The Chinese State Council released a directive last Thursday to boost the country's military modernization program.
The directive, circulated by government-owned media, stated, "China must use the market to optimize military resource allocation and actively direct economic and social sector investment."
In addition, the Council wanted all sectors of the government to "work to resolve and restrict systemic obstacles, structural contradictions and policy problems in the fused development of economic and national defense construction."
The council referred to pushing for mixed-ownership of new military programs. This mix would be a combination of funding from the private and public sectors.
The current military budget is 954.35 billion yuan ($142.98 billion). This is only quarter of the U.S. Defense Department budget for the year.
However, the U.S. is getting anxious over China's relationship with its neighboring countries. Recently, China asserted its claim over the South China Sea.
President Xi Jingping crafted plans to build high tech weapons such as stealth jets. He also wants to modernize the Navy.
Aside from upgrading military equipment, Xi also wanted reforms inside the military organization. The president said that his reforms would include booting out of corrupt officials and building a new joint operational structure by 2020.
China is continuously improving their military capabilities. Aside from developing a stealth jet, the country is also now manufacturing warships and submarines. These ships and jets are still the most sophisticated in the whole Asia Pacific region.
However, China is still unable to build sophisticated electronic tools. To fill in the gap, they import from Russia.
In 2015, a military directive was released by the People's Liberation Army. This white paper called for "independent innovation" and the "sustainable development" of advanced weaponry and equipment.