[EST. PUB DATE] DEFENSE MODERNIZATION IN CHINA

Created: 10/1/1980

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Niltonil

Modernization in China

Defense Modernization in China <|

Information available as ofuguUhas been used In the preparation of this report.

Defence Modernization in China H

China's defense modernizalionwo-decade effort aimed al improving the People's Liberation Army (PLA) and ihe defense industries, is offood start but ha> far to io. The effort arise* from deep-rooted apprehension over Soviet military capabilities and from the leadership's desire to "move China into the front rank of nations" by thet will be successful only if the nation enjoys prolonged political stability, retains access to foreign capital and technology, avoids costly foreign military campaigns, and moves forward in science, education, and industry.

China's prospects for military modernization arc influenced by strengths and weaknesses in its political, economic, and technical bases. The country suffers from serious shortages of trained technicians, deficiencies in key technologies and defense industries, and inadequate foreign exchange. The principal factors favoring success of ihe modernization drive include the leadership's stability and dedication to modernization and the willingness of foreign governments to provide technical and financial assistance. |

The defense modernization program has two distinct aspec's: (I) improving PLA capabilities at low costSimultaneouslydefense industries and selectively investing in new tooling and technology. Low-cost improvements include such measures as providing realistic combat training, encouraging younger leadership at all echelons, promoiing officers oo the basis of merit, and reducing military involvement in local political and economic matters. Upgrading the defense industries will involve miring more engineers, technicians, and design specialists and modernizing plant layout and management, in some cases, China must arrange technology licensing agreements and purchase new equipment. |

A key factor inrofessional military force is the PLA's emphasis on realistic combat training. This effort is designed to get more out of the weaponry and equipment now on hand and lo prepare troops andfor new equipment in the. The training program encourages competition between units and individuals and presents awards forperformance. PLA officers and soldiers are receiving more and better technical education and practical experience. |

7 the defense industriesengthy process of reorganizing plants, retraining workers, and assimilating foreign technology ihiiwill provide the PLA with modern weapons and equipment. C'.ina

ill

Stag

seeks to ncquire design nnd production technologies in key area* such a* the aircraft industry, militarydv.nnced metallurgy, andIt will pursue long-term technology transfer by three main mcthnds--arranging technology purchase* anil (reproductionxploiting military equipment obtained from friendlynd collecting information from study groups ami "technicalurchasing technology may be China's only viable option Tor moderniring its aircraft industry, but other defense industries, such as those supporting the ground forces, require less outside assistance. China is especially interested in dual-use technologies that both benefit the civil economy and enhance military

Despite its technological deficiencies. China has produced andumber of strategic and conventional weapon systemshese systems include nuclear-powered submarines, strategic missile systems, and the experimentalighter. In recent years, China's production has included an air-to-airew multiple rocketight antitank guided missile, and ships for open-ocean naval operations.e expect to see deploymentew main battlecticr antitank guidedew surface-to-airew interceptor, anduclear-powered ballistic missile submarine. J

Although serious gaps in China's defenses will remain well5esult of inadequate military industrial output, technology licenses and coproduction arrangements in the electronics and aircraft industrieswill help resolve major problems in military production. By thendustry will be able to design and produce new weapons and toide variety of equipment to the forces,

China's defensive capabilities will be significantly improved5 if political stability, economic growth, and scientific and industrialion continue unobstructed. Even with steady improvement in forces and defense industries over the nextears, however, China will notignificant offensive capability against the USSR, largely because of that country's vastly superior industrial base.opulation that is expected toillionhina is unlikely to develop forces based on technology rather lhan manpower or to abandon its defensive doctrine of "People's War Under Modernhis doctrine posits defeatechnically superior enemy by exploiting China's overwhelming manpower and vast terrain. |

Content*

Background

Impeiui for Defense Modernization Strengths ind Weaknesses of (he Force? Problems and Prospects for Defense Modernization Restraints lo Modernization

Human

Financial

Materials and Electronics Military Industry institutional

Assets to Modernization

Leadership Continuity and Cohesion Availability of Foreign Assistance The PLA* Altitude Toward Modernization Indigenous Weapons Development Program

