack and Mulvenon, Assembled in China, 45–6.

²⁶ Ibid., 19.

²⁷ Quoted in Larry M. Wortzel, China’s Military Potential (Carlisle, PA: U.S. Army War College Oct. 1998), 20.

²⁸ See State Council Information Office, ‘Chapter 3: Revolution in Military Affairs with Chinese Characteristics’, China’s National Defense in 2004 (Beijing: State Council Information Office 2004) <http://www.fas.org/nuke/guide/china/doctrine/natdef2004.html>.

²⁹ You Ji, ‘China’s Emerging National Strategy’, China Brief, 24 Nov. 2004, <http://www.jamestown.org/programs/chinabrief/single/?tx_ttnews%5Btt_news%5D=27194&tx_ttnews%5BbackPid%5D=194&no_cache=1#.V7Fosz596Tc>.

³⁰ Cheung, ‘Dragon on the Horizon’, 30–1.

³¹ Ibid. See also Richard A. Bitzinger, ‘Modernizing China’s Military, 1997–2012’, China Perspectives, 2011/11 (Nov 2011), 7–8; and Richard A. Bitzinger, ‘China’s “Revolution in Military Affairs”: How Fast? How Furious?’ Stockholm Journal of East Asian Studies (Dec. 2007).

³² Ji, ‘China’s Emerging National Strategy’, <http://www.jamestown.org/programs/chinabrief/single/?tx_ttnews%5Btt_news%5D=27194&tx_ttnews%5BbackPid%5D=194&no_cache=1#.V7Fosz596Tc>.

³³ Keith Crane et al., Modernizing China’s Military, 165.

³⁴ Cheung, ‘Dragon on the Horizon’, 30, 36.

³⁵ Tai Ming Cheung, ‘Innovation in China’s Defense Research, Development, and Acquisition System’, Study of Innovation and Technology in China, Policy Brief No. 20, Sept. 2011, pp. 35–6.

³⁶ Ibid.

³⁷ Cheung, ‘The Chinese Defense Economy’s Long March from Imitation to Innovation’, 348.

³⁸ Cheung, ‘Dragon on the Horizon’, 43–4.

³⁹ Eric Hagt, ‘Emerging Grand Strategy for China’s Defense Industry Reform’, in Roy Kamphausen, David Lai, and Andrew Scobell (eds.), The PLA at Home and Abroad: Assessing the Operational Capabilities of China’s Military (Carlisle, PA: U.S. Army War College July 2010), 481–4; Brian Lafferty, Aaron Shraberg, and Morgan Clemens, ‘China’s Civil-Military Integration’, Study of Innovation and Technology in China (SITC), Research Brief 2013–10, Jan. 2013, p. 58; Mulvenon and Tyroler-Cooper, China’s Defense Industry on the Path of Reform, 57–8.

⁴⁰ Hagt, ‘Emerging Grand Strategy for China’s Defense Industry Reform’, 514–8; Mulvenon and Tyroler-Cooper, China’s Defense Industry on the Path of Reform, 35–7, 38–43; Cheung, ‘Dragon on the Horizon’, 47.

⁴¹ Paul H. Folta, From Swords to Plowshares? Defense Industry Reform in the PRC (Boulder, CO: Westview 1992), 1.

⁴² Mulvenon and Tyroler-Cooper, China’s Defense Industry on the Path of Reform, 5.

⁴³ Hagt, ‘Emerging Grand Strategy for China’s Defense Industry Reform’, 481–4.

⁴⁴ Office of Naval Intelligence, The PLA Navy: New Capabilities and Missions for the 21^st Century (Washington, DC: Office of Naval Intelligence 2015), 18.

⁴⁵ Ronald O’Rourke, ‘PLAN Force Structure: Submarines, Ships, and Aircraft’, in Phillip C. Saunders, Christopher D. Yung, Michael Swaine, and Andrew Nien-Dzu Yang (eds), The Chinese Navy: Expanding Capabilities, Evolving Roles (Washington DC: NDU Press 2011); Sinodefense.com, ‘Type 094 (Jin Class) Nuclear Powered Missile Submarine’, <http://www.sinodefence.com/navy/sub/type094jin.asp>.

⁴⁶ O’Rourke, ‘PLAN Force Structure’; Sinodefense.com, ‘Type 071 Landing Platform Dock’, <http://www.sinodefence.com/navy/amphibious/type071.asp>.

⁴⁷ Wendell Minnick, ‘China Developing Anti-Ship Ballistic Missiles’, Defense News, 14 Jan. 2008, <http://www.defensenews.com/story.php?i=3307277>.

⁴⁸ Tony Capaccio, ‘China Has “Workable” Anti-Ship Missile Design, Pentagon Says’, Bloomberg, 26 Aug. 2011, <http://www.bloomberg.com/news/2011-08-25/china-has-workable-anti-ship-missile-design-pentagon-says.html>. Harry Kazianis, ‘Lifting the Veil on China’s “Carrier-Killer”’, Diplomat, 23 Oct. 2013, <http://thediplomat.com/2013/10/lifting-the-veil-on-chinas-carrier-killer>.

⁴⁹ ‘AMR Regional Air Force Directory 2012’, Asian Military Review, 30 Aug. 2012, <http://www.asianmilitaryreview.com/directories>.

⁵⁰ Lolita C. Baldor, ‘Pentagon Aircraft, Missile Defense Programs said Target of China Cyber Threat’, Washington Post, 29 May 2013.

⁵¹ ‘J-20 vs. F-35, one analyst’s perspective’, Defensetech.org, 31 Dec. 2010, <http://defensetech.org/2010/12/31/j-20-vs-f-35-one-analysts-perspective>.

⁵² Mulvenon and Tyroler-Cooper, China’s Defense Industry on the Path of Reform, 35.

