Sunday, July 29, 2012

Capitalism, can't have a modern Military–Industrial Complex wihtout it.

Thanks XYZ for this news update.

China to Further Open Defense Industry to Private Capital
2012-07-24 13:34:56 Web Editor: Mao Yaqing

China's military authorities are planning to further open the country's defense-related industry to private capital.

Authorities says private investors will enjoy the same treatment as their state-owned counterparts in taxation and licensing.

CRI's Suyi has more.

The guideline released by the General Armament Department of the People's Liberation Army is designed to bring competition into the defense industry.

Private investors are encouraged to take part in weapon development, production and even the restructuring of state-owned enterprises.

It also highlights security protocols for private players and sets out to boost supervision for the sake of national security.

Yin Xingming, Deputy Director of the China Center for Economic Studies, says the plan is a good start.

"For long term benefits, all competitive industries should be open for private investment. And based on the experiences in the global market, encouraging private investment in the defense industry will help to beef up product standards and technical know-how."

Last year, China's J-20 stealth fighter had its first test flight, making China the third nation in the world to have stealth technology, right after the US and Russia.

However, most of the fighter jets are either produced by the AVIC Shenyang Aircraft Corporation or the AVIC Chengdu Aircraft Industry Group, both under the state-owned Aviation Industries of China.

In a bid to bring diversity to the industry, the latest guidelines pledge to shorten the period for qualification assessment and licensing for private investors who apply for weapon development and production.

However, Yin points out that an effective implementation of the guidelines needs facilitating measures.

"It does not provide detailed measures as to how to put the guidelines into action. Should we stick to the previous practice where stated-owned companies dominated the market, or should we open all sectors to private investment? Will the private companies be allowed to produce missiles on their own? These questions remain unsolved."

Yin also advises authorities to draft laws to protect the rights of private companies that are venturing into the field.

China will spend 670 billion yuan on the military sector based on this year's budget plan.

Back in 2005, the State Council released guidelines encouraging non-state owned capital to enter the defense-related industries.

However, state-owned enterprises still dominate the market, with some private businesses joining the industry as suppliers for electronic devices and other facilities.

For CRI, I'm Suyi.


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