How ihe Modernization Program Will Work Professionalism Military Training

Reorganization of Industry and Assimilation of Technology The PLA of the Future

9 il

Appendliri

of Military Trading Ccrr.jxiriiei in

Defenseatlon in China

The Chinese consistently dcacribe modernization of Ihc PLArocess of gradual force improvemcni. bated upon self-reliance, that will require many yean to accomplish. In China the term "forceImplies making fundamental Institutional changes in the PLA and the military industrial base, instilling new thought patterns and skills in PLA commanders and troops,new weapons nnd equ ipment. J

China can achieve Its goal of significantly modernizing its defense forces by the0 only if:

It remains politically stable.

It receives sufficient foreign capital and technology.

It avoids military attack upon in industrial base in Manchuriaarge-scale war with Vietnam.

It succeeds in higher priority efforts to modernize agriculture, Induslry, and science and technology.

The genesis of the present military modernisation drive was Premier Zhou Enlai's economic program set forthhou proposed to modernize agriculture andnd to "nvove China into the front rank of nations" by thehis jwogram provided the core of what later became the "Four Modernizations."

Jebpcy trans-tcr signaled cnina's willingness to seek foreignlhat would Till military needs.

.

The death of Zhou Enlai in6 triggeredof political upheavals that led to theof Deng Xiaoping and the subsequent reignGang ofhe Gang reversed or slowed|

^(Thc death of Chairman Mao Zedong iner. however, ended lhe Gang's activities, and Ihe four were arrested inew leadership centered around Hua Guofeng and Ye Jianying began totske shape in

Thr new leaders resumed the Interrupted military modernisation driveispatched numerous delegations to Europe and Japan to study foreigntechnology, and began to reorganize selected de* fense plants. The leadership also accelerated the drive for military professionalism and more realistic training begun two years earlier. In7 Ihe PLAew doctrine of "People's War Under Modern Conditions,and Deng Xiaoping againurned lo power.

modernization emerged as an issuehen China made iu first inquiries about theTOL ground attack aircraft and resumedfor the transfer of Spey turbofaneng Xiaoping, rehabilitated from his Cultural Revolution disgrace,rominent role in promoting military modernization.|

The watershed year for dcfcnic modernizationihe

rehabiilTaTBrionornw

tion advocate Lo Ruiqing. and ihe signing of an agree-

I

for Defense Modernliallon

China'i pursuit of military modernizaiionin iu presentfrom deep-rootedover Soviet military Intentions in Alia. Thehave viewed with increasing anxiety the marked growth over the last decade in the USSR's strategic and conventional military power, particularly (he strengthening of Soviet forces along the Sino-Soviet frontier. Senior Chinese official* have expressedlhat (he PLA might fall so far behind the Soviel military that it could no longer function as an effective deterrent. J

Despite such concerns. China evidently views the Soviet Unionong-term threat rather than ni an immediate danger, and defense modernizationwill continue lo hold the lowest priority among the Four Modernizations. Civilian "modernizers" in the leadershiptrong case that defensecanno; proceed far without broad progress in agricultural, industrial, and scientific affairs.Ihe Chinese themselves expect early results to be few and unspectacular, and Ihey prefer to stress over the nextears the building of an industrial bate that only eventually will enable China toide range of modern

China's appraisal of Soviet intentions and capabilities largely shapes the direction of the defenseeffort, The Chinese leadership evidently believes that the Soviet Union's most likely attack wouldheavy armored thrusts, supported by alrpower, Into Manchuria and possibly Inner Mongolia. The Chinese appear to believe lhat ihe Soviets could not effectively employ their naval power agairat China and that they would refrain from using strategic nuclear weapons because of China's limited bul credibleCnpa bi!ily.(

according to lhe "Three-in-One"hich callsefense in depth toonventional attackilitarily superior enemy. Most main-force units and some regional forces are adequately equipped with tanks, field artillery, antiaircraft artillery,guns, and other equipment, much of it based upon Soviet technology and designs of theome equipment is obsolete by US and Soviet stnndards. most pieces are rugged, reliable, and Mill effective on Ihc baitleField.

