English

DTIC ADA523026: China's Defense Industry on the Path of Reform

China's defense industry has undergone a dramatic transformation over the past decade. Fundamental reforms in central government organization and policy, the operations of defense enterprises, and the flow of international capital reveal a new paradigm on the part of the Chinese leadership. As a result of these changes, the historical critique of China's defense industry as clogged with redundancy and inefficiency, and lacking access to capital and advanced technology is no longer accurate. Building upon the findings of a 2005 RAND report entitled A New Direction for China's Defense Industry, this report analyzes recent reforms in China's defense industrial base and their effectiveness. It adopts the sector-by-sector approach introduced in the RAND study to account for significant variation across the different sectors (aviation, aerospace, nuclear, shipbuilding, electronics, and ordnance). The chapters in this report assess the tremendous progress China's defense industry has made since 1998 by arguing that four main factors have determined its success and define the leadership's new approach to modernization: More funds for weapons acquisition; Spin-on benefits from the commercia

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