Type 98 main battle tanks of the People's Liberation Army Ground Force. (Photo : PLA)
Chinese President Xi Jinping's plan to build a military-industrial complex as nimble and as sophisticated as that of the United States is being stymied by state-owned firms that dominate China's out-of-date weapons production industry.
Xi began the tedious trek to break this stranglehold and boost ties between military and industry in January when he established the d Central Commission for Integrated Military and Civilian Development.
Xi heads this commission, which Beijing said is vital for China's national defense. The commission will decide and coordinate affairs on civil-military integration.
It will be under the Political Bureau of the CPC Central Committee and the Standing Committee of the Political Bureau of the CPC Central Committee.
Civil-military integration is important in building China's national defense in peacetime. Xi stressed the importance of the integration, describing the coordination between economic development and national defense as mutually beneficial.
This integration, which is key to realizing the goal of a strong People's Liberation Army, accelerated in March 2014 when it was upgraded to a national strategy. In May 2014, the first "military and civilian integration forum" issued a list of 200 military items, attracting more than 100 private companies.
The commission, which intends to increase integration between China's military and industry, shows Beijing's determination to shake up the country's bureaucratic and antiquated weapons production system, analysts said.
Analysts, however, warned that interest groups, especially state-owned enterprises, monopolizing China's defense industry will be a key obstacle hindering reforms. China's disrespect for protecting intellectual property rights is another problem.
"I think the first step is to come up with measures and let state-owned enterprises and private companies complement their advantages to each other because it will take a long time for China to break the monopoly of stated-owned enterprises in its defense industry, " said Xu Zengping, a member of the Chinese People's Political Consultative Conference, China's political advisory body.
China's state-owned enterprises also can't bring themselves to part with the hefty government subsidies that keep them afloat and subsidize the inefficiency and incompetence.
Foreign military analysts doubt China can truly develop a military-industrial complex like the U.S. since state-owned companies deeply mistrust private companies, and have no record of successful cooperation with private firms.
State-owned firms also have no respect for intellectual property rights, which private companies value as a huge investment that shouldn't be stolen by the state on the flimsy excuse of protecting national security.