i una mucnincgun

: copy ofon earlyH

f tnrocli, and the

Though lhe ground forces have much of Ihe equipment needed for wartime crseralions, several keyin equipment for antitank and air defensenotably increase the PLA's lossesonventional war. The PLA has little antitank capability at rangesniinircrnft artillery defenses feature cannon and machinegun* of old Soviel designshinese modelurface-to-air missile Weaknesses in radar tracking of targets, limited range and accuracy of the weapons, render Chinese ground forces vulnerable lo attack by fast,i. gjgfj

The ground forces also suffer from serious deficiencies in logistics and tactical communications. Inadequate roads and motor transport slow the movement of troops to the battlefield, hamper their redeployment to counter breakthroughs, and limit the movement of ammunition and other supplies and the evacuation of casualties. Tactical radios are neither numerous nor good enough to support command and controland to ensure that units renci quickly tosituations.

Beijing regords ihe ground force* ator defendingoviet conveniionoltheir modernization is receiving itrongof weapon! lo counter armor .indof immediateo the Chinese evidentlyrating resources onew nvintank, increased -lumbers of antitank guidedantitank mines, improved antiaircrafta new surface-to-airOther

important concerns are the provision of reliableradios and the production of heavy trucks and some tracked vehicles. As the major gaps are filled, attention will turn to improvement of lank and artillery ammunition and produclion of Improved artillery pieces, mobile bridging equlpmcni.anda brooder range of infnnlry weapons.

lane Air Force is the service leastof successfully performing lis mission. The Air Force lacks advanced avionics, air-to-air missiles, and electronic awnlcrmcasure equipment. Moreover, it ismost difficult service to modernize because needed technologies currently are beyondrasp and are extremely expensive. |

inability of Chinese engineers to aesign ai turbine aircraft engines with performance better than that of older. Soviet-designed models spurred the Spey engine negotiations and the continuing eichanges with Western aircraft

;hina also I

eventually lo build helicopters, wide-bodyrcroft, and improved combat aircraft. I

Along wiih engines, the Chinese want lo develop better avionics equipment and aircraft weaponry.

The PLA Navy has some deficiencies bul couldperform its primary mission of defending Chinasizable force of diesel attackservesirst line of defense against approaching hostile fleets. This is backed upmall bul growing force of mayor surface combalams, numerous missile and torpedo boots, and finally naval shore defense sites. The Navy is deficient in air defense and antisubmarine warfare, bul these weaknesses apply mainly io open-occan operations beyond the conimcnt.il shelf and the range of land-based aircraft. With an air arm ofircraft, the Navy can provide near-shore air cover to ihe fleet, maritime surveillance, and supporting attacks. However, the Navy cannot perform major amphibious operations, because ll locks ihe resources for transporting tanks and for providing fire support for large assaults, |

miuite submarines and n| |number of new land-based, solid-prcpcllant ICBMi.nd SR BMi. We alio expect lhal China gradually will improve the reliability and targeting flexibility of its missile forces.

ProMems and Prospects for Defense Modrrnlzatle-n

Restraints to Modrmiiatlon

China's military modernization is constrained by numerous fiscal, organizational, and technical factors.

dditionally, several thousand graduatetrained In engineering and technical subjects before the CulturalRevolution are cbrood fortraining. I

Financial. Defense modernization is constrained by China's deep poverty and Ihe leadership's relegation of defense lo fourth priority behind agriculture, industry, and science and technology. Althoughudget was increased, the entire increasewas needed to pay for the conflict with Vietnam and subsequent improvements in bt-rder defenses.0 budget presented to the recent National People's Congress (NPC) callspcrcent cut in defense expenditures. Military leaders accepted this decision.

