• Chinese soldiers.

Chinese soldiers. (Photo : Getty Images)

China claims both the People's Liberation Army (PLA) and the Chinese People's Armed Police Force (PAP) have halted 40 percent of their commercial activities as part of the ongoing military reform aimed at rooting out endemic corruption in the armed forces.

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"Decommercialization," the phrase used to describe the PLA's relinquishing its vast business empire, has so far focused on five areas: house rentals; agricultural and livestock production; hospitality services; medical services and research and development.

The PLA, the armed forces of the Communist Party of China (CPC), and the PAP have been profit-making machines with the blessing of the CPC since 1992 when the Central Military Commission (CMC) that oversees the PLA officially approved commercial activities by the PLA and the PAP.

The reach of the PLA's business empire is formidable. It's been estimated that most every sector of China's economy has its quota of military companies. The largest of the PLA's businesses are beginning to resemble the chaebols, the conglomerates that dominate South Korea's economy.

PAP is a Chinese paramilitary police force primarily responsible for civilian policing and fire rescue duties, as well as providing support to the PLA Ground Force during wartime.

The PLA started running its own businesses in the mid-1980s to offset a sharp plunge in the defense budget ordered by Deng Xiaoping, China's paramount leader from 1978 to 1989.

The transformation of the PLA and the PAP into business owners is being blamed as one of the key causes for the widespread corruption in the PLA, especially among its officer corps that runs these far-flung businesses.

The PLA, for example, controls China's multi-billion dollar space program whose reach encompasses many other multi-billion dollar industries.

The Supreme People's Court of China established a panel to help the PLA deal with related legal and judiciary affairs.

In February 2016, the CMC ordered the PLA and the PAP to eradicate all commercial activities within three years. CMC told PLA units stop signing new contracts and negotiate with civilian clients and to cancel existing ones.