⁵³ U.S. Department of Defense, Annual Report on the Military Power of the People’s Republic of China 2009 (Washington, DC: U.S. Department of Defense 2009), 25–8; You Ji, ‘China’s Emerging National Defense Strategy’, Association for Asian Research, 12 Jan. 2005, <http://asianresearch.org/articles/2428.html>. Wendell Minnick, ‘China Shifts Spending Focus to Info War’, Defense News, 11 Sept. 2006, <http://minnickarticles.blogspot.sg/2009/09/china-shifts-spending-focus-to-info-war.html>; and Bill Gertz, ‘Inside the Ring: China Info Warfare’, Washington Times, 2 June 2010, <http://www.washingtontimes.com/news/2010/jun/2/inside-the-ring-682119128>; Richard Bitzinger, ‘China’s RMA: Good enough?’ International Relations and Security Network, 29 Aug. 2007, <http://www.css.ethz.ch/en/services/digital-library/articles/article.html/53705>.

⁵⁴ Medeiros et al., A New Direction for China’s Defense Industry, 140–52.

⁵⁵ Mulvenon and Tyroler-Cooper, China’s Defense Industry on the Path of Reform, 35–7.

⁵⁶ Cheung, ADD!

⁵⁷ Cheung, ‘Dragon on the Horizon’, 42–3.

⁵⁸ Tai Ming Cheung, ‘The Chinese Defense Economy in the Early 2010s’, Study of Innovation and Technology in China (SITC), Research Brief 2013–1, Jan. 2013, 18; Cheung, ‘Dragon on the Horizon’, 41.

⁵⁹ Stockholm International Peace Research Institute, ‘The SIPRI Arms Transfers Database’, <http://armstrade.sipri.org/armstrade/html/export_values.php>.

⁶⁰ Cheung, Rejuvenating the Chinese Defense Economy, 31.

⁶¹ Barabanov, Kashin, and Makienko, Shooting Star: China’s Military Machine in the 21^st Century, 35–48.

⁶² Barabanov, Kashin, and Makienko, Shooting Star: China’s Military Machine in the 21^st Century, 13–15.

⁶³ China currently has two large commercial airliners in the works, the ARJ-21 regional jet and the C919; however, only companies in AVIC I were chosen to work on these projects. By re-emerging, the authorities hope that subcontracts for these civilian programs can be spread to former AVIC II businesses. See Richard A. Bitzinger, ‘China and Commercial Aircraft Production: Harder than it Looks’, China Brief 13/2 (18 Jan. 2013).

⁶⁴ Cheung, The Chinese Defense Economy in the Early 2010s, 18–9.

⁶⁵ Cheung, ‘The Chinese Defense Economy’s Long March from Imitation to Innovation’, 343–4.

⁶⁶ Lafferty, Shraberg, and Clemens, China’s Civil-Military Integration, 58–60.

⁶⁷ Cheung, The Chinese Defense Economy in the Early 2010s, 20.

⁶⁸ Dune Lawrence, ‘China Plans to Boost 2009 Military Spending by 14.9%’, Bloomberg, 4 Mar. 2009.

⁶⁹ In 2009, for example, France spent approximately US$14 billion on procurement and US$5.8 billion on defense R&D; that same year, the United Kingdom spent US$10.9 billion and US$4.2 billion, respectively, on procurement and R&D. European Defense Agency (EDA), Defense Data of EDA Participating Member States 2009 (Brussels: European Defense Agency 2009), 11. China defense R&D budget is unknown, but based on its overall military spending, it is not unreasonable to assume that the Chinese allocate anywhere between US$5 billion and US$10 billion on military R&D.

⁷⁰ Ben Vogel, ‘China Embarks on 15-Year Armed Forces Modernization Program’, Jane’s Defense Weekly, 1 July 2006.

⁷¹ Vogel, ‘China Embarks on 15-Year Armed Forces Modernization Program’; OSD, 2011 Report to Congress, 45.

⁷² Cheung, ‘Dragon on the Horizon’, 52–4.

⁷³ William C. Hannas, James Mulvenon, and Anna B. Puglisi, Chinese Industrial Espionage: Technology Acquisition and Military Modernization (New York: Routledge 2013), 78.

⁷⁴ See Hannas, Mulvenon, and Puglisi, ‘Appendix I’, Chinese Industrial Espionage, 256–70.

⁷⁵ Ian Anthony, ‘The “Third Tier” Countries: Production of Major Weapons’, in Herbert Wulf (ed.), Arms Industry Limited (Oxford: Oxford University Press 1993), 365.

⁷⁶ Hannas, Mulvenon, and Puglisi, Chinese Industrial Espionage, 241.

Additional information

Notes on contributors

Richard A. Bitzinger

Richard A. Bitzinger is Senior Fellow and Coordinator of the Military Transformations Program at the S. Rajaratnam School of International Studies, where his work focuses on security and defense issues relating to the Asia-Pacific region, including military modernization and force transformation, regional defense industries and local armaments production, and weapons proliferation. Mr. Bitzinger has written several monographs and book chapters, and his articles have appeared in such journals as International Security, Orbis, China Quarterly, and Survival. Notable publications include Towards a Brave New Arms Industry? (Oxford University Press, 2003), ‘Come the Revolution: Transforming the Asia-Pacific’s Militaries,’ Naval War College Review (Fall 2005), and ‘Military Modernization in the Asia-Pacific: Assessing New Capabilities,’ Asia’s Rising Power (National Bureau of Asian Research, 2010). He is also the editor of The Modern Defense Industry: Political, Economic and Technological Issues (Praeger, 2009), and the author of Arming Asia: Technonationalism and Asian Defense Industries (Routledge, forthcoming 2016).