J i

The defensethe broader industrialthe prospectapidly dwln-dling supply of trained researchers and engineers. Many were educated in Frsnce. Germany, or the United States duringndonew China" in. They now are in their seventies and eighties and are having difficulty carrying the burden jfool00 Soviet-trammI engineers exists, most of them trained0his group, however, is not as skilled as China's Western-educated engineers and is too small to fill Beijing's requirements for technically trained manpower. The Cultural Revolution period66 virtually de-stroyed the system of higher education, and few trained engineers or techtiicians emerged during this "Lost Decade."|

The government is fully aware of the crisis it faces in training large numbers of new technicians. Until China has sufficient engineers and technicians trained in modern methods and conversant with modernstaffing for most major weapons programs will include older engineers lacking needed design and production skills, Still. China con mobilize enough technical talent for selected, high-priority projects in the strategic weatx-ns, aircraft, and naval proirams. Growing numbers of young students will begin to enter the defense industries in thend replace (he older technicians.than two-thirds in science andnow enrolled in colleges and universities throughout China, and the government plans tothe number of university studentsillion by

|lnvesiment* in research and developmcnlnonmiliiary areas as metallurgy, electronics,aircraft will ultimately benefit the militaryprogram. The NPC approved increases"

orttrmoul'^tjcigenr^ and technology. I

Mmerinls and Electronics. Manufacturing modern weapons requires sophisticated metals and al'oys,electronics, and special materials. In none of these areas can the Chinese now produce ihe desired quantities of high-quality products. China doesaboutillion ions of steel annually, sufficient to sustain ils current, row-tcchnclogy arms industry. However China is unable to produce enough high-grade or speciallyheat-resistai.tmeet military needs.

tearly all superaiioys and rclaled materials must be imporied at high cost from Japar. nr Western Europe. Virtually all nickel

-fisaret^

alloys arc imported from thehe Chinese do possess large supplies of aluminum ore and produce enough aluminum to meet military t'imilar pbundancc of titanium ore will permit China to meet demand for this metal when sufficient refininghas beenhina will have toajor effort, however. In udvanced meialluriy. |

Manufacture of special materials such as composites, plastics, ceramics, and synthetic fibers is in its infancy.

Most Chinese-produced radars, sonars, andsystems are technically deficient because China's electronics sector lacks essentialtechnologies to move advanced components from the laboratory into production. China produces abroad range of electronic equipment and components^

ic exception may developmentiber used to produce lightweight, high-strength component* for aircraft and space vehicles. This material can be used in relatively small quantities to manufacture missile casings,components, and parts for shoulder-launched antitank and air defense weapons, fj

MilitaryD-spile excess plant capacity that resulted from the large building program9uch of China's defense industry cannot yet support theve. |

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lureesser problem. Though such equipment may be less efficient Ihan eompurable Western or Japanese equipment. it generally ts adequate for producing parts andneeded for weapons. Poor managementincluding excessive politics in plant management and confused chains of command, persist

Still, despite extensive reorganization. China's major effort in jel engine development remains hampered by inadequate lest facilities. To improve their testingthe Chinese are actively seeking advanced wind tunnels and computers for engine testing and component research, (s)

Imsiirmtiomal. Deficiencies in thehcraiion Army itself constitute another major constraint to military niodernizaiion The forces arc not welltrained, or equipped lo receive new weapons. The absenceodern logistics organization calls into question the PLA's ability to obtain spare pans when needed or to maintain and repair advanced weapon systems.

lop PLA leadershipgained on appreciation of Ihcse problems from its contacts, sinceith Western armies and military leaders.p

The leadership recognizes thnt the PLA cannot ina snould notestern-style military force but (hat it can adapt selected practices to Chinese

needs. H

announced their readinest to sell ar.ns, to Beijing, and Chinese arm* delegations have found generallyaudiences among arms manufacturers in Western Europe, Japan, and the United States. Toon foreign suppliers, however, the Chinese prefei to obtain technology rather than end items nnd arc cautious when approachingo the client that China can maintain poiilical viability and social order, foreign governments will continue loBeijing with much-needed development funds and critical technology and equipment.

lo Mc^ertri ration

Despite the many restraints in military modcrnirattan, several noteworthy factors favor the program: theis generally stable and committed toforeign assistance is available, the PLA is willing lo modernize, and Beijing has avoided expensiveentanglements since Ihe Vietnam incursion. If China maintains these advantages over the neat decade, it may well develop the foundation needed for eventually introducing large quantities of modern equipment ard armament into the PLA. ^

Leadership Continuity and Cohesion

Since7 the party leadership has beercohesive and committed to the twin policies uf economic modernization and diplomatic opening to the West. Leadership reformers under Deng Xiaoping have carefully but persistently removed or weakened leaderso these policies and have successfully eliminated much opposition. The mc>dernizaikHinow appears to be popularly accepted asindividual economic opportunities and relief from the confusion and uncertainty of past leadership struggles. Serious economic and political problemshowever, and newly appointed government and party leaders will be under considerable pressure to srsow results and sustain Ihe momentum of lheprogram |

A'if Foreign Assistance Oiling has an excellent credit rai'ng. and many foreign governments are eager lo sell to Beijing or lo provide hard-currency loans. Foreign industrial Firmsaunched intensive efforts to sell large quantities ef Finished goods and whole plants. Despite strong Soviet pressure, the French and British Governments have

The willingness of the United States and Europe to accept students for language and technical training is another important aspect of China's relationship with the West. In an effort toool of trained manpower for research and development within the defense industries and throughout the generalBeijing has sent to Western universities moretudents, virtually all with technicaland industrial or research experiencr. Plans coll for their return to China to teach others, translate foreign scientific and technical publications jnd papers, and conduct advanced research.J

TV PLA'* Attitude Toward Modernization

The PLA has displayed eagerness to> wiihmodernization. Large numbers of officer* who possessed few military skills and who advanced to the upper levels of the PLA during the Culturalhave been removedlthougharc still dominated by patronage and the old-buy network. Ihc idea of making promotions dependent upon demonstrated skills and readiness to implement modernization program* is gaining acceptance. |

Further evidence of the PLA's willingness toi the General Staff Department sg^^Hogram to study foreign military doctrine and strategy. I

Bhc GSD hat acauired foreign training manuals

' The Chinese leadership, however, is vary ef nadae dependence on foreignand other eredlioei In vie" ofx perk nee with Western kssna inISJOihina's acgo-llationa for arms ire hnologf.h serf al Wen Farortan governnwwii.ennderably. The iSawdrrana probably were caatcd by China's rrawessaierii of In economic need* raiher lhan Fiooptan reluciance to sell

f 'II

Secret^

basicwith the doctrine and strategies ofelter understanding of Soviet forces as

indigenous Weapons De'elopmenl Program

For all their weaknesses. China's military industries already represent far moreero base for future progress. Despite the disruptions of the Great Leap Forward, the cutoff of Soviet aid. and the Cultural Revolution. China succeeded in developing nuclear weapons, strategic missiles,rototype nuclear submarine In ihe decade before the fall of Lin Biao. The Chinese haveumber of conventional weaponsor the ground forces, they havem multiple rocket launcher, copies of theagger antitank guided missile, rocket-scattered antitank mines, tank laser rangefinders and night-vision devices, and limited numbers of theow-altilude surface-to-airThe Navy has received I

In8 the Chinese unvcif to-air missile that is now deployedumber of Air Force units. These achievements suggest that some development and production of new weapons and equipment will lake place well before completion of lhe defense industry reorganization program.

phatires military professionalism and better training, and the track for the defense industries stresses methodical reorganization and acquisition ofAt present the key to military modernization lies in learning how to get more out of current military equipment and industrial plants. China's militaryprobably will improve significantly sometimes the defense indusiries produce more advanced weaponry and the PLA is increasingly able io use ii-^|

Professionalism

The first step toward modernizing the PLA was the decision made following Lin Biao's fall1 to remove the Army from civilian matters and direct its attention toward national defense. Professionalismajor point of disagreement between the Leftists and the group of modernizers aiound Zhou Enlai. The Leftists saw the PLA as an ideological tool forthe correct political line throughout the country.esult of Cultural Revolution violence, the PLA hadreatly increased responsibility for internal security. Collapse of civil authority in mrny areas led the PLA into widespread involvement in civil government, factories, railroads, and communes. Under former Defense Minister Lin Biao. irtrnywere promoted solely on the basis of political credentials or personal loyally. By Ihe, the very concept of "professionalism" was looked upon with suspicion by civilian Party members and career PLA officers alike.!

How the Modernization Prograat Will Work

The Chinese realize that military modernizationimprovement of both the PLA and Ihe defense industries that support it. China's industry cannot produce modern weapons and equipment in quantity, and Ihe PLA Is ill prepared to use and support new armament. The leadership has thereforeual-track program: lhe track for the forces cm-

the PLA has

> leicco virtually all ol its former positions in the civil administration and economy and returned to military concerns. The number of Internal Defenseformed to deal with Red Guardbeenand will continue to decline as the PLA'ssecurity role declines. The PLA also has adopted higher standards for its personnel and has directed that division, regiment, and battalion commanders be younger and better prepared professionally. TheStaff Department recently announced thegoals in its campaign lo seek younger leadership:

Planned 22

Present

40.

5 +

Unit

Platcon Companr Battalion Regiment

DlVHKHI

The drive for professionalism may bring about Ihe rein traduction of military rank in theoviet-style rank system existed in China5ut il was abolished on the eve or Ihe Cultural Revolution, Ideological considerations preventedor lhat system in the, but combat experience in Ihe Si no-Vietnamese war has provoked serious study or Ihe issue. Restoration of military rank would reduce dependence upon personal relationships all levels and would facilitate the transfer of officers.

Military Training

Though training was not entirely abandoned by the PLA even during Ihe worst part or the Cultural Revolution, it received low priority and was of uneven quality. This resulted partly from Cultural Revolution

exigencies lhat required PLA units to provide internal security under difficult conditions of factional strife and partly from the policy approach of the Leftists, which stressed political training.ost training involved small-unit tactics and basic infantry skills

PLA soldier normally spent about four hours per day in military training and another three hours in political and cultural study.I

which begins with individual (raining and conci- des wiih divisional and joint-serviceincreasingly sophisticated, Major improvements

|The General Staff Departmentconductingises with increas-

ing frequency andmtensiiyinall military regions. Finally, the PLA is spending considerably more lime on military training and lesson political study.

Air Force training stresses development of pilot skills and improvement of air lactics.1

instances in which Chinese workers improve upon foreign technology. In this way. the leadership easily represents its policy of importing technology as "making foreign things serve China."]

The new emphasis upon quality of trainingey aspect of the military nrodernization program.between units and Individuals is now encour* agi-d, with awards for outstanding performance. The military school system, largely shut down during the Cultural Revolution, has been reopened. I

iG renter attention is also being given to teci it ion for PLA officers and possibly for lected soldiers. I

Reorganization of Industry and Assimilation of Technology

After severaltarts prior to the fall of Ihe Gang of Four. China begaarogram to reorganize industry and to import technology andeffort intended eventually to broadly transform the defense industry. Reorganization will permit theto make better use of existing plants andand in some cases will prepare the way forof foreign technology. China currently seeks key foreign technologies

To justify this important policyby the Gang ofmoderniiersquote Mao Zedong. Lenin, and even Karl Marx as favoring the importation of foreign technology. The leadership, however, carefully recognizes andrewards domestic Inveniivencss and publicizes

present

logy transfer will continue to be the exchange of technical groups and delegations, which will ailcmpt to obtain as much free technology as possible. Licensing arrangements will be few and chiefly in areas ofthat support broad sectors of industry. I

Rumors and reports of China's interest in equipment purchases and technology-transfer agreements have excited unwarranted hopes among WesternThe Chinese did sign0 million Spey engine agreement in5 afler four years of negotiation'.!

To date.

r, no further contracts have been signed. The Chinese probably will eventually consummate several major weapons technology licensing agreements, but only after exhaustive study and careful preparation.|

Technology purchases offer the advantages oforeign assistance in the form of equipment and prototypes, materials, blueprints, and specialized industrial training,ventual independence from foreign suppliers. Coproduction arrangements may even provide Western management expertise, on-site technical representatives, and Western design and production technologypartnership" basis. The disadvantages, however, include high and sometimes

prohibilive costs, implicit pressure for politicallack of trained engineers and technicians to assimilate Ihe newI

Individual pieces of military equipment are obtainedor barter items from friendly foreignIn this way ChinaacquiredUjM

J2 una nas aisocibtaincd examples ihe usuro Ai^TSaggerainful SAM, andrail hand-held SAM. Thisprovides China wiih cheap access to improved military technology, bul thorough exploitation requires extensive and difficult reverse engineering. Suchprobably yields valuable data on theof each weapon bul cannot ensureof higher technology equipment. fMj

Dispatching technical delegations and study groups and conducting technical "exchanges" are nowbest means of acquiring generalhinese have visited Japan. Europe, and the United States7 seeking technology with military applications.

" The Chinese art well aware of lha disadvantage* of impalingact tiring capabilities without itw bcq airing dcMgnproduction technology The following obtemuoa1 by Ihe leading PRC sclenct^orameday refleet Oancac eiperienee* whh the Soweis Mindprm'b'i with Ihe BnMhihe Spey transfer "However, there are manyport mi complete sen of eqwreneni. not Ihebeing Ihe greatincurred, and it it nM likelyelp raiselevels of domestic research and produclion Although in ihis precast some technology may be brought in. inch technology is mainly confined lo data concerning production capabilities and not related lo Ihe technological practwtc* essential to aianu'acture. Thishe vendors alone have accou to basic design* and vital aiprcu ol produclion technology.hcrtsi the bayertoway to acquire ifchnolagical an] produclionbeyond cenamparticvIan on ihe mamifaciare of required mmrmenii andfor raplacernent purpotea. This is in important reason *hyong lime China was unable lomanv'sciuroiMa of equipment idcnllcat to thcae It had Imported inJ

Though ihe number of such "exchanges" has dec Mot since its peak inarge numbers of Chinese military technology specialists and defense industry technicians continue to travel abroad. I

Many Western expert Wtlieve thai China's only option for achieving industrial modernization lies intechnology or arranging coproduction deals. For some defensethe aircraftmay indeed be the only recourse, and it probably will require heavy outbys of foreignumber ofther industries, such as those supporting the ground forces, probably need less outside assistance. Plants producing landsometimes need only to resolve specificproblems relatedarticular weapon. The answers often are obtainable at little cost by consulting Western firms or technical personnel and bylimited amounts of equipment or end items.

Chinese attention has increasingly focusedide variety of "dual-use" technologies as Ihe key tocivilian industrial requirements while satisfying military needs.8 Ihe Chinese have opened most defense industries to civilian production,to use excess capacity, gain technical skills,waste, and acquire management expertise. With ihe "civili.ini ration" of the defense industries,of lechnologies with both military and civilian applications has become politically more acceptable than purchase of purely military technology. Examples include heavy trucks and tracked vehicles that may be used in mining or construction but are equally useful as military transport or as tracked weapons carriers.computer and electronics technologies arefor scientific research or commercial purposes

obi may enable China lo improve radan. sonars, elec-ironic warfare equipmenl. and military*ns. Beijing ii purchaiing wide-body aircraft for use by ihe Civil Aviation Administration, but such aircraft can be quickly converted to military transport uie. WM

TV PLA of the Future

Although China', defense modernization is still in an early stage and undoubtedly faces severe tests. Ihc program is olTood start. Many aspects of the program-such as developing militaryalready bearing fruit, and others-iheof technicians and the acquisition of technical literature-are well under way. ir China remains politically stableand systematically assimilates foreign technology, it can achieve andteady pace of military modernization. For the near term, the PLA will continue to emphasize belter classroom instruct ion and will conduct field training that involves regimental and divisional units and combined arms. Meanwhile, the defense industries will acquire theech-moans, and technology needed to provide improved weapons and equipmenl.ombination of improved PLA training and increased defense output probably will beginto accelerate improvements incapo bilities.J

a.vnear as electronics technology acquired _io resolve technical and production problems. Increased heavy truckusing Japanese technical-ill begin to improve tactical mobility |

arked Improvements in force capabilities probably will occur as the defense industries become able to meet PLA requirements for weapons andEmphasis on antitank aad air defense weaponry will continue, and the numbers or these weapons in Ihc PLA inventory will increase substantially. Mobility

Over the next five years Beijing will emphasize low-cost measures designed to get more out of existing forces and equipmenl and introduceew new weapons into the inventory:

will be improvedreater number! of wheeled vehkla and how (racked armored vehicles. China'i inventory of transport aircraft will grow, andof engine problem* may permit deployment of greater number! of fighter aircraft. The Chinese will deploy improved radars and more electronic equ ipme nt and provide commanders with reliable tactical radios. An improved logisticsby likely ad-varices in computerwill begin appearing by the, j

Secret

China's defensive capabilities will be signifiesS if political stability, economic growth, and scientific and industna! modernization continue unobatructed. Even with steady improvement in forces and defense industries over the next I5 years, however. China will not ri-velop an offensive capability against tbe USSR, largely because of that country'! vastly superior industrial base.opulation that is expected to reach IJ billionhina is unlikely to develop forces based on technology rather than manpower or to abandon lu defensive doctrineWar Under Modemhich posits defeatgically superior encmybymanpenver and vast terrain. |

Appendix A:

Role of Military Trading Companies In Modernization

The Chinese haveumber of trading companies to systematically acquire arms, technology, and military equipment from Europe. Japan, and the United States. The best known firm, the Northern Industrial Corporation, appeared5 and has been followed by at least seven others.!

lost werecnanerea to atuoy foreign technology and report to the parenthich then would place orders through MACHIMPEX orof the Ministry ofdj

Sincehe companies have become more aggressive in their pursuit of foreign technology and increasingly independent ofT.

Iilitary trai

ing companies now arcio conduct direct negotiations with foreign Firms, offer licensing or reproduction arrangements on behalf of the Chinese Government, and engage In arms sales. |

Northern Industrial Corporation. NORlNCQwas chartered5 J

ehalf of ihe Fifth Ministry (Landver the years the Firm has exhibited broad interest in advanced metallurgy, electronic, ihiobuildil craft,and land.

'hinese-ptoduced tanks, artillery. SAMs. and otheroearriforeign exchange for the defense modernization drive. |

Great Wall Industrial Corporation. GWIC wassometime8 and serves as an extension

of the Seventh Ministry (Missiles andts representatives participated in thr negotiations with German and US firms for communications satellites and with the Japanese for launch technology.

China National Aero-Teehnolony Import and Export Corporation. CATIEC. charteredthe Third Ministry (Aviation) as its parent and has taken charge of several key negotiation* with US aircraft and engine manufacturers that had beenby MACHIMPEX. The firm may conclude coproduction deals for wide-body aircraft, helicopters, and jet engine* |

CMaaSMtpMldlHK Industrial Corporation. CSIC appeared8 and has held talks with Japanese and European firms regarding modernization of Chinese shipyards. The Corporation is headed by the Ministeriry (Shipbuilding.repreaenutrvesTaTe attempted to buy ASW detection equipment and weapons and have studied advanced steel forging tech-

China Precisian MachineryxportCPMIEC was chartered in0 for the purpose of studying Western military electronic*applicable to flight controls. Recentsuggests that CPMIEC is subordinate to the Eighth Ministry, which wasatccording toXinhua. CPMIEC will seek precision navigation instruments for aircraft, spacecraft, andnd advancedand optical products.

cret

Eastern Special Ennlpment Corporation. ESBCcontinued someIn

iu rope, ESEC currently Is negotiating Tor ground forces equipment, mobile bridging, nonmctalllc mine detectors, and night-vlslon devices.

Is publiclyas an extension of the Fourth Ministry (MilitaryETI EC will presumably continue the efforts of iu predecessor to acquire electronicassembly plants from Japan and microelectronks technology from Ihe United States. I

i

i

"Step*

Original document